^M 


mmMm 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


Digitized  by  the  Internet  Archive 

in  2008  with  funding  from 

IVIicrosoft  Corporation 


http://www.archive.org/details/asburyactionscorpOOjoyc 


ACTIONS 


BY   AND    AGAINST 


CORPORATIONS 

AT  LAW  AND  IN  EQUITY 

EMBRACING  ALSO  CRIMINAL  OFFENSES  AND  THE 

CONSTITUTIONAL  BASIS  OF  CORPORATION 

ACTIONS  AND  DEFENSES 


BY 

JOSEPH  ASBURY  JOYCE 

OF  THE  NEW  YORK,  CALIFORNIA,  AND  CONNECTICUT  BARS;  AUTHOR 
OF  "JOYCE  ON  INSURANCE,"  "  JOYCE).  ON  FRANCHISES,"  AND 
JOINT  AUTHOR  OF  "JOYCE  ON  ELECTRIC  LAW  " 


THE  BANKS  LAW  PUBLISHING  CO. 

NEW  YORK 

1910 


T 
\9I0 


COPTHIOHT,   1910,  BY 

THE  BANKS  LAW  PUBLISHING  COMPANY 


Ik 


PREFACE 

In  preparing  this  treatise  the  author  has  fully  appreciated 
the  difficulties  which  a  subject  of  the  nature  of  that  covered 
presents  in  so  far  as  the  question  of  inclusion  and  exclusion  of 
subject-matter,  and  drawdng  the  line  of  demarkation  is  con- 
cerned. Not  all  cases  in  which  corporations  have  brought 
suits  or  been  sued  are  corporation  actions  or  suits  in  the  sense 
in  which  that  term  is  or  should  be  used.  This  is  obvious. 
Great  care  has,  therefore,  been  exercised  in  selection  of  the 
entire  subject-matter  of  the  work,  with  the  endeavor  on  the 
part  of  the  author  to  keep  within  the  lines  of  inclusion  and  ex- 
clusion and  still  to  present  a  satisfactory  treatise.  Having 
this  question  of  selection  constantly  in  mind  the  author  has 
considered  fully  the  principles  upon  which  corporate  actions 
are  based,  especially  those  constitutional  principles  which  are 
the  basis  of  corporation  actions  and  defenses,  since  these  must 
necessarily,  at  least  in  the  majority  of  causes,  be  the  first  ques- 
tions involved  in  corporation  actions  or  suits,  as  is  fully  evi- 
denced by  the  great  and  constantly  growing  number  of  corpo- 
ration cases  in  the  Supreme  Courts  of  the  United  States,  which 
are  tested  by  the  principles  of  constitutional  law.  The  right 
of  action  and  defenses  in  matters  relating  to  the  supervision 
and  control  of  corporations  by  corporation  and  like  commissions 
is  a  frequent  source  of  litigation  and  presents  a  line  of  actions 
or  suits  peculiar  to  corporations  and  has  therefore  been  fully 
considered.  The  treatment  of  these  subjects  and  underlying 
principles,  has  been  followed  by  jurisdiction  of  courts,  not  only 
over  corporations,  but  also  over  corporation  supervisory  bodies 

iii 


?34C97 


IV  'PREFACE 

or  commissions  and  the  jurisdiction  or  powers  of  such  bodies; 
the  removal  of  suits;  parties,  including  stockholders'  rights  and 
liabilities;  and  the  various  actions  at  law  and  in  equity,  in- 
cluding penalties,  and  criminal  offenses,  in  which  corporation 
questions  have  been  involved.  The  author  has  personally 
written  the  entire  work  and  has  also  personally  examined  the 
cases  and  asserts  positively  that  every  statement  of  law  and 
the  application  of  principles  is  fully  and  exactly  supported  by 
the  citation  given.  The  author  trusts  and  believes  that  the 
profession  will  find  the  work  practical,  useful  and  satisfactory. 

Joseph  Asbury  Joyce. 

New  York  City,  1910 


CONTENTS 

CHAPTER  I 

CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — FUNDA- 
MENTAL,   GOVERNMENTAL   POWERS 


§  1.  Preliminary  Statement. 

2.  Constitution  and   Laws  of  the 

United  States  Supreme  Law 
of  Land. 

3.  Powers   of   Federal   and   State 


Governments  Distinguished — 
Territories. 

4.  Judicial  and  Legislative  Powers. 

5.  Same  Subject. 


CHAPTER  II 

CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — REGULA- 
TION  AND   CONTROL 


§     6.  Power  to  Regulate  and  Con- 
trol, Generally. 

7.  Police    Power — General    Prin- 

ciples as  to  Extent  of. 

8.  Same  Subject  —  Limitations 

Continued. 

9.  Same  Subject  —  Limitations 

Continued. 

10.  Same   Subject  —  Legislative 

Discretion — Interference  of 
Courts. 

11.  Liberty    to    Contract — Inter- 

state Commerce  —  Police 
Power  —  Antitrust  Act  — 
Combiaations. 

12.  Liberty  to  Contract  Continued 

— Police  Power — Sales  on 
Margin  s — Limitations  of 
Liability — Mechanics'  Liens 
— Insurance. 


16 


17 


13.  Classification   Statutes — Four- 

teenth Amendment. 

14.  Same  Subject. 

15.  Police    Power — Regulation    of 

Slaughter  Houses  and  Stock- 
yards. 

Regulation  and  Control — In- 
surance Companies. 

Same  Subject. 

18.  Regulation    and    Control — In- 

stances— Mines — Hours  of 
Labor — Water  Companies — 
Adulteration — Ship  Passen- 
ger Laws — Patent  Rights. 

19.  Regulation  and  Control^ — For- 

eign Corporations — Rule. 

20.  Same  Subject  —  Limitations 

upon  Rule. 


VI 


CONTENTS 


CHAPTER  III 

CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — REGULA- 
TION AND   CONTROL,    CARRIERS 


§  21.  Regulation  and  Control,  Gen- 
erally— Transportation  Com- 
panies —  Railroads  —  Street 
Railroads — Express  C  o  m  - 
panies. 

22.  Railroads — Obligation  of  Con- 

tract— Due  Process  of  Law. 

23.  Railroads — Obligation  of  Con- 

tract— E  X  e  m  p  t  i  o  n  and 
Transfer  T  h  e  r  e  o  f — D  u  e 
Process  of  Law. 

24.  State  Statutes  —  Railroad 

Crossings — V  i  a  d  u  c  t  s  and 
Bridges — Expense  of  Change 
of  Grade  or  Removal — Po- 
lice Power  —  Nonjudicial 
Question. 

25.  State  Statutes — Railroad  Tun- 

nels, Viaducts  and  Crossings 
— Expense  of  Removals  or 
Repairs — Vested  Rights. 


26.  Federal  and  State  Regulations 

as  to  Employers  and  Em- 
ployes— Carriers,  etc. — Po- 
lice Power — Interstate  Com- 
merce. 

27.  Same  Subject. 

28.  Federal     Statute     to     Insure 

Humane  Treatment  of  Live 
Stock  by  Carriers. 

29.  Right  of  State  to  Augment  or 

Limit  Carriers'  Liability. 

30.  State   Statutes   Providing   for 

Damages — Presentation  and 
Adjustment  of  Claims  — 
Penalty  —  Carriers  —  Rail- 
roads. 

31.  Regulation  and  Control — Tele- 

graph and  Telephone  Com- 
panies —  Electrical  Sub- 
ways. 


CHAPTER  IV 

CONSTITUTIONAL     BASIS     OF     ACTIONS     AND     DEFENSES — RATE 

REGULATION 


§  32.  Rate  Regulation — C  o  m  m  o  n 
Carriers  —  Railroads  —  Ex- 
press Companies  —  Police    §  36. 
Power  —  Interstate   Com- 
merce. 

33.  Rate    Regulation— Constitu-       37. 

tional     Limitations — Ferries 
— Bridges. 

34.  Limitation  as  to   Reasonable-       38. 

ness  of  Rates. 

35.  Same    Subject  —  Terminal 

Charges     by     Carrier — Pro- 
ceedings Against  Connecting 


Carrier  —  Discrimination  — 
Joint  Through  Rate. 

Elements  in  Fixing  Rates — 
Franchises  an  Element — 
"Good  Will" — Gas  Rates. 

Water  Rates— Right  to  Bar- 
gain Away  Power  to  Regu- 
late. 

Rate  Regulation — Exemption 
and  Transfer  Thereof — Ob- 
ligation of  Contract — Con- 
solidated Companies — Com- 
binations as  to  Rates. 


CONTENTS 


Vll 


§  39.  Rate  Regulation — Exemption 
and  Transfer  Thereof — Obliga- 
tion of  Contract — Consolidated 
Companies — Combinations  as 
to  Rates. 


40.  Rate    Regulation — Long    and 

Short    Hauls  —  Interstate 
Commerce. 

41.  Same  Subject. 


CHAPTER  V 

CONSTITUTIONAL  BASIS  OP  ACTIONS  AND  DEFENSES — INTERSTATE 

COMMERCE 


42.  Interstate    Commerce — Power 

to  Regulate. 

43.  Same  Subject. 

44.  Same  Subject. 

45.  Regulation     of     Commerce — 

District  of  Columbia — Ter- 
ritories. 

46.  Regulation     of     Commerce — 

Business  Within  the  State — 
Combinations — Tele  graph 
Companies — Common    Law. 

47.  Interstate  Commerce  —  Regu- 

lation and  Control — Rail- 
roads. 

48.  Interstate  Commerce  —  Regu- 

lation and  Control — Rail- 
roads Continued  —  Express 
Companies. 

49.  Interstate  Commerce  —  C  o  n- 

stitutionality  and  Construc- 
tion of  Commodities  Clause 
of  Hepburn  Act — Railroads 
— Carriers  a  s  Stockholders 
— Injunction — Mandamus — 
Penalty. 

60.  State  Requirement  that  Inter- 

state and  Other  Trains  Stop 
at  Specified  Stations. 

61.  Interstate   Commerce   —    Po- 

lice Power  —  Intoxicating 
Liquors — Carriers. 

52.  Same    Subject  —  Delivery  — 

Wilson  Act — Penalty. 

53.  Interstate  Commerce  —  Intox- 


57 


icating  Liquors  Continued — 
"  Arrival  " — Original  Pack- 
age— Wilson  Act. 

Same  Subject. 

Regulation  of  Commerce — In- 
surance. 

Interstate  Commerce — Bridges 
—  Navigable  Waters  — 
Powers  of  Congress  and  of 
the  State. 

Interstate  Commerce  —  Police 
Power  —  Regulation  of 
Grain  Warehouses,  Eleva- 
tors, Warehousemen,  etc. 
58.  Interstate  Commerce — Police 
Power — Quarantine  and  In- 
spection Regulations. 

Same  Subject. 

Interstate  Commerce — Taxa- 
tion, Generally. 

Interstate  Commerce  —  Taxa- 
tion —  Carriers  —  Express 
Companies  —  Vessels  — 
Railroads  —  Telegraph  Com- 
panies. 

Interstate  Commerce  —  Taxa- 
tion —  Railroads  Continued 
— Other  Property. 

Same  Subject  —  Property 
Left  Temporarily  in  State. 

Interstate  Commerce  —  Taxa- 
tion of  Bridges  and  Bridge 
Companies. 


62 


63 


64. 


Vlll 


CONTENTS 


CHAPTER  VI 

CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — FEDERAL 
AGENCIES — TAXATION 


65.  Instnimentalities     of    Federal 

Government  — ■  Federal  and 
State  Control  —  National 
Banks. 

66.  Same  Subject. 

67.  Taxation  —  Power    of    States, 

Generally. 

68.  Taxation — Obligation  of  Con- 

tract —  Equal  Protection  of 
Law — Due  Process  of  Law. 

69.  Taxation    —    Exemptions    — 

Instrumentalities  of  Federal 
Government  —  State  Agen- 
cies. 

70.  Taxation  —  Instrumentalities 

of  Federal  Government — 
Qualification  or  Limitation 
of  Doctrine  of  Exemption. 

71.  Taxation  —  National  Banks. 

72.  Taxation  —  Savings    Banks  — 

Obligations,  Securities, 


Bonds,  Stocks,  Notes,  etc., 
of  United  States. 

73.  Same  Subject. 

74.  Same  Subject— When  Tax  Is 

on  Franchise. 

75.  Taxation — Franchises  or  Priv- 

ileges Conferred  by  Congress 
—  Railroads  —  Telegraph 
Companies. 

76.  Taxation — Railroads. 

77.  Taxation  —  Franchises  —  Cap- 

ital Stock. 

78.  Taxation  "Franchises"  "Cor- 

porate Franchise  " — Bridge 
Companies  —  Insurance 
Companies  —  Uniformity  of 
Taxation. 

79.  Exemption    from    Taxation — 

Power  of  State  as  to — Ef- 
fect of  Consolidation,  etc. 


CHAPTER  Vn 


JURISDICTION   AND   VENUE — DEFINITIONS 


80. 

81. 


82. 
83. 
84. 

85. 

86. 


Definition  of  Jurisdiction. 

Definition  of  Jurisdiction  Con- 
tinued— Nature  of  Corpora- 
tion Cases  in  Which  Given 
or  Applied. 

Same  Subject. 

Same  Subject. 

"General  Jurisdiction  in  Law 
and  Equity"  Defined. 

"Full  Jurisdiction  in  All  Mat- 
ters of  Equity"  Defined. 

Concurrent  Jurisdiction  De- 
fined. 


§  87.  Jurisdiction  in  "  Special  Cases  " 
Defined  and  Construed. 

88.  Subject-Matter    and    Jurisdic- 

tion Over  It  Defined. 

89.  Definitions    —     "Civil"    and 

"Criminal"  Jurisdiction  — 
"Further  Civil  and  Criminal 
Jurisdiction." 

90.  Jurisdiction   as   Applied   to  a 

State  or  to  City  Council. 

91.  Venue  Defined. 


CONTENTS 


IX 


CHAPTER  VIII 

JURISDICTION  OR  POWER  OF  CORPORATION  SUPERVISORY  BODIES, 

GENERALLY 


§  92.  Jurisdiction  or  Power  of  Su- 
pervisory Bodies  or  Agen- 
cies— Delegation  of  Power, 
Generally. 

93.  Jurisdiction  of  Power  of  Su- 

pervisory Bodies  or  Agen- 
cies— Delegation  of  Power 
— General^  Instances. 

94.  Jurisdiction  or  Powers  of  As- 

sessment Board — Railroads 
— Due  Process  of  Law — In- 
terstate Commerce. 

95.  Jurisdiction   or  Power  of  Su- 

pervisors, Aldermen  or 
Other  Legislative  Bodies 
of  Cities,  Towns,  etc.,  as 
to  Water  Rates — Manda- 
mus. 

96.  P  o  w  e  r  s    of    Municipality — 

Railroad  Commission  and 
Borough  President — Lay- 
ing Electric  Lines — Repay- 
ing by  Street  Railroad. 


§     97.  Powers  of  Commission  as  to 
Standard  Fire  Policy. 

98.  Jurisdiction     or     Powers     of 

Court  of  Visitation — Tele- 
graph and  Railroad  Lines. 

99.  Power  of  Secretary  of  Agri- 

c  u  1 1  u  r  e — Regulation  of 
Commerce  —  Quarantine 
Regulations. 

100.  Secretary  of  Commerce  and 

L  a  b  o  r — Enforcement  by, 
Without  Judicial  Trial,  of 
Penalty  on  Transportation 
Company — N  o  t  i  c  e  and 
Hearing — Civil  and  Crimi- 
nal Action. 

101.  Power  of  Secretary  of  State — 

Reinsurance  Contract. 

102.  Special    Tribunal  —  "  Special 

Commission"  to  Hear  and 
Adjudicate,  Not  a  "Court" 
— Gas  and  Electric  Plant. 


CHAPTER  IX 


JURISDICTION      OR      POWERS      OF      SUPERVISORY      CORPORATION 
COMMISSIONS   CONTINUED 


103.  Jurisdiction  of  In  t  e  r  s  t  a  t  e 

Commerce  Commission  — 
Nature  of  Powers  of. 

104.  Jurisdiction  of  In  t  e  r  s  t  a  t  e 

Commerce  Commission  — 
Rates  —  R  e  b  a  t  e  s  —  Dis- 
crimination. 

105.  Same  Subject — Instances. 

106.  Jurisdiction  of  Interstate 

Commerce  Commission  — 
Rates  —  Promulgation  of 
General  Orders. 


§  lOGa.  Jurisdiction  of  Inter  state 
Commerce  Commission  — 
Carrier's  Discrimina  t  o  r  y 
Regulations  —  Railroad 
Equipment — Coal  Car  Dis- 
tribution. 

107.  Power  of  State  as  to  Railroad 

and  Like  Commissions. 

108.  Same  Subject. 

109.  Same  Subject — Power  to  Re- 

move or  Suspend  Commis- 
sions. 


CONTENTS 


110.  Jurisdiction  and  Power  of 
Railroad  and  Like  Com- 
missions, Generally. 

Same  Subject. 

Nature    of    Jurisdiction    and 
Power    of    Railroad    Com- 
missions. 
113.  Jurisdiction  of  Railroad  Com- 
missions— Rates. 

Same  Subject. 

When  Railroad  Commission 
Is  Without  Jurisdiction — 
Rates. 

Jurisdiction  of  Railroad  Com- 
mission— Increase  of  Capi- 
tal Stock  of  Corpora- 
tions. 

Jurisdiction  of  Public  Serv- 
ice Commission — Issue  of 
Stocks  and  Bonds  by  Cor- 
poration. 


Ill 
112 


114 
115 


116. 


117. 


118.  Jurisdiction  of  Railroad  Com- 

mission— Stopping  Inter- 
state Trains. 

119.  Jurisdiction  of  Railroad  Com- 

mission —  Interstate  Com- 
merce— Delivery  of  Cars — 
Train  Connections. 

120.  Jurisdiction  of  Railroad  Com- 

missions— Railroad  Station 
— Other  Facilities — Obliga- 
t  i  o  n  of  Contract  —  Due 
Process  of  Law. 

121.  Jurisdiction  of  Railroad  Com- 

missions— R  a  i  1  r  o  a  d  or 
Grade  Crossings — Appor- 
tionment or  Expense  of. 

122.  Jurisdiction  of  Railroad  Com- 

missions —  Telegraph  Com- 
p  a  n  i  e  s — Installing  Tele- 
phone. 


CHAPTER  X 

JURISDICTION     OF     COURTS     OVER     CORPORATION     SUPERVISORY 
COMMISSIONS,    ETC. 


123.  Jurisdiction    of    Equalization 

Board— Conclusiveness  of 
Decision  of — Review  by 
Courts. 

124.  Jurisdiction    of   Courts — Cer- 

tiorari to  Review  Assess- 
ments— Special  Franchise 
Tax — Requirements  as  to 
Return  by  Tax  Commis- 
sioners. 

125.  Board    of    Harbor    Commis- 

s  i  o  n  e  r  s — Jurisdiction  of 
Courts. 

126.  Resolution    of    City    Council 

and  Direction  to  City  So- 
licitor to  Enforce  Same 
Against  Street  Railway — 
Obligation    of    Contract — 


Jurisdiction  of  Federal  Cir- 
cuit Court — Injunction. 
§  127.  Condemnation  Proceedings — 
Commissioners  —  State 
Crossing  Board — Jurisdic- 
tion of  Courts — Waiver. 

128.  Jurisdiction    of    Courts — In- 

surance —  State  Auditor — 
Superintendent  of  Insur- 
ance. 

129.  Jurisdiction     of     Officers     of 

Land  Department  —  C  o  n- 
trol  and  Supervision  of  by 
Courts  —  Mandamus  —  In- 
junction. 

130.  Same    Subject — Railroads — 

Right  of  Way. 

131.  Jurisdiction  of  Courts  in  Re- 


CONTENTS 


XI 


spect  of  Interstate  Com- 
merce Commission,  Gen- 
erally. 

132.  Jurisdiction  of  Federal  Courts 

in  Respect  of  Interstate 
Commerce  Commission  — 
Rates. 

133.  Same  Subiect. 

134.  Same    Subject — Injunction — 

Where  Redress  Must  First 
Be  Sought. 

135.  Same  Subject — Compensation 

of  Cawier — Services  Ren- 
dered at  Shipper's  Request 
— Practice  and  Procedure 
— Remanding  Case. 
135a.  Jurisdiction  of  Federal 
Courts  in  Respect  to  In- 
terstate Commerce  Com- 
mission —  Regulation  of 
Carriers  as  to  Cars — Where 
Redress  Must  First  Be 
Sought. 

136.  Jurisdiction  of  Federal  Courts 

in  Respect  to  Interstate 
Commerce  Commission — 
Shipper's  Indebtedness  for 
Demurrage — R  e  f  u  s  a  1  of 
Carrier  to  Receive  Goods. 

137.  Use    of    Process    of    Federal 

Circuit  Court  in  Aid  of 
Inquiries  Before  Interstate 
Commerce  Commission  — 
Testimony  —  Production 
of  Books,  etc. — Fine  and 
Imprisonment  —  Contempt 
— Power  of  Commission. 

138.  Judicial    Functions    of    Non- 

judicial Bodies — Power  to 
Compel  Corporations  to 
Produce  Books,  etc. — No- 
tice —  Courts  —  Due 
Process  and  Equal  Pro- 
tection —  Contempt  — 
Compensation  to  Witness. 

139.  Jurisdiction  of  Courts  in  Re- 

spect to  Railroad  Commis- 
sions, Generally. 


140.  Same  Subject. 

141.  Same  Subject. 

142.  Jurisdiction  of  Courts — Rail- 

r  o  a  d  Commissioners  — 
Public  Service  Commission 
— Certificate  of  Public  Con- 
venience and  Necessity. 

143.  Jurisdiction    of   Courts    Over 

Rate  Regulations,  Gen- 
erally. 

144.  Same  Subject. 

145.  Legislative  and  Judicial  Func- 

tions as  to  Rate  Regulation 
— Distinctions. 

146.  Equity  Jurisdiction  —  Rail- 

road, etc.,  Rates — Obli- 
gation of  Contracts — In- 
junction— Discrimination. 

147.  Extent   of   Judicial   Interfer- 

ence as  to  Rate  Regula- 
tions. 

148.  Jurisdiction  of  Courts  Before 

Rate  Legislation  Goes  Into 
Effect. 

149.  Jurisdiction  of  Courts  in  Re- 

spect to  Railroad  Commis- 
sions— Rates. 

150.  Same  Subject. 

151.  Same     Subject — Where     Re- 

sort Must  First  Be  Had. 

152.  Same  Subject — A  p  p  e  a  1  to 

State  Supreme  Court  Be- 
fore Suing  in  Federal  Cir- 
cuit Court. 

153.  Jurisdiction  of  Courts  in  Re- 

spect to  Railroad  Commis- 
sions— Rates — When  Con- 
stitutional Question  Not 
Decided. 

154.  Public  Service  Commission — 

Right  to  A  p  p  e  a  1 — Cer- 
tiorari —  Nature  of  Powers. 

155.  Jurisdiction  of  Courts — Suits 

Against  Railroad  Commis- 
sioners —  Whether  Suit 
Against  State. 


Xll 


CONTENTS 


CHAPTER  XI 


JURISDICTION   OF   COURTS  OVER  CORPORATIONS 


§  156.  Essentials  or  Prerequisites  of 
Jurisdiction. 

157.  Federal  Supreme  Court — Ap- 

peal and  Error — Funda- 
mental Question  Is  Juris- 
diction. 

158.  Jurisdiction    of    Federal    Su- 

preme Court  —  Federal 
Question  —  Presentment 
by  Record  —  Special  Alle- 
gation. 

159.  Jurisdiction  —  Appeals  Taken 

After  1891  to  Federal  Su- 
preme Court. 

160.  Jurisdiction    of    Federal   Cir- 

cuit Court  of  Appeals — 
When  Invoked — Diverse 
Citizenship. 

161.  Original  Jurisdiction  of  Fed- 

eral Circuit  Courts  Under 
Judiciary  Act  of  1888. 

162.  Equity    Jurisdiction,    Gener- 

ally. 

163.  Equity  Jurisdiction  —  Ade- 

quate Remedy  at  Law. 

164.  Equity  Jurisdiction  —  Ade- 

quate Remedy  at  Law — 
Collection  of  Taxes — In- 
junction. 


165.  Equity  Jurisdiction  —  Wai- 

ver of  Defense  of  Remedy 
at  Law. 

166.  Equity   Jurisdiction   of  Fed- 

eral Courts  —  Parties. 

167.  Equity    Jurisdiction    to    Re- 

move Cloud  Upon  or  to 
Quiet  Title. 

168.  Jurisdiction    of    Federal   Cir- 

cuit Court  to  Remove  In- 
cumbrance or  Lien  or  Cloud 
Upon  Title  to  Property 
Within  District — A  b  s  e  n  t 
Defendants  —  Process  — 
Service  —  Publication. 

169.  Equity  Jurisdiction   of  Fed- 

eral Circuit  Courts — Pro- 
bate Matters  —  Diverse 
Citizenship. 

170.  When  Equity  Has  no  Juris- 

diction of  Bill  to  Recover 
Lands  of  Railroad  Com- 
pany. 

171.  Jurisdiction    of    Court    of 

Claims  of  New  York — Neg- 
ligence Causing  Death — 
Nonresidents  as  Parties — 
State  as  Common  Carrier. 


CHAPTER  XII 


JURISDICTION  OF  COURTS  OVER  CORPORATIONS  CONTINUED 


172.  What    Constitutes    Contro- 

versy or  Dispute  Between 
P  a  r  t  i  e  s — Jurisdiction  of 
Federal  Circuit  Court — Citi- 
zenship. 

173.  When  Corporation  Is  and  Is 

Not  a  Citizen  —  Pleadings. 

174.  Presumption    as    to    Citizen- 


ship of  Members  of  Cor- 
poration —  President  and 
Stockholders. 

175.  Citizenship  —  Joint-  Stock 

Company  Not  a  Corpora- 
tion for  Jurisdictional  Pur- 
poses. 

176.  Citizenship  —  Limited  Part- 


CONTENTS 


xm 


nership  Not  a  Corporation 
for  Jurisdictional  Purposes. 

177.  Citizenship  —  Board  of  Trus- 

tees Not  a  Corporation  for 
Jurisdictional  Purposes. 

178.  Citizenship  of  Corporation  of 

Two  or  More  States — An- 
cillary or  Permissive  Char- 
ters or  License. 


179.  Same  Subject  - 

Causes. 

180.  Citizenship    — 

Corporations. 

181.  When    Federal 

Jurisdiction  — 


-  Removal  of 
Consolidated 

Court     Has 

-  Corporation 
Proc- 


—  Doing  Business 
ess — Service. 

182.  When  Federal  Court  Has  no 

Jurisdiction  —  Corporation 
— Doing  Business. 

183.  Where   Plaintiffs  Citizens   of 

Different  States. 

184.  Citizenship  —  Territory  Di- 

vided Into  Two  States. 

185.  Jurisdiction  of  Circuit  Court 

— Citizenship  of  Guardian 
in  Suit  Against  Corpora- 
tion. 

186.  Citizenship   of  State   —   Di- 

verse Citizenship. 

187.  Jurisdiction  —  Where 

"Found"— Suit  to  Re- 
strain Enforcement  Un- 
reasonable Rates  by  Rail- 
road Corporation. 


§  188.  Jurisdiction  —  Transitory 
Action  of  Trespass  —  Par- 
ties Residents  of  Other 
States  Than  That  of  Suit. 

189.  When  Federal  Courts  no  Ju- 

risdiction of  Suit  by  As- 
signee of  Chose  in  Action — 
Assignment    of    Judgment. 

190.  Jurisdiction  of  Federal  Courts 

— Suits  by  Assignee — In- 
quiry Relates  to  Time 
When  Suit  Is  Brought. 

191.  Jurisdiction  of  Federal  Courts 

— Suits  by  Assignee  of 
Promissory  Note  or  Chose 
in  Action^ — Exception  to 
Statutory  Prohibition. 

192.  When   Federal   Courts   Have 

Jurisdiction  of  Suits  by  As- 
signee. 

193.  When  Federal  Court  no  Ju- 

risdiction of  Suit  by  As- 
signee— Contract  to  Con- 
vey Land. 

194.  Motive  for  Bringing  Suit  or 

in  Obtaining  Citizenship — 
Collusive  Assignment  or 
Transfer  or  Fraud  to  Give 
Jurisdiction. 

195.  Same   Subject^ — When   Juris- 

diction Defeated. 

196.  Jurisdiction     —     Rearrange- 

ment of  Parties  —  Diverse 
Citizenship. 


CHAPTER  XIII 


JURISDICTION  OF  COURTS  OVER  CORPORATIONS  CONTINUED 


§  197.  Nature  of  Jurisdiction  of 
National  Courts  ■ —  Extent 
of — R  e  s  o  r  t  to  Common 
Law. 

198.  Federal    Jurisdiction — Effect 

of   State   Statutes — Rights 
and  Remedies. 

199.  Power    of    State    to    Limit 


Jurisdiction  of  Its  Courts — 
Power  to  Administer  Com- 
mon Law. 
§  200.  Jurisdiction    —    Consent    of 
Parties. 

201.  Jurisdiction  —  Appearance — 

Consent^ — Waiver. 

202.  Waiver  of  Jurisdictional  De- 


XIV 


CONTENTS 


feet  as  to  Particular  Dis- 
trict. 

203.  Subsequent   Change   in   Con- 

ditions After  Jurisdiction 
of  Circuit  Court  Has  At- 
tached. 

204.  Where  Case  Goes  More  Than 

Once  to  Highest  State 
Court — Final  Judgment — 
Writ  of  Error. 

205.  Jurisdiction    of   Federal   Cir- 

cuit Courts  Under  Ju- 
diciary Act  of  1888— Re- 
moval of  Suits. 

206.  Removal  of  Suits — What  Re- 

cord Must  Show. 

207.  No  Cause  Removable  Unless 

It  Is  One  of  Which  Cir- 
cuit Courts  Given  Original 
Jurisdiction. 

208.  Federal  Question  or  Right — 

When  Court  Has  Juris- 
diction— Instances. 

209.  Federal  Question  or  Rights — 

When  Court  no  Jurisdic- 
tion— Instances. 

210.  Presentment  of  Federal  Ques- 

tion— Record. 

211.  Removal   of  Suits — Corpora- 

tion Created  by  Congress — 
Constitution  and  Laws  of 
United  States — Separable 
Controversy. 


212.  Removal   of  Suits — Corpora- 

tions Created  by  Congress 
— National  Banks. 

213.  Removal  of  Suits — Separable 

Controversy — Joint  Action. 

214.  Removal  of  Suits — Separable 

Controversy — Joint  Action 
— Torts — Diversity  of  Citi- 
zenship. 

215.  Removal  of  Suits — Separable 

Controversy — Joint  Action 
— Fraudulent  Joinder. 

216.  Removal  of  Suits^ — Separable 

Controversy — Joint  Action 
— What  Record  Must  Show. 

217.  Denial    of    Petition    for    Re- 

moval— Petitioners'  Right 
to  Elect  Remedy. 

218.  Removal   of  Suit   Denied   in 

State  Court — Filing  Answer 
and  Record — Asserting  Af- 
firmative Remedy  and  De- 
nial of  Jurisdiction. 

219.  Federal    Circuit    Court    May 

Determine  Removability  of 
Cause  and  Protect  Such 
Jurisdiction — Injunction. 

220.  Effect   Upon   Jurisdiction   of 

State  Court  of  Removal  of 
Cause. 

221.  Jurisdiction    of    Federal    Su- 

preme Court  After  Remov- 
al Ordered  by  Circuit  Court. 


CHAPTER  XIV 


PARTIES 


222.  Preliminary  Statement. 

223.  Power  of  Corporations,  Gen- 

erally. 

224.  Corporation  as  Entity. 

225.  Corporation   as    Entity — Eq- 

uity. 

226.  Directors    of    One    Corpora- 


tion, Directors  of  Another 
Does  Not  Prevent  Suits 
Against — Merger. 
§  227.  Corporations  May  Sue  and 
Be  Sued. 
228.  Corporations  as  Necessary  or 
Indispensable   Parties. 


CONTENTS 


XV 


229.  Same  Subject — Equity. 

230.  Corporation  as  Salvors   May 

Maintain  Suit  for  Salvage. 

231.  Power  of  Corporation  to  Sue 

and  Be  Sued  Includes 
Power  to  Arbitrate. 

232.  State   Bank   Converted    Into 

National  Bank — Right  to 
Sue  in  Former  Name. 

233.  Corporation's  Right  to  Sue — 

Waiver — Foreign  Corpora- 
tion. 

234.  When  Corporation  Not  Enti- 

tled to  Equitable  Considera- 
tion of  Courts — Consolida- 
tion to  Prevent  Competition 
— Fraud  on  Public. 

235.  Consolidation — Successor     of 

Corporation — Rights  of. 


§  236.  Foreign   Corporations  —  Par- 
ties. 

237.  Foreign  Corporation — Parties 

— Presumptions. 

238.  Right  of  Corporation  to  Sue 

as  Affected  by  Dissolution. 

239.  Same  Subject. 

240.  Same  Subject. 

241.  Injuries    to    Persons    in    Ex- 

ecution of  Public  Trust — 
Rule  as  to,  When  Not  Ap- 
plicable to  Private  Corpo- 
rations. 

242.  Injuries    to    Property,    Gen- 

erally. 

243.  Right    of    Consignor    to    Sue 

Corporation. 

244.  Suits   by   and   Against   Con- 

signee. 


CHAPTER  XV 


PARTIES   CONTINUED 


5  245.  Corporation    De    Facto    May 
Sue  and  Be  Sued. 

246.  What    Constitutes    a    Corpo- 

ration De  Facto,  Generally 
—  Legislative  Power  to 
Cure  Defective  Organiza- 
tion. 

247.  Collateral   Attack — De  Facto 

Corporation — Estoppel  to 
Deny  Legal  Corporate  Ex- 
istence. 

248.  Same  Subject — Instances. 

249.  Collateral    Attack — State    or 

Public  Officials  as  Parties 
— De  Facto  Corporation — 
Instances. 

250.  State    or    State    Officers    as 

Indispensable  or  Proper 
Parties  Defendant  in  Suits 
by  Corporation. 

251.  State    or    State    Officers    as 


Parties  Plaintiff  in  Suits 
Against  Corporation. 

252.  United  States  as  Plaintiff — 

Right  to  Recover  From 
Bank — Forgery  of  Payee's 
Name  on  Pension  Checks 
— Internal  Revenue  Taxes 
—  Action  Against  Rail- 
roads. 

253.  Reorganized  or  Successor  Cor- 

poration. 

254.  Same  Subject. 

255.  Same  Subject. 

256.  Levee     Districts     or     Levee 

Boards  Whether  Public  or 
Private  Corporations  May 
Sue  and  Be  Sued. 

257.  Banks  as  Parties,  Generally. 

258.  Suit  by  Corporation  as  Tax- 

payer— Suit  by  Taxpayer 
Against  Corporation. 


XVI 


CONTENTS 


CHAPTER  XVI 

PARTIES     CONTINUED — RIGHTS     AND     LIABILITIES — REMEDIES — 
PROMOTERS — OFFICERS — DIRECTORS — STOCKHOLDERS 


259.  Promoters'  Duties  —  Remedy 

Against  Them  —  Corpo- 
rate Liability  for  Acts  of, 
Generally. 

260.  Internal  Management  of  Cor- 

porations— General    Rule. 

261.  Officers  or  Directors — Duties 

and  Liabilities  of,  Gener- 
ally— Parties. 

262.  Smt  by  Corporation  Against 

Officers  or  Directors  — 
Damages — Accounting. 

263.  Suit  by  Stockholders  Against 

Officers  or  Directors — Cor- 
poration as  Party. 

264.  Suit  by  Stockholders  Against 

Directors  —  Negligence  — 
Maladministration  —  Aver- 
ments Necessary  —  What 
Must  Be  Shown. 

265.  Individual   Liability  of   Offi- 

cers and  Trustees  to  Cred- 
itors Where  Capital  Stock 
Not  Subscribed — Suit  in 
Equity  by  Creditors 
Against  Directors. 

266.  Suits  by  and  Rights  of  Mi- 

tt o  r  i  t  y  Stockholders  — 
When  Corporation  Should 
Be  Made  Party. 

267.  Suits  by  and  Rights  of  Mi- 

tt o  r  i  t  y  Stockholders  — 
Creating  New  Corporation 
—  Consolidation  Agree- 
ment. 

268.  When  Stockholder  May  and 

May  Not  Sue  in  Equity. 


§  269.  Right  of  Stockholders  to  Sue 
in  Equity  in  a  Federal 
Court  for  Surplus  Assets 
After  Decree  of  Forfeiture 
of  Franchises. 

270.  Suit  by  Stockholder  Against 
Trustee  of  Funds  for  Divi- 
dends —  Defense  —  Coun- 
terclaim. 

27  L  Suit  by  Stockholder  to  Com- 
pel Successor  in  Interest  of 
Lessee  to  Pay  Rent  Re- 
served. 

272.  Right  of  Subsequent  Stock- 

holders to  Sue. 

273.  When   Corporation   and    Not 

Stockholders  Should  Sue 
Under  Sherman  Antitrust 
Act. 

274.  When     Corporation     Should 

Sue  or  Be  Made  Party  to 
Suit  by  Stockholder. 

275.  When    Stockholder    May    Be 

Made  Party  Defendant  by 
Court — Refusal  to  Permit 
Stockholders  to  Defend. 

276.  Stockholders     as     Necessary 

Parties  in  Suit  by  Policy 
Holder  Against  Insurance 
Company  for  Accounting 
and  Receivership — Equity 
Jurisdiction. 

277.  Transfers    of    Stock— Pledge 

for  Collateral  Security — 
Liability  of  Pledgee  as 
Stockholder  —  National 
Banks — Bailment. 


CONTENTS 


XVll 


CHAPTER  XVII 

PARTIES    CONTINUED — CREDITORS — STOCKHOLDERS — RIGHTS, 
LIABILITIES   AND    REMEDIES   OF   CONTINUED 


§  278.  Suits    by   Creditors — Parties, 
Generally. 

279.  "Trust     Fund"     Doctrine- 

Capital  Stock  —  Unpaid 
Subscriptions. 

280.  When   Unpaid   Subscriptions 

or  Unpaid  Stock  Are  and 
Are  Not  Assets. 

281.  Stockholders'      Liability     t  o 

Creditors,  Generally. 

282.  Same  Subject. 

283.  Subscriptions  to  Aid   Organ- 

i  z  a  t  i  o  n — Fictitious  and 
Colorable  Subscriptions  — 
Defense  of  Illegality  of 
Corporate  Scheme. 

284.  Whether    Stockholders    Lia- 

bility Contractual,  Statu- 
tory or  Penal. 

285.  Right   of   Action    by   Stock- 

holder After  Receiver  Ap- 
pointed. 

286.  Liability  of  Nonresident 

Stockholder. 

287.  Liability    of    Stockholders — 

Pleading  —  What  Must  Be 
Shown,  Generally. 

288.  Liability  of  Stockholders  to 

Creditors  —  Unpaid  Sub- 
scriptions or  Stock. 

289.  Same  Subject. 

290.  Liability  of  Stockholders  — 

Unpaid  Subscriptions  — 
Parties. 

291.  Liabihty  of  Stockholders  to 

Creditors  Where  Stock  Re- 
ceived Without  Considera- 
tion or  for  Less  Than  Its 
Value — "Bonus  Stock." 

292.  Same    Subject    Continued — 

Stockholders'  Rights. 

B 


§  293.  Consideration  for  Issue  of 
Stock — Property,  etc.  — 
When  Payment  in  Stock 
to  Contractor  Is  Not  a 
Stock  Subscription. 

294.  Stock  Issued  for  Property — 

Valuation  Should  Be  Fair 
and  Just  —  Necessity  of 
Good  Faith  in  Transaction. 

295.  Stock  Issued  for  Property — 

Material  Overvaluation  — 
Stockholders  Not  Necessar- 
ily Liable  to  Creditors 
Therefor — Good  Faith. 

296.  Stock  Issued  for  Property — 

Shareholder  May  Be  Liable 
Where  Over  valuation 
Shows  Fraud  Upon  Cred- 
itors Though  None  In- 
tended. 

297.  Stock  Issued  for  Property — 

Valueless  Property  —  Ma- 
terial Overvaluation. 

298.  Stock    Issued    for    Property 

Which  Subsequently  Be- 
comes Valueless  or  Con- 
sideration Fails. 

299.  Judgment  Creditors  —  Stock- 

holders' Liability  to,  for 
Unpaid  Stock — Parties. 

300.  Amount  of  Creditor's  Recov- 

ery on  Stock  May  Be  Lim- 
ited by  His  Knowledge  of 
Agreement  Under  Which 
Shares  Issued. 

301.  Creditor  or  Stockholder  May 

Sue  After  Demand  Upon 
and  Refusal  of  Corporate 
Authorities  .to  Act — Stock- 
holder May  Defend. 

302.  When  Demand  Upon  Corpo- 


XVlll 


CONTENTS 


rate  Authorities  and  Their 
Refusal  a  Condition  Prece- 
dent to  Suit. 
§  303.  When  Demand  Upon  and 
Refusal  of  Corporate  Au- 
thorities Not  a  Condition 
Precedent  to  Suit. 

304.  Effect   of   Demand   and   Re- 

fusal Dependent  Upon  Cir- 
cumstances— Discretion  of 
Directors — Simulated  De- 
mand. 

305.  Demand    Upon    and   Refusal 

of  Corporate  Authorities — 
Necessity  of  Alleging  and 
Showing  Same. 

306.  Same  Subject. 

307.  Enforcing  Stockholders'  Lia- 

bility —  Exhausting  Rem- 
edies Against  Corporation 
— When  Judgment  and  Ex- 
ecution Unsatisfied  Are 
Conditions    Precedent. 


308. 


309. 


310. 


311. 


312. 


Enforcing  Stockholders'  Lia- 
bility —  Exhausting  Rem- 
edies Against  Corporation 
— When  Judgment  and  Ex- 
ecution Unsatisfied  Are 
Not  Conditions  Precedent. 

Stockholders'  Liability — Dis- 
solution as  Condition  Prece- 
dent to  Enforcing  Same. 

Effect  of  Equity  Rule  94— 
When  Demand  Upon  Di- 
rectors for  Relief  Is  and  Is 
Not  Condition  Precedent — 
Stockholders  —  Right  to 
Protect  Corporation  When 
Directory  Derelict. 

Judgment  Creditor's  Right  to 
Sue — Parties  —  Conditions 
Precedent. 

Order  of  Court  Requiring 
Remedies  to  Be  Exhausted 
— Statute  Limitations. 


CHAPTER  XVIII 


ACTIONS   AT   LAW — LIABILITY,    GENERALLY 


§  313.  Form    of    Action— Effect    of 
Code  Provisions,  Generally. 

314.  Actions  Under  Statutes,  Gen- 

erally. 

315.  Ejectment. 

316.  Forcible  Entry  and  Detainer. 

317.  Liability   of   Corporations   to 

Third    Persons    for    Negli- 


gent, Willful,  Wanton  or 
Malicious  Acts  of  Serv- 
ants. 
§  318.  Negligent  Acts  of  Corpora- 
tions, Generally. 
319.  Election — Form  of  Action — 
Contract  or  Tort;  Waiver. 


CHAPTER  XIX 


ACTIONS    AT    LAW    CONTINUED — ACTIONS    EX    CONTRACTU 


320.  Action    Ex    Contractu — Con-  §  323.  Assumpsit    By    and    Against 

tracts  Express  and  Implied  Banks. 

— Instances,  Generally.  324.  Debt. 

321.  Assumpsit.  325.  Covenant. 

322.  Assumpsit — Account   Stated.  326.  Book  Account. 


CONTENTS 


XIX 


CHAPTER  XX 


ACTIONS  AT  LAW  CONTINUED — ACTIONS  EX  DELICTO 


327.  Actions  Ex  Delicto,  Generally.    §  334. 

328.  Trespass.  335. 

329.  Trespass  for  Mesne  Profits.  336. 

330.  Trespass  Quare  Clausum  Pre-  337. 

git. 

331.  False  Imprisonment.  338. 

332.  Trespass  on  the  Case.  339. 

333.  When   Action   on   Case   Lies  340. 

Concurrently     With    As-  341. 
sumpsit. 


Nuisance. 

Libel  and  Slander. 

Malicious  Prosecution. 

Wrongfully  Suing  Out  At- 
tachment. 

Conspiracy — Instances. 

Fraud  and  Deceit — Instances. 

Trover  and  Conversion. 

Replevin — Claim  and  Deliv- 
ery. 


CHAPTER  XXI 


ACTIONS   AT   LAW   CONTINUED — MANDAMUS 


342.  Mandamus  Defined. 

343.  Nature  of  Mandamus. 

344.  Nature    of    Mandamus    Con- 

tinued—Is a  Discretionary 
Writ. 

345.  When  Mandamus  Lies,  Gen- 

erally. 

346.  Mandamus    to    Control    Ju- 

dicial Discretion. 

347.  Mandamus    Will    Not    Be 

Granted  When  Fruitless 
and  Unavailing. 

348.  Mandamus     Does     Not     Lie 

Where  There  Is  a  Plain  and 
Adequate  Remedy. 

349.  Statutory     Remedies — When 

and  When  Not  Exclusive  of 
Mandamus. 

350.  When  Mandamus  Is  the 

Proper  Remedy  Although 
There  Is  Another  Remedy 
—  Action  for  Damage  — 
Equity. 

351.  When  Remedy  Is  by  Action 

at  Law  and  Not  by  Man- 
damus. 


§  352.  When  Proper  Remedy  Is 
Quo  Warranto  and  Not 
Mandamus. 

353.  When     Remedy     to     Forfeit 

Franchise  and  Not  Man- 
damus, Is  Proper. 

354.  When  Remedy  in  Equity  and 

Not  by  Mandamus — In- 
junction —  Mandatory  In- 
junction. 

355.  Mandamus — Enforcement    of 

Private  or  Personal  Rights 
— Contractual  Relations. 

356.  When  Writ  Lies  to  Enforce 

Discretionary  or  Ministe- 
rial Duties. 

357.  When  Writ  Does  Not  Lie  to 

Enforce  Discretionary  Du- 
ties. 

358.  When    Mandamus    Lies    and 

Does  Not  Lie  to  Compel 
Filing  Articles  of  Incorpo- 
ration and  Certificates — 
Issuance  of  Certificates. 

359.  Wh«n  Mandamus  Lies — Elec- 

tion of  Corporate  Officers. 


XX 


CONTENTS 


360.  When     Mandamus     Lies     to 

Compel  Order  RevcJiing 
Charter  to  Be  Vacated. 

361.  When  Mandamus  Lies  to  Re- 

instate Member. 

362.  Mandamus    Lies    to    Enforee 

Right  of  InspecMon  of 
Books  of  Corporation. 

363.  Mandamus    Lies    to    Compel 

Surrender  of  Corporation's 
Books,  Seal  and  Papers. 

364.  Mandamus  to  Compel  Trans- 

fer of  Certificates  of  Stock 
— Lost  Certificates. 
3G5.  Mandamus  to  Control  Rates, 
Charges    and    Fares — Dis- 
crimination. 

366.  When     Mandamus     Lies 

Against  Common  Carrier, 
Generally. 

367.  Mandamus  —  Limitation     o  f 

Remedy  Under  Act  to  Reg- 
ulate Commerce  —  Inter- 
state Commerce  Commis- 
sion. 

368.  When    Mandamus    Lies    and 

Does  Not  Lie  Against  Rail- 
road Company. 

369.  When    Mandamus    Lies    and 

Does     Not      Lie     Against 


Street       Railroad       Com- 
pany. 

370.  When  Street  Railway  Com- 

pany  Is  and   Is   Not  En- 
titled to  Mandamus. 

371.  When    Mandamus    Lies    and 

Does  Not  Lie  Against  Tele- 
phone Companies. 

372.  When    Mandamus    Lies    and 

Does  Not  Lie  Against  Tele- 
graph Companies. 

373.  When    Mandamus    Lies    and 

Does  Not  Lie  Against  Wa- 
ter Companies. 

374.  Jurisdiction     of      Mandamus 

Proceedings. 

375.  Proper  or  Necessary  Parties, 

Generally. 

376.  Parties   Plaintiff— P  r  i  v  a  t  e 

Persons. 

377.  Parties — Attorney-General. 
578.  Parties — Defendants. 

379.  Necessity   of  Demand   Upon 

or  Notice  to  Party  Before 
Bringing  Mandamus. 

380.  Defenses    Available,     Gener- 

ally. 

381.  Pleadings — S ufficiencyof 

Showing   —    Demurrer   — 
Judgment — Appeal. 


CHAPTER  XXII 


ACTIONS    AT   LAW   CONTINUED — QUO   WARRANTO 


382.  Nature  of  Quo  Warranto. 

383.  When  Quo  Warranto  Not  Ex- 

clusive R  e  m  e  d  y — When 
Proper  Remedy. 

384.  When    Special    or   Statutory 

Actions  or  Proceedings  Ex- 
clusive. 

385.  Quo  Warranto  Lies  in  Case  of 

Unlawful  Exercise  of  Corpo- 
rate Power  or  Franchises. 

386.  Quo   Warranto  to  Forfeit   or 


Annul   or  Test  Franchises 
of  Corporation — Ouster. 
§  387.  Quo  Warranto  to  Forfeit  Only 
Misused  Franchise  and 
Leave  Corporation  Intact. 

388.  Quo     Warranto     to     Control 

Rates  and  Charges. 

389.  Jurisdiction  of  Quo  Warranto 

Proceedings. 

390.  Parties  —  State  —  Attorney- 

General. 


CONTENTS 


XXI 


391.  Parties  —  Plaintiffs  —  De-    §  393. 

fendants — Joinder. 

392,  Seeking  Other  Relief  as  Con-       394. 

dition  Piccedent  to  Grant- 
ing Qxio  Warranto. 


Pleadings — S  ii  ffi  c  i  e  n  c  y  of 

Showing. 
Defenses  Available,  Cien- 

erally. 


CHAPTER  XXIII 


ACTIONS    AT   LAW    CONTINUED — PROHIBITION 


395.  Nature   of   Prohibition,   Gen- 

erally. 

396.  Nature    of    Prohibition    Con- 

tinued— Is  a  Discretionary 
Writ — Effect  of  Judgment 
or  Sentence. 

397.  Prohibition    Does     Not     Lie 

Where  There  Is  a  Plain 
and  Adequate  Remedy — 
Exhausting  Remedies. 


§  398.  Where    Act    Sought    to    Be 
Prohibited  Has  Been  Done. 

399.  Prohibition  to  Court  Without 

Jurisdiction    or    Where    It 
Exceeds  Jurisdiction. 

400.  Prohibition      t  o      Admiralty 

Court. 

401.  Prohibition — Parties,    Gen- 

erally. 


CHAPTER  XXIV 


EQUITABLE    REMEDIES 


402.  Equity,  Generally. 

403.  When     Equity     Is     Without 

Jurisdiction,  Generally. 

404.  Equity  Jurisdiction — Parties, 

Generally. 

405.  What  Is  Not  And  Is  a  Con- 

dition Precedent  to  Suit — 
Quieting  Title  —  Specific 
Performance. 

406.  Equity — Adequate     Remedy 

at  Law. 

407.  Contract  for  Co-operation  in 

Procuring  Municipal  Fran- 
chise —  Validity  of  — 
Public  Policy  —  Equity  — 
When  Remedy  at  Law  Ad- 
equate— Illustration. 

408.  Adequate  Statutory  Remedy 

— Application  to  Munici- 
pal Body  as  Condition 
Precedent  to  Equity  Suit — 
Rate  Regulation. 


409.  Irreparable  Injury. 

410.  Multiplicity  of  Suits. 

411.  Fraud  and  Trusts. 

412.  Reformation  of  or  Relief  From 

Written  Instruments  or 
Contracts. 

413.  Accounting. 

414.  Corporation  Mortgages  — En- 

forcement of — Foreclosure 
— Rights  and  Remedies  of 
Parties — General  Instances. 

415.  Corporation  Liens  and  Mort- 

gages— Equity  Jurisdiction 
of  Foreclosure  —  Conflict- 
ing Claims  to  Possession. 

Corporation  Liens  and  Mort- 
gages —  Enforcement  of — 
Foreclosure — Parties. 

Rights  of  Parties  ITpon  Fore- 
closure of  Mortgages — Jun- 
ior Bondholder  —  Judg- 
ment Creditor  —  Priorities 


416. 


417. 


XXJl 


CONTENTS 


— Proceeds  of  Sale — Ad- 
justment of  Claim — Ac- 
counting— Instances. 
§  418.  Foreclosure  and  Sale  of  Rail- 
road Mortgage  —  Distribu- 
tion of  Proceeds — Unse- 
cured Creditors — Bank  as 
General  Creditor — P  r  i  o  r 
Mortgagee. 

419.  Foreclosure  of  Railroad  Mort- 

gage— Rights  of  Purchaser 
— Title  and  Obligations. 

420.  Foreclosure  and  Sale — Reor- 

ganization Agreements  by 
Purchasers — Exceptions  to 
Sale — Constitutional    Law. 

421.  Injunction,    Generally  —  I  n- 

stances. 

422.  Injunction — Jurisdiction. 

423.  Jurisdiction  to   Enjoin   Pros- 

ecuting Action  in  Another 
State — Jurisdiction  of  Fed- 
eral Court  —  Injunction 
From  to  State  Court. 

424.  Injunction    Against    Officers, 

Directors  or  Stockholders. 

425.  Injunction  —  Rate   Regula- 

tion. 

426.  Injunction — By  and   Against 

Railroads  and  Street  Rail- 
roads. 

427.  Injunction — By  and  Against 

Telegraph  and  Telephone 
Companies. 

428.  I  n  j  u  n  c  t  io  n — Interference 


With  Departmental  Offi- 
cers or  Executive  Depart- 
ment— Postmaster. 
§  429.  Injunction  to  Protect  Fran- 
chises of  Corporation  or  to 
Prevent  Their  Forfeiture. 

430.  Injunction  —  Criminal   Pro- 

ceedings —  When  Equity 
Cannot  and  Can  Enjoin. 

431.  Injunction   —    Nuisances   — 

Bill  in  Equity  to  Abate. 

432.  Injunction   —    Nuisances   — 

Parties  ^-  State  or  Attor- 
ney-General — Corporations 
— Joinder. 

433.  Injunction    to    Restrain    En- 

forcement of  Orders  of  In- 
terstate Commerce  Com- 
mission. 

434.  Bill  Lies  in  Equity  to  Revise 

Ruling  of  Railroad  Com- 
missioners. 

435.  E  q  u  i  t  y — Cancellation   and 

Rescission. 

436.  Cancellation,     Rescission     or 

Setting  Aside  Sale  of  Cor- 
porate Stock — Contracts  to 
Prevent  Competition — Pre- 
tended Purchase  of  Stock. 

437.  Specific  Performance. 

438.  Specific    Performance  —  Dis- 

cretion of  Court. 

439.  Specific   Performance  —  Con- 

tract to  Sell  Corporate 
Stock. 


CHAPTER  XXV 

PENALTIES — OFFENSES — CRIMINAL  LIABILITY  OF  CORPORATIONS 


§  440.  Penalties — Suit  by  Consignee 
to  Recover. 

441.  Right    to    Inspect    Books    of 

Corporation — Penalties   for 
Refusal  to  Allow. 

442.  Telegraph     and     Telephone 


Companies  —  Discrimina- 
tion— Penalties . 

443.  Offenses    Against    United 

States. 

444.  Power  of  Congress — To  What 

Extent  Corporation  Can  Be 


CONTENTS 


XXlll 


Charged  Criminally  for 
Agents'  Acts — C  o  m  m  o  n 
Carriers — Rates . 
§  445.  Police  Power  of  States — 
Crimes  and  Penalties  — 
Combinations  in  Restraint 
of  Trade — Extent  of  Ju- 
dicial Interference  by  Fed- 
eral Courts. 

446.  Corporation    Criminally    Lia- 

ble—May Be  Indicted. 

447.  Indictment    of    Corporations 

for  Nuisances. 

448.  Insurance  Companies  — Com- 

binations —  Conspiracies  — 
Insurance  as  "  Commod- 
ity " —  When  and  When 
Not  Indictable  Offenses. 

449.  Criminal  Offenses  by  Corpo- 

rations —  Employment  of 
Children  Under  Certain 
Age — Penalties. 

450.  Indictment — While  a  Corpo- 

ration Might  Be  Liable  for 
Misfeasance  Under  Certain 
Definitions  of  Manslaugh- 
ter It  Cannot  Be  Guilty  of 
Latter  Under  New  York 
Penal  Code. 
45  L  Construction  of  Antitrust  Act 
—  What  Prohibitions  of 
Embrace  —  Intent     of  — 


What  Are  and  Are  Not  Il- 
legal Combinations  Within. 
§  452.  Construction  of  Elkins  Act — 
Criminal  Intent — Accept- 
ing Rebates — When  Carrier 
Liable  as  Party  to  Joint 
Rate. 

453.  Construction  of  Elkins  Act — 

"Device"  to  Obtain  Re- 
bates. 

454.  Penal   Statute  —  Retroactive 

Effect — Liability  Under  of 
Party  Carrying  Out  Illegal 
Agreement  Executed  Prior 
to  Its  Passage. 

455.  State  Jurisdiction  Over  Vio- 

lation of  Antitrust  Law 
Where  Agreement  Made 
Out  of  State  —  Extraterri- 
torial Effect  of  Conspiracy, 
etc.,  Statute. 

456.  Constitutional  Law  —  Elkins 

Act — Liquor  Laws — Regu- 
lation of  Carriers — Exces- 
sive Fines. 

457.  Sufficiency  of  Indictment. 

458.  Discrimination     in     Rates — 

Rebates  —  Elkins  Act — 
Criminal  Law — Place  of 
Trial  —  Single  Continuous 
Offense. 


TABLE  OF  CASES  CITED 

A  Albany  Hardware  &  Iron  Co.  v.  Day, 
42  N.  Y.  Supp.  97],  §339. 

Aberdeen  Bank  v.  Chehalis  Co.,  1G6  Albright  v.  Texas,  S.  F.  &  N.  R.  Co., 

U.  S.  440,  §  71.  8  N.  M.  422,  §  279. 

Aberdeen   Commercial    Co.,    etc.,    v.  Albuquerque    Bank    v.    Perea,     147 

Great  North  of  Scotland  Ry.  Co.,  U.  S.  87,  §  123. 

3  Ry.  &  Can.  Traf.  Cas.  205,  §  113.  Aldine  Mfg.  Co.  v.  Phillips,  118  Mich. 

Acord  V.  Western  Pocahontas  Corpo-  162,  §  415. 

ration,  156  Fed.  989,  §§  167,  194,  Aldrich   v.   Campbell,   97  Fed.   663, 

198.  §  421. 

Adair  v.  United  States,  208  U.  S.  161,  Aldrich  v.  Press  Printing  Co.,  9  Minn. 

§§  26,  42.  133,  §  385. 

Adams  Express  Co.  v.  Indiana,  165  Aldridge  v.  Fore  River  Shipbuilding 

U.  S.  255,   §  61.  Co.,  201  Mass.  131,  §  254. 

Adams    Express    Co.    v.    Iowa,    196  Alexander    v.    Searcy,    81    Ga.    536, 

U.  S.  147,  §  11.  §§  266,  272,  302. 

Adams  Express  Co.  v.  Kentucky,  206  Alexander  v.  United  States,  201  U.  S. 

U.  S.  12tt,  §§  52,  456,  457.  117,  §  137. 

Adams  Express  Co.  v.  Kentucky,  214  Alexandria   Canal  Co.   v.   Swann,   5 

U.  S.  218,  §§  1,  2,  7,  8,  42,  43,  44,  How.  (46  U.  S.)  83,  §  231. 

47,  51,  52,  78,  208.  Alix,  In  re,  166  U.  S.  136,  §  396. 

Adams    Express    Co.    v.    Ohio,    165  Allen  v.  Curtis,  26  Conn.  256,  456, 

U.  S.   194,   §  61.  §§  263,  301,  305. 

Adams    Express    Co.    v.    Ohio,    166  Allen   v.    Milwaukee,    128  Wis.   678, 

U.  S.  185,  §  61.  §  236. 

Addyston  Pipe  &  Steel  Co.  v.  United  Allen  v.  Riley,  203  U.  S.  347,  §  18. 

States,   175  U.  S.  211,   §§  11,  46,  Allen  v.  Southern  Pac.  Co.,  173  U.  S. 

457.  479,  §  209. 

JEtnsi  Ins.  Co.  v.  Commonwealth,  106  Allgeyer  v.  Louisiana,  165  U.  S.  578, 

Ky.  864,  §  448.  §§  10,  12,  17. 

Ahem,  Matter  of,  v.  Elder,  195  N.  Y.  Allyn's  Appeal,  81  Conn.  534,  §§  3,  7. 

493,  §  3.  Alton  Ry.  &  Illuminating  Co.  v.  Cox, 

Aiken  v.  Holyoke  Street  Ry.  Co.,  184  84  111.  App.  202,  §  317. 

Mass.  269,  §  317.  Ambler  v.    Leach,    15  W.   Va.   677, 

Alabama  Great  Southern  Rd.  Co.  v.  §  167. 

Carroll,  84  Fed.  772,  §  195.  American  Alkali  Co.  v.  Campbell,  113 

Alabama  Great  Southern  Ry.  Co.  v.  Fed.  398,  §  247. 

Thompson,  200  U.  S.  206,  §§  206,  American    Banana    Co.    v.    United 

213,  214,  215,  216.  Trust  Co.,  213  U.  S.  347,  §451. 

Alabama  Nat.  Bank  v.  Rivers,   116  American     Bell    Telephone    Co.     v. 

Ala.  1,  §  323.  United  States,  68  Fed.  542,  §  129. 

XXV 


XXVI 


TABLE   OF  CASES   CITED 


American  Book  Co.  v.  Gates  (U.  S. 

C.  C),  85  Fed.  729,  §  335. 
American  Bridge  Co.  v.  Heidelbach, 

94  U.  S.  798,  §  417. 
American  Building   &   L.   Assoc,   v. 

Bear,  48  Neb.  455,  §  .339. 
American  Cable  R.  Co.  v.  Citizens' 

R.  Co.,  44  Fed.  484,  §  163. 
American  Construction  Co.  v.  Jack- 
sonville, T.  &  K.  VV.  Ry.  Co.,  148 

U.  S.  372,  §  159. 
American     Creosote     Works    v.     C. 

Lembeke  &  Co.  (U.  S.  C.  C),  165 

Fed.  809,  §  254. 
American  Express  Co.  v.  Crawley,  88 

Miss.  525,   §  314. 
American  Express  Co.  v.  Iowa,  196 

U.  S.  133,  §  11. 
American  Express  Co.  v.  Mullins,  212 

U.S.  311,  §208. 
American    Express    Co.    v.    United 

States,  212  U.  S.  522,  §  32. 
American  Ins.  Co.  v.  Fisk,  1  Paige 

Ch.  (N.  Y.)  90,  §  422. 
American  Mfg.  Co.  v.  Weintraub,  115 

N.  Y.  Supp.  88,  §  89. 
American  Nat.  Bank  v.  Supplee,  115 

Fed.  658,   §  284. 
American  Radiator  Co.   v.   Kinnear 

(Wash.,     1909),     105     Pac.     630, 

§§  265,  311. 
American    Sugar    Refining    Co.     v. 

Fancher,  145  N.  Y.  552,  §  163. 
American  Sugar  Refining  Co.  v.  New 

Orleans,  181  U.  S.  277,  §  160. 
American  Sulphur  Min.  Co.  v.  Bren- 

nan,  20  Colo.  App.  439,  §  129. 
American  Teleph.    Co.   v.   Connecti- 
cut   Teleph.    Co.,   49   Conn.    352, 

§442. 
American  Union  Teleg.  Co.  v.  West- 
ern Union  Teleg.  Co.,  67  Ala.  26, 

§427. 
American  Waterworks  Co.  v.  Farm- 
ers' Loan  &  Trust  Co.,  73  Fed.  956, 

§416. 
American  Waterworks  v.  State,  46 

Neb.  194,  §  356. 


American  Well  Works  v.  De  Aguayo 

(Tex.   Civ.  App.),  53  S.    W.  350, 

§181. 
Ames    V.     American    Telephone    & 

Teleg.  Co.  (U.  C.  S.  C),  166  Fed. 

820,  §273. 
Ames    V.    Kansas,    111    U.    S.    449, 

§§  205,  382. 
Ames  V.  Union  Pac.  R.  Co.,  64  Fed. 

165,  §  146. 
Anderson   v.    Dunn,    6    Wheat.    (19 

U.  S.)  204,  §  137. 
Anderson  v.  United  States,  171  U.  S. 

604,  §  457. 
Andes  v.  Ely,  158  U.  S.  312,  §§  246, 

248. 
Andrews  v.  Bacon  (U.  S.  C.  C),  38 

Fed.  777,  §  290. 
Andrews   Bros.   Co.   v.   Youngstown 

Coke  Co.,  86  Fed.  586,  §  175. 
Angle  V.  Chicago,  St.  Paul,  M.  &  O. 

Ry.  Co.,  151  U.  S.  1,  §§  4,  426. 
Anglo-American  Land,   Mortgage  & 

Agency  Co.  v.  Cheshire  Prov.  Inst., 

124  Fed.  464,  §  239. 
Anglo-American  Land,  M.  &  A.  Co. 

V.  Lombard,  132  Fed.  729,  §  284. 
Anglo-American    Provision    Co.     v. 

Davis  Provision  Co.,   No.    1,    191 

U.  S.  373,  §  199. 
Anne  Arundel  County  v.  Baltimore 

Sugar     Ref.     Co.,    99     Md.     481, 

§356. 
Antopoeda  Baptist  Church,  Trustees 

of,   V.    Mulford,   8   N.    J.    L.    182, 

§  321. 
Appeal  of.     See  name  of  party. 
Arkansas  v.  Kansas  &  T.  Coal  Co.  & 

S.  F.  Ry.  Co.,  183  U.  S.  185,  §§  206, 

207,  209. 
Arkansas  Building  &  Loan  Assoc,  v. 

Madden,  175  U.  S.  269,  §  164. 
Arkansas  Coal,  G.  F.  C.  &  Mfg.  Co.  v. 

Haley,  62  Ark.  144,  §  201. 
Arkansas  Railroad  Rates,  In  re,  168 

Fed.  720,  §§  106,  150. 
Arkansas,  State  of,  v.  Kansas  &  T. 

Coal  Co.,  96  Fed.  353,  §  186. 


TABLE   OP  CASES   CITED 


XXVll 


Armour  v.  E.  Bennet's  Sons  (U.  S. 

C.  C.  A.),  123  Fed.  56,  §  254. 
Armour  Packing  Co.  v.  United  States, 

209  U.  S.  56,  §§  '14,  452,  453,  457, 

558. 
Armstrong  v.  Emmet,  16  Tex.  Civ. 

App.  242,  §  91. 
Asbell  V.  Kansas,  209  U.  S.  251,  §§  42, 

43,  44,  58. 
Ascanaba  Co.  v.  Chicago,  107  U.  S. 

678,  §  2. 
Ashland   v.    Wheeler,   88   Wis.   607, 

§386. 
Ashley  v.  Board  of  Supervisors,  83 

Fed.  534,  §  195. 
Ashley  v.  Ryan,  153  U.  S.  436,  §§  19, 

60. 
Astiazarin  v.  Santa  Rita  Min.  Co., 

148  U.  S.  80,  §  129. 
Atchfalaya  Bank  v.  Dawson,  13  La. 

R.  497,  §  388. 
Atchison,  Topeka  &  Santa  Fe  Rd. 

Co.  v.  Denver  &  New  Orleans  Rd. 

Co.,  110  U.  S.  667,  §  40. 
Atchison,  Topeka  &  Santa  Fe  Ry. 

Co.   v.   Matthews,    174   U.   S.   96, 

§§  13,  30. 
Atchison,  Topeka  &  Santa  Fe  Ry. 

Co.  V.  Sowers,  213  U.  S.  55,  §§  3,  4, 

5,  208. 
Atchison,  Topeka  &  Santa  Fe  Ry.  Co. 

V.  State   (Okla.,   1909),   100  Pac. 

11,  §  122. 
Atchison,  Topeka  &  Santa  Fe  Rd. 

Co.  V.  Wilkinson,  55  Kan.  83,  §  319. 
Atkin    V.    Kansas,    191    U.    S.    207, 

§§  6,  27. 
Atlanta,  K.  &  N.  Rd.  Co.  v.  Barker, 

105  Ga.  534,  §  315. 
Atlantic    &    Pacific    Teleg.    Co.    v. 

Philadelphia,  190  U.  S.  160,  §§  31, 

60,  137. 
Atlantic  City  Rd.,  In  re,  164  U.  S. 

633,  §§  348,  374. 
Atlantic  Coast  Line  R.  Co.  v.  Dun- 
ning, 166  Fed.  850,  §  178. 
Atlantic    Coast    Line    Ry.    Co.     v. 

Mazursky,  216  U.  S.  122,  §  440. 


Atlantic  Coast  Line  Rd.  Co.  v.  North 

Carolina  Corporation  Commission, 

206  U.  S.  1,  §§  21,  34,  50,  119,  141. 
Atlantic     Coast    Line     Rd.     Co.     v. 

Wharton,  207  U.  S.  328,  §§  42,  47, 

50. 
Atlantic  Express  Co.  v.  Wilmington 

&  Weldon  Ry.  Co.,  Ill  N.  C.  463, 

§140. 
Atlas  Ry.  Supply  Co.  v.  Lake  &  River 

Ry.  Co.,  134  Fed.  503,  §  239. 
Atlas  Shoe  Co.  v.  Rechard,  102  Me. 

197,  §  339. 
Attorney-General  v.  Adonai   Shomo 

Corp.,  167  Mass.  424,  §  390. 
Attorney-General     v.     Looker,     111 

Mich.  498,  §  383. 
Attorney-General  v.  Moliter,  26  Mich. 

444,  §  377. 
Attorney-General  v.  Old  Colony  Rd. 

Co.,  160  Mass.  62,  §  113. 
Attorney-General     v.     Preston,     56 

Mich.  177,  §3. 
Attorney-General  v.  Superior  &  St. 

C.  Rd.  Co.,  93  Wis.  604,  §  393. 
Auerbach  v.  International  Wolfram 

Lampken  Aktien  Gesellschaft,  173 

Fed.  624,  §  173. 
Augir  v.  Ryan,  63  Minn.  373,  §  289. 
Aultman  v.  Forgery,   10  Ind.   App. 

397,  §  341. 
Aultman's  Appeal,  98  Pa.  St.   505, 

§284. 
Austin  v.  Tecumseh  Nat.  Bank,  49 

Neb.  412,  §  254. 
Austin  v.  Tennessee,  179  U.  S.  343, 

§53. 
Avent  v.  Deep  River  Lumber  Co., 

174  Fed.  298,  §  218. 
Ayers,  In  re,  123  U.  S.  443,  §  155. 

B 

Babcock  v.   Goodrich,  47  Cal.   488, 

§368. 
Bacon  v.  Irvine,  70  Cal.  221,  §  304. 
Bacon  v.  Michigan  Cent.  Rd.  Co.,  55 

Mich.  224,  §  335. 


XXVlll 


TABLE   OF  CASES   CITED 


Bacon  v.   Robertson,    IS   How.    (5'J 

U.  S.)  480,  §  269. 
Bacon   v.    Walker,   204    U.   S.   311, 

§7. 
Bagshaw  v.  Railway,  7  Hare,   114, 

§229. 
Bailey  v.  Tillinghast,  99  Fed.  808, 

§247. 
Baker  v.  Appleton  &  Co.,  95  N.  Y. 

Supp.  125,  §  254. 
Baker  v.  Neff,  73  Ind.  68,  §  247. 
Baker  v.  Spaulding  Bros.,  71  Vt.  169, 

§17. 
Baldwin  v.  Chicago,  N.  W.  R.  Co.,  86 

Fed.  167,  §  180. 
Baldwin   v.   Stark,    107   U.   S.    463, 

§  129. 
Bale    V.    Michigan    Tontine    Invest. 

Co.,  132  Mich.  479,  §  413. 
Ball  V.  Rutland  Rd.  Co.  (U.  S.  C.  C), 

93  P\>d.  513,  §  301. 
Baltimore    v.     Baltimore    Trust    & 

Guar.  Co.,  166  U.  S.  673,  §  21. 
Baltimore  &  Ohio  Rd.   Co.   v.   An- 
drews, 50  Fed.  728,  §  160. 
Baltimore  &  Ohio  Rd.  Co.  v.  Ford, 

35  Fed.  170,  §  201. 
Baltimore  &  Ohio  Rd.   Co.   v.   Pit- 
cairn    Coal    Co.,    215    U.    S.    481, 

§§  106a,  131,  135a,  367. 
Baltimore  &  Ohio  Rd.  Co.,  Ex  parte, 

108  U.  S.  566,  §  374. 
Baltimore    &    Potomac    Rd.    Co.    v. 

Fifth  Baptist  Church,   137   U.  S. 

568,  §§  245,  246. 
Baltimore  &  Potomac  R.  R.  Co.  v. 

Fifth  Baptist  Church,   108  U.  S. 

317,  §  334. 
Baltimore  Consol.  Ry.  Co.  v.  Pierce, 

89  Md.  495,  §  317. 
Baltimore  University  v.  Colton,  98 

Md.  623,  §§  350,  355. 
Bangs    V.    Selden,    13    How.    Prac. 

(N.  Y.)  274,  §  91. 
Bank  v.  CarroUton  Ry.,  11  Wall.  (78 

U.  S.)  624,  §  229. 
Bank   v.    Supervisors,    7    Wall.    (74 

U.  S.)  26,  §  73. 


Bankers'  Union  v.  Crawford,  67  Kan. 

449,  §  223. 
Bank   of   British   North  America  v. 

Barling,  44  Fed.  641,  §  198. 
Bank  of  Columbia  v.   Patterson,   7 

Cranch  (11  U.  S.),  299,  §321. 
Bank  of  Commerce  v.  New  York,  2 

Black  (67  U.  S.),  620,  §  73. 
Bank  of  Commerce  v.  Setittle,   166 

U.  S.  463,  §  71. 
Bank  of  Commerce  v.  Tennessee,  161 

U.  S.  134,  §§  68,  77. 
Bank  of  Fort  Madison  v.  Alden,  129 

U.  S.  372,  §  402. 
Bank   of   Leesville   v.   Wingate,    123 

La.  386,  §  414. 
Bank  of  Louisiana  v.  Wilson,  19  La. 

Ann.  1,  §  240. 
Bank  of  Metropolis  v.   f  iuttschlink, 

14  Pet.  (39  U.  S.)  19,  §  323. 
Bank  of  Mississippi  v.   Duncan,   52 

Miss.  740,  §  85. 
Bank  of  Shasta  v.  Boyd,  99  Cal.  604, 

§  248. 
Bank  of  United  States  v.  Dandridge, 

12  Wheat.  (25  U.  S.),  91,  §§  224, 

227. 
Bank  of  United  States  v.  Deveaux,  5 

Cranch  (9U.  S.),4,  §  181. 
Banks,  The,  v.  The  Mayor,  7  Wall. 

(74  U.  S.)  16,  §  73. 
Bank  Tax  Case,  2  Wall.  (69  U.  S.) 

200,  §  73. 
Barber  Asphalt  Paving  Co.  v.  Village 

of  Highland  Park,  156  Mich.  178, 

§§  348,  380. 
Barbier  v.  Connolly,   113  U.  S.  27, 

§§9,  13. 
Barden  v.  Northern  Pacific  Rd.,  154 

U.  S.  288,  §  129. 
Bardon  v.  Land  &  River  Imp.  Co., 

157  U.  S.  327,  §§  167,  402,  404. 
Barkley  v.  Levee  Commissioners,  93 

U.  S.  258,  §  254. 
Barling   v.    Bank   of  British    North 

America,  50  Fed.  260,  §  198. 
Barnard  v.  Roane  Iron  Co.,  85  Tenn. 

139,  §  339. 


TABLE   OF  CASES   CITED 


XXIX 


Barney   v.    Baltimore,    6   Wall.    (73 

U.  S.)  280,  §  166. 
Barney  v.   City  of  New  York,    193 

N.  Y.  430,  §  123. 
Barney  v.   City  of  New  York,    190 

U.  S.  430,  §  153. 
Barney  v.  Surety  Co.,  131  Mich.  192, 

§413. 
Barr   v.    New   York,    Lake    Erie    & 

Western  R.  R.  Co.,  125  N.  Y.  263, 

§271. 
Barrett  v.  Minneapolis,  St.  Paul  & 

Sault  Ste.  Marie  Ry.  Co.,  106  Minn. 

51,  §317. 
Barrick  v.  Gifford,  47  Ohio  St.  ISO, 

§308. 
Barron  v.  Bumside,  121  U.  S.  186, 

§198. 
Barrow   v.    Hill    (Todd's   Case),    13 

How.  (54  U.  S.)  52,  §  137. 
Barrow  Steamship  Co.  v.  Kane,  170 

U.  S.  100,  §  181. 
Bartol  V.  Walton  &  W.  Co.   (U.  S. 

C.  C),  92  Fed.  13,  §  339. 
•Barton  Lumber  Co.  v.  Enwright,  131 

Ga.  329,  §  260. 
Barwick  v.  English  Joint  Stock  Bank, 

L.  R.  2  Ex.  259,  §  336. 
Bassick  Mining  Co.  v.  Schoolfield,  10 

Colo.  46,  §§81,88. 
Bastian    v.     Modern    Woodmen    of 

America,  166  111.  595,  §  249. 
Bates  V.  Great  Western  Teleg.  Co., 

134  111.  536,  §  288. 
Bates  &  Guild  v.  Payne,  194  U.  S. 

106,  §  129. 
Baumstein  v.    New  York  City  Ry. 

Co.,  107  N.  Y.  Supp.  23,  §  89. 
Bayard    v.    United    States    ex    rel. 

White,  127  U.  S.  246,  §  348. 
Bay  State  Dredging  Co.   v.   United 

States,  206  U.  S.  246,  §  27. 
Beach  v.  Fulton  Bank,  7  Cow.   (N. 

Y.)  485,  §  340. 
Beals    V.     Amador    County    Super- 
visors, 35  Cal.  624,   §  3. 
Becker  v.   Marble  Creek  Irrig.  Co., 

15  Utah,  225,  §  402. 


Beechley  v.  Mulville,  102  Iowa,  602, 

§448. 
Beekman    v.    Hudson    River    West 

Shore  Rd.  Co.,  35  Fed.  3,  §§  415, 

416. 
Beene  v.  Cahaba  &  Macon  R.  Co.,  3 

Ala.  660,  §  321. 
Beer  Co.  v.  Massachusetts,  97  U.  S. 

25,  §  7. 
Beers  v.  Dallas,  16  Oreg.  334,  §  223. 
Beeson  v.  Chicago  (U.  S.  C.  C),  7 

Fed.  880,  §  242. 
Behre  v.  National  Cash  Register  Co., 

100  Ga.  213,  §  335. 
Bell    V.    Bank    of    California    (Cal., 

1908),  94  Pac.  889,  §§  313,  341. 
Bell  V.  Farwell,  176  111.  489,  §§  284, 

286. 
Bell  V.  Pennsylvania,  S.  &  N.  E.  R. 

Co.,  10  N.  J.  L.  336,  §  247. 
Bellevue  Water  Co.   v.  Stockshager 

(Idaho),  43  Pac.  568,  §  397. 
Bell's  Gap  Ry.  Co.  v.  Pennsylvania, 

134  U.  S.  232,  §  13. 
Belt  Railway  Co.  v.  Banicki,  102  111. 

App.  642,  §  317. 
Benedict  v.  Guardian  Trust  Co.,  86 

N.  Y.  Supp.  376,  §  339. 
Benesh  v.  Mill  Owners'  Mut.  F.  Ins. 

Co.,  103  Iowa,  465,  §§  255,  404. 
Bennett  v.  Pierce,   50  W.  Va.  604, 

§167. 
Benson    Mining    &    S.    Co.    v.    Alta 

Mining  &  S.  Co.,   145  U.  S.  428, 

§240. 
Bent  V.  Underdown,   156  Ind.  516, 

§  280. 
Benton  v.  James  Hill  Mfg.  Co.,  26 

R.  I.  192,  §  317. 
Berea  College  v.  Kentucky,  211  U.  S. 

45,  §§  199,  456. 
Bergeron    v.    Hobbs,    96    Wis.    641, 

§282. 
Bernheimer  v.  Converse,  206  U.  S. 

516,  §§  282,  284. 
Berry  v.  Rood,  168  Mo.  316,  §  295. 
Berwind  v.  Canadian  Pac.  Ry.  Co. 

(U.  S.  C.  C),  98  Fed.  158,  §  310. 


XXX 


TABLE   OF   CASES   CITED 


Bessemer     Land     &     Imp.     Co.     v. 

Jenkins,  111  Ala.  135,  §  330. 
Besson    v.    Crapo,    150    Mich.    655, 

§249. 
Best  V.  Seaboard  Air  Line  Ry.  Co., 

72  S.  C.  479,  §  13. 
Bethlehem  Borough  v.  Perseverance 

Fire  Co.,  81  Pa.  St.  445,  §  321. 
Bibb  V.  Hall,  101  Ala.  79,  §  246. 
Bickley  v.  Schlag,  46  N.  J.  Eq.  533, 

§§  293,  299. 
Bicknell  v.  Altman  (Kan.,  1909),  105 

Pac.  694,  §§281,  282. 
Bicknell  v.  Comstock,  113  U.  S.  149, 

§  130. 
Bigelow    V.    Old    Dominion    Copper 

Mining  &  Smelting  Co.  (N.  J.  Ch.), 

71  Atl.  153,  §  10. 
Big  Six  Development  Co.  v.  Mitchell, 

138  P'ed.  279,  §  192. 
Binghamton  Trust  Co.  v.  Auten,  68 

Ark.  299,  §  339. 
Bitterman  v.  Louisville  &  Nashville 

Ry.  Co.,  207  U.  S.  205,  §§  406,  410, 

426. 
Black   V.    Brooklyn    H.   T.   Co.,    53 

N.  Y.  Supp.  312,  §  242. 
Black  V.  Caldwell,  83  Fed.  880,  §  20. 
Black  V.  Huggins,  2  Tenn.  Ch.  780, 

§  229. 
Blackwall,  The,  10  Wall.  (77  U.  S.)  1, 

§230. 
Blair    v.    Chicago,    201    U.    S.    400, 

§§  167,  192,   194. 
Blake  v.   McClung,    172  U.  S.   239, 

§174. 
Blake  v.  Portsmouth  &  Concord  Rd., 

39  N.  H.  435,  §  278. 
Blanchard   v.   Page,   74   Mass.    281, 

§243. 
Bleakney  v.  Farmers'  &  Mechanics' 

Bank,  17  S.  &  R.  (Pa.)  64,  §  239. 
Bleidorn  v.  Pilot  Mountain  Coal  &  M. 

Co.,  89  Tenn.  166,  §  315. 
Blodgett   V.    Lanyon   Zinc  Co.,    120 

Fed.  893,  §  236. 
Boardman  v.  Marshalltown  Grocery 

Co.,  105  Iowa,  445,  §  376. 


Board   of   Commissioners   v.    Aspin- 

wall,  24  How.  376,  §  348. 
Board    of    Commissioners    of    Lake 

County  v.  Schradshey,  97  Fed.  1, 

§195. 
Board    of    Directors    for    Leveeing 

Wabash  River  v.  Houston,  71  111. 

318,  §  256. 
Board    of   Directors   of   St.    Francis 

Levee  Dist.  v.  Bodkin  (Tenn.),  69 

S.  W.  270,  §  256. 
Board  of  Education  v.  Berry,  62  W. 

Va.  433,  §  249. 
Board  of  Home  Missions  of  Presby. 

Church  of  U.  S.  v.  Maughan  (Utah), 

101  Pac.  581,  §  397. 
Board  of  Levee  Inspectors  of  Chicot 

County  V.  Crittenden,  94  Fed.  613, 

§  256. 
Board  of  Liquidation  v.  McComb,  92 

U.  S.  531,  §  155. 
Board  of  Trade  v.  Christie  Grain  & 

Stock  Co.,  198  U.  S.  236,  §  421. 
Boatmen's    Bank    v.    Fritzlein,    135 

Fed.  653,  §  220. 
Boatmen's  Bank  v.  Gillespie,  209  Mo. 

217,  §  247. 
Boggs  V.  Railway  Co.,  54  Iowa,  435, 

§349. 
Boise  Artesian  Water  Co.   v.   Boise 

City,  213  U.  S.  276,  §  164. 
Bollin  V.   Nebraska,    176   U.  S.   83, 

§  158. 
Booker    v.    Grand    Rapids    Medical 

College,  156  Mich.  95,  §  355. 
Boom  County  v.  Patterson,  98  U.  S. 

403,  §  127. 
Booth  V.  Illinois,  184  U.  S.  425,  §  12. 
Booth    V.    Town    of    Woodbury,    32 

Conn.  118,  §  3. 
Borden  v.  Atlantic  Highlands,  R.  B. 

&  L.  B.  E.  R.  Co.  (N.  J.  Ch.),  33 

Atl.  276,  §  242. 
Borland  v.  Haven  (U.  S.  C.  C),  37 

Fed.  394,  §  278. 
Borough.     See  name  of. 
Bosley  v.  National  Machine  Co.,  123 

N.  Y.  St.  Rep.  277,  §  436. 


TABLE    OF   CASES   CITED 


XXXI 


Boston  &  Montana  Consol.  Copper  & 

Silver   Min.    Co.    v.    Montana   Ore 

Purchasing    Co.,    ISS    U.    S.    032, 

§§  207,  404. 
Boston  Blower  Co.  v.  Carman  Lum- 
ber Co.,  94  Va.  94,  §  403. 
Boston  C.  &  M.  R.  Co.  v.  Boston  & 

L.  II.  Co.,  65  N.  H.  393,  §  103. 
Bostwick  V.  Young,  103  N.  Y.  tiupp. 

607,  §  293. 
Bourdette,    State    ex    rel.,    v.    New 

Orleans  Gaslight  Co.,  49  La.  Ann. 

1556,  §  362. 
Bowen  v.  Illinois  Cent,.  R.  Co.  130 

Fed.  300,  §  317. 
Bowman  v.  Chicago  &  N.   W.   Ry. 

Co.,   125  U.  S.  405,  §§  11,  44,  46, 

47,  51,  53,  58. 
Boyce,  Ex  parte,  27  Nev.  299,  §  3. 
Boyd  V.  American  Carbon  Black  Co., 

182  Pa.  St.  206,  §  163. 
Boyd  V.  Sims,  87  Tex.  771,  §  302. 
Brabham  v.  Phoenix  Ins.  Co.,  41  W. 

Va.  139,  §  181. 
Bradley  v.  Michael,  1  Ind.  551,  §  341. 
Bradley   v.    Richardson,    2    Blatchf. 

(U.  S.  C.  C.)  343,  §  227. 
Branch  v.  Charleston,  92  U.  S.  677, 

§180. 
Brass  v.  Stoeser,  153  U.  S.  391,  §  57. 
Breene  v.  Merchants'  &  Mechanics' 

Bk.,  11  Colo.  97,  §§  227,  239. 
Breimeyer  v.  Star  Bottling  Co.,  130 

Mo.  App.  84,  §  410. 
Brennan  v.  City  of  Weatherford,  53 

Tex.  331,  §  247. 
Brennan  v.  Titusville,  153  U.  S.  289, 

§§  8,  58. 
Brewster  v.  Hatch,  122  N.  Y.  349, 

§259. 
Bridge  Co.  v.  United  States,  105  U.  S. 

470,  §  56. 
Bridges  v.  Shallcross,  0  W.  Va.  502, 

§3. 
Briggs  V    Nantucket  Bank,  5  Mass. 

94,  §91. 
Brimmer  v.  Rebman,  138  U.  S.  78, 

§59. 


Brinckenhoff  v.  Bostick,  88  N.  Y.  52, 

§303 
Bristol  Bank  &  T.  Co.  v.  Jonesboro 

B.  &  T.  Co.,  101  Tenn.  545,  §  339. 
Broadfoot  v.  Fayetteville,  121  N.  C. 

422,  §  13. 
Brokaw  v.   New  Jersey  R.  Co.,   32 

N.  J.  L.  328,  §§  317,  328. 
Bronson  v    La  Crosse  &  M.  Rd.  Co., 

2  Wall.  (09  U.  S.)  283,  §  275. 
Brooklyn  City  Rd.  Co.  v.  New  York, 

199U.  S.  48,  §§  23,  79. 
Brooklyn  Heights  Rd.  Co.  v.  City  of 

Brooklyn,  152  N.  Y.  244,  §  223. 
Broome  v.  New  York  &  New  Jersey 

Telep.  Co.,  42  N.  J.  Eq.  141,  §  427. 
Brown  v.  Atlanta  Ry.  &  Power  Co., 

113  Ga.  402,   §§  240,   247. 
Brown  v.  Boston  Ice  Co.,  178  Mass. 

108,  §317. 
Brown  v.  Brink,  57  Neb.  000,  §  285. 
Brown  v.  Epps,  91  Va.  726,  §  3. 
Brown  v.  Great  Western  Ry.  Co.,  3 

Ry.  &  Can.  Cas.  523,  §  113. 
Brown  v.  Guarantee  Trust  &  S.  D. 

Co.,  128U.  vS.  403,  §  229. 
Brown  v.  Hitchcock,  173  U.  S.  473, 

§130. 
Brown  v.   Houston,   114   U.   S.   622, 

§§  44,  58,  03. 
Brown  v.  Pacific  Mail  Steamship  Co., 

5    Blatchf.    (U.    S.    C.    C.)     525, 

§402. 
Brown  v.  South  Kennebec   Agricul- 
tural Soc,  47  Me.  275,  §  332. 
Brown  v.  St.  Louis  &  San  Francisco 

Ry.  Co.,  135  Mo.  App.  024,  §  327. 
Brown    v.    State    of    Maryland,    12 

Wheat.  (25  U.  S.),  419,  §  09. 
Brundred  v.  Rice,  49  Ohio  St.  040, 

§  225. 
Brunswick  Terminal  Co.  v.  National 

Bank,  99  Fed.  039,  §  278. 
Budd  V.  New  York,  143  U.  S.  517, 

§57. 
Buffalo  Frontier  Terminal  Ry.  Co., 

Matter    of,    131    App.    Div.   503, 

§142. 


XXXll 


TABLE    OF   CASES   CITED 


Buffalo  Loan,  Trust  &  Safe  Deposit 

Co.  V.  Medina  Gas  &  Elec.  Light 

Co.,  42  N.  Y.  Supp.  781,  §  224. 
Buffalo  Lubricating  Oil.  Co.  v.  Stand- 
ard Oil  Co.,  42  Hun  (49  N.  Y.  Sup. 

Ct.),  153,  §  335. 
Buffalo,  Matter  of  City  of,  139  N.  Y. 

422,  §  89. 
Buffalo  Zinc  &  Copper  Co.  v.  Crump, 

70  Ark.  525,  §  236. 
Buffington  v.  Bardon,  SO  Wis.  635, 

§  259. 
Bullitt,  Sheriff,  v.  Sturgeon,  32  Ky. 

L.  Rep.  215,  §  3. 
Burbank  v.  Dennis,  101  Cal.  90,  §  259. 
Burke  v.  City  of  Water  Valley,  87 

Miss.  732,  §  373. 
Burke    v.    State    of    New   York,    64 

Misc.  (N.  Y.)  558,  §  171. 
Burlington  &  Colorado  Ry.   Co.   v. 

People,  20  Colo.  App.  181,  §  368. 
Burlington    &    Quincy    Rd.    Co.    v. 

Spirk,  51  Neb.  167,  §  319. 
Burlington,  Cedar  Rapids  &  Northern 

Ry.  Co.  V.  Dey,  82  Iowa,  312,  §  14. 
Burns  v.  Grand  Rapids  &  Indiana 

Rd.  Co.,  113  Ind.  169,  §  188. 
Burrows   v.    Niblack,    84   Fed.    HI, 

§323. 
Busch  V.  Interborough  Rapid  Transit 

Co.,  96  N.  Y.  Supp.  747,  §  319. 
Bushnell  v.  Beloit,  10  Wis.  195,  §  3. 
Butchers'  &  Drovers'  &  Stock  Yard 

Co.   V.   Louisiana  &  Nashville  R. 

Co.,  67  Fed.  35,  §  173. 
Butchers'  Union  Co.  v.  Crescent  City 

Co.,  Ill  U.  S.  7,  §  432. 
Butler   V.    Boston   &   S.    Steamship 

Co.,  130  U.  S.  527,  §  198. 
Butterfield  v.  Stranahan,  192  U.  S. 

470,  §§  44,  92. 
Butts  V.  Simpsonville  &  B.  C.  Turn- 
pike Co.,  10  Ky.  L.  Rep.  669,  §  303. 
Byers  v.   McAuley,   149  U.  S.    103, 

§239. 
Byers  v.  Rollins,  13  Colo.  22,  §  263. 
Byronville  Creamery  Assoc,  v.  Ivors, 

93  Minn.  8,  §  247. 


Cable  v.  United  States  Life  Ins.  Co., 

191  U.  S.  288,  §§  20,  198. 
Cahall    v.    Citizens'    Mutual    Bldg. 

Assn.,  61  Ala.  232,   §  246. 
Cain  v.  Smith,  117  Ga.  902,  §  3. 
Caldwell  (State  ex  rel.  Caldwell)  v. 

Wilson,    121    N.    C.    425,    §§  109, 

112,   140. 
Caledonia  Gold  Min.  Co.  v.  Noonan, 

3  Dak.  189,  §  246. 
California  v.  Central  Pacific  Rd.  Co., 

127  U.  S.  1,  §  75. 
California    Bank   v.    Kentucky,    167 

U.  S.  362,  §§  208,  247. 
California     Cured     Fruit     Assn.     v. 

Stellings,  141  Cal.  713,  §  247. 
California  Gas  &  Oil  Co.  v.  Miller,  96 

Fed.  12,  §  209. 
California  Savings  &   Loan  Soc.   v. 

Harris,  111  Cal.  133,  §  236. 
California  State  Teleg.   Co.   v.   Alta 

Teleg.  Co.,  22  Cal.  398,  §  249. 
Calor  Oil  &  Gas  Co.  v.  Franzell,  33 

Ky.  1,  §  247. 
Calumet  Paper  Co.  v.  Sotts  Invest- 
ment Co.,  96  Iowa,  147,  §  255. 
Camanche,  The,  8  Wall.   (75  U.  S.) 

448,  §  230. 
Camden  v.   Stuart,    144   U.   S.    104, 

§§  279,  289,  291,  292. 
Camden  Land  Co.  v.  Lewis,  101  Md. 

78,  §  259. 
Cameron  v.  Chicago,  Milwaukee  &  St. 

Paul  Ry.  Co.,  63  Minn.  384,  §  14. 
Campagnie  Frangaise,  De  Navigation 

A.  Vapeur  v.  Board  of  Health,  186 

U.  S.  380,  §  58. 
Campbell  v.  Missouri  Pacific  Ry.  Co., 

121  Mo.  310,  §  14. 
Campbell    v.    Perth    Amboy    Ship- 
Building    &    Engineering   Co.,    70 

N.  J.  Eq.  40,  §§  247,  248. 
Campbell    v.    Pittsburg    &    W.    Rd. 

Co.,  137  Pa.  St.  274,  §  254. 
Canastota   Knife  Co.   v.    Newington 

Tramway  Co.,  69  Conn.  146,  §  242. 


TABLE   OF  CASES   CITED 


xxxm 


Canton    Cotton    Warehouse    Co.    v. 

Pool,  78  Miss.   147,  §  317. 
Cape    Sable's    Company's    Case,    3 

Bland  (Md.),  606,  §  321. 
Capital  Lumbering  Co.  v.  Learned, 

36  Oreg.  544,  §  227. 
Capital   Printing  Co.   v.   Hoey,    124 

N.  C.  767,  §  355. 
Carbondale  Investment  Co.  v.  Bur- 
dick,  67  Kan.  329,  §§  313,  336. 
Card  V.  Moore,  74  N.  Y.  Supp.  18, 

§§  246,  247. 
Card  well    v.    American    Bridge   Co., 

113  U.  S.  205,  §56. 
Cardwell  v.  Kelley,  95  Pa.  St.  570, 

§§  283,  289. 
Carmel    Natural    Gas    &    I.    Co,    v. 

Small,  150  Ind.  427,  §  383. 
Carmody   v.    Powers,    60   Mich.    26, 

§259. 
Carroll  v.   Greenwich  Ins.  Co.,    199 

U.  S.  401,  §§  11,  20,  39. 
Carson  v.  Hyatt,  118  U.  S.  287,  §  220. 
Carson  v.   PhcEnix  Ins.  Co.,  41   W. 

Va.  136,  §  181. 
Carson-Rand  Co.  v.  Stern,  129  Mo. 

381,  §  236. 
Carter  v.  Howe  Machine  Co.,  51  Md. 

290,  §  336. 
Cary  v.  Curtis,  3  How.  (44  U.  S.)  236, 

§4. 
Cary      Lombard     Lumber     Co.     v. 

Thomas,  92  Tenn.  57,  §  236. 
Castleman    v.    Templeman,    87    Md. 

546,  §  278. 
Gates  V.  Producers'  C,  Oil  Co.,  96  Fed. 

7,  §208. 
Catholic    Bishop    of    Nesqually    v. 

Gibbon,  158  U.  S.  155,  §  129. 
Central  Agric.  &  M.  Assoc,  v.  Ala- 
bama Gold  Life  Ins.  Co.,  70  Ala. 

120,  §  246. 
Central     Electric     Co.     v.     Sprague 

Electric  Co.  (U.  S.  C.  C.  A.),  120 

Fed.  925,  §  255. 
Central  Iron  Works  v.  Pennsylvania 

Rd.  Co.,  2  Dauph.  Co.  Rep.  308, 

§402. 


Central   National   Bank  v.   Stevens, 

169  U.  S.  432,  §  208. 
Central  of  Georgia  Ily.  Co.  v.  Brown, 

113  Ga.  414,  §317. 
Central  of  Georgia  Ry.  Co.  v.  Free- 
man,  140  Ala.  581,   §  328. 
Central  Ohio  Natural  Gas  &  F.  Co.  v. 

Capital  City  Dairy  Co.,  60  Ohio  St. 

96,  §  223. 
Central  Pacific  Rd.  Co.  v.  California, 

162U.  S.  91,  §§70,75. 
Central    Pacific    Rd.    Co.    v.    Placer 

County,  43  Cal.  365,  §  81. 
Central    Railroad    &    Bkg.    Co.    v. 

Georgia,  92  U.  S.  665,  §§  79,  180. 
Central  Transportation  Co.  v.  Pull- 
man's Car  Co.,  139  U.  S.  24,  §  162. 
Central  Trust  Co.  v.  East  Tennessee 

Land  Co.  (U.  S.  C.  C),  116  Fed. 

743,  §  259. 
Central  Trust  Co.  v.  Grantham,  83 

Fed.  540,  §  423. 
Central  Trust  Co.  v.  McGeorgc,  151 

U.  S.  129,  §  201. 
Central  Trust  Co.  v.  Western  N.  C. 

R.  Co.,  89  Fed.  24,  §§  224,  424. 
Central  Union  Teleg.   Co.  v.  State, 

118  Ind.  194,  §§  371,  380. 
Central  Un.  Teleph.  Co.  v.  Fehring, 

146  Ind.  189,  §  442. 
Central  Union  Teleph.  Co.  v.  State, 

123  Ind.  113,  §  371. 
Chafee  v.  Postal  Teleg.-Cable  Co.,  35 

S.  C.  372,  §  201. 
Chambers  v.  Baltimore  &  Ohio  Rd. 

Co.,  207  U.  S.  142,  §§  199,  208. 
Chandler  v.  Dix,  194  U.  S.  590,  §  200. 
Chapman  v.  Barney,  129  U.  S.  677, 

§175. 
Charity  Hospital  v.  New  Orleans  Gas 

Light  Co.,  40  La.  Ann.  382,  §  254. 
Charles  River  Bridge  Co.  v.  Warren 

Bridge,  11  Pet.  4,  §  432. 
Charleston,   City  of,   v.   Branch,    15 

Wall.  (82  U.  S.)  460,  §  180. 
Charlotte,  Columbia  &  Augusta  R.  R. 

Co.  V.  Gibbes,  142  U.  S.  386,  §§21, 

23,  76. 


XXXI V  TABLE    OF   CASES   CITED 

Chattanooga  Foundry  v.  Atlanta,  203  Chicago    &    Vincennes    Rd.    Co.    v. 

U.  S.  390,  §  30.  Fosdick,  106  U.  S.  47,  §  416. 

Chatterly  Iron  Co.  v.  North  Stafford-  Chicago,   BurUngton   &   Quincy  Ry. 

shire  Ry.  Co.,  3  Ry.  &  Can.  Cas.  Co.  v.  Board  of  Commrs.,  67  Fed. 

238,   §§  111,  113,  141.  413,  §  123. 

Chcetham  v.  McCorniick,  178  Pa.  St.  Chicago,    Burlington   &   Quincy  Ry. 

186,  §  377.  Co.  V.  Cass  County,  51   Neb.  369, 

Chemical  National  Bank  v.  Hartford  §§  84,  90. 

Deposit  Co.,  161  U.  S.  1,  §  239.  Chicago,   Burlington   &   Quincy  Ry. 

Chenango  Bank  v.  Brown,  26  N.  Y.  Co.  v.  Drainage  Commrs.,  200  U.  S. 

467,  §  3.  561,  §§  7,  9,  24,  25,  56. 

Cherokee  Nation  v.  Southern  Kansas  Chicago,   Burlington   &  Quincy  Ry. 

Ry.  Co.,  135  U.  S.  641,  §  92.  Co.  v.  Iowa,  94  U.  S.  155,  §  40,  43. 

Chesapeake    &    Ohio    Canal    Co.    v.  Chicago,   Burlington   &  Quincy  Ry. 

Knapp,  34  U.  S.  541,  §  321.  Co.  v.  Nebraska,  47  Neb.  549,  §§  7, 

Chesapeake     &     Ohio    Ry.     Co.     v.  8,  10. 

Dixon,  179  U.  S.  131,  §§  206,  216,  Chicago,  Burlington   &  Quincy  Ry. 

217.  Co.   V.    Nebraska,    170   U.    S.    57, 
Chesapeake  &  Ohio  Ry.  Co.  v.  Mc-  §§  24,  93,  208. 

Cabe,  313  U.  S.  207,   §§  204,  215,  Chicago,   Burlington   &   Quincy  Ry. 

218,  219,  220.  Co.    v.    Schalkopf,    54    Neb.    448, 
Chesapeake  &  Ohio  Rd.  Co.  v.  Patton,  §  315. 

23  App.  D.  C.  113,  §  319.  Chicago,   Burlington  &  Quincy  Ry. 

Chesapeake    &    Ohio    Rd.     Co.    v.  Co.  v.  State,  47  Neb.  549,  §§7,8, 10. 

Virginia,  94  U.  S.  718,  §§  79,  180.  Chicago,   Burlington   &   Quincy  Ry. 

Chesapeake  &  Potomac  Teleph.  Co.  Co.  v.  Sykes,  96  111.  162,  §  317. 

V.   Baltimore  &  Ohio  Teleg.  Co.,  Chicago,   Burlington  &  Quincy  Ry. 

66  Md.  399,  §§371,  442.  Co.    v.    Winnett,    162    Fed.    242, 

Chesapeake  &  Potomac  Teleg.  Co.  v.  §§  106,  134,  151. 

Manning,  186  U.  S.  238,  §  150.  Chicago    Grand    Trunk   Ry.    Co.    v. 

Chestnut  Hill  &  Spring  House  Turn-  Wellman,  143  U.  S.  339,  §§  34,  147. 

pike  Co.  V.  Rutter,  4  Serg.  &  R.  Chicago  G.  W.  Rd.  Co.  v.  People,  179 

(Pa.)  6,  §§  321,  332.  III.  441,  §  381. 

Chicago   &  Atchison   Bridge  Co.   v.  Chicago,  Kalamazoo  &  Saginaw  Ry. 

Pacific  Mut.  Teleg.  Co.,  36  Kan.  Co.  v.  Lane,  150  Mich.  162,  §§  437, 

113,  §427.  438. 

Chicago    &   Calumet   T.    R.    Co.    v.  Chicago,  Kansas  &  Western  Ry.  Co. 

Whiting,  Hammond,  etc.,  Co.,  139  v.  Pontius,  157  U.  S.  209,  §  14. 

Ind.  297,  §  426.  Chicago  Life  Ins.  Co.  v.  Needles,  113 

Chicago  &  E.  I.  R.  Co.  v.  Boggs,  134  U.  S.  574,  §  6. 

111.  App.  348,  §  243.  Chicago,   M.   &  St.   Paul  R.  Co.  v. 

Chicago     &     Eastern     Rd.     Co.     v.  Minnesota,   134  U.  S.  418,   §§23, 

Chestnut   Bros.,   28  Ky.   L.   Rep.  34,  57,  115,  139,  144,  149. 

404,  §  319.  Chicago,    M.    &   St.    P.    Ry.   Co.    v. 

Chicago  &  Northwestern  Ry.  Co.  v.  Solan,  169  U.  S.  133,  §  47. 

Bayfield,  37  Mich.  205,  §  317.  Chicago,    M.    &   St.    P.    Ry.    Co.    v. 

Chicago  &   Northwestern   R.   Co.   v.  Tompkins,  176  U.  S.   167,   §§  144, 

r^-y,  35  Fed.  866,  §  150.  149,  150. 


TABLE   OP   CASES   CITED 


xxxr 


Chicago  Municipal  Gas  Light  &  Fuel 

Co.  V.  Town  of  Lake,  130  111.  42, 

§223. 
Chicago,    P.    &   St.    L.    Ry.    Co.    v. 

Vaughn,  99  111.  App.  386,  §  316. 
Chicago,  R.  &  P.  Ry.  Co.  v.  Martin, 

178  U.  S.  245,  §  214. 
Chicago  Rd.  Co.  v.  Dickson,  63  111. 

151,  §317. 
Chicago,    Rock   Island   &   Gulf   Ry. 

Co.    V.    Jones    (Tex.    Civ.    App., 

1909),  118  S.  W.  759,  §  243. 
Chicago,  Rock  Island  &  Pacific  Ry. 

Co.  V.  Kerr,  74  Neb.  1,  §  317. 
Chicago,  Rock  Island  &  P.  R.  Co.  v. 

St.   Joseph   Union  Depot  Co.,   92 

Fed.  22,  §  208. 
Chicago,  St.   Louis  &  New  Orleans 

Rd.  Co.   V.   Doyle,   60  Miss.   977, 

§188. 
Chicago,  St.  Louis  &  Pittsburg  Rd. 

Co.  V.  Graham,  3  Ind.  App.  28, 

§319. 
Chicago  Teleph.  Co.  v.  Northwestern 

Tel.  Co.,  100  111.  App.  57,  §§  242, 

251. 
Chicago  Union  Traction  Co.  v.  City 

of  Chicago,  199  111.  484,  §  93. 
Chickasaw  County  Farmers'  Mut.  F. 

Ins.  Co.  V.  Weller,  98  Iowa,  731, 

§318. 
Chilberg  v.   Siebenbaum,   41   Wash. 

663,  §  308. 
Church  V.  Foley,  10  S.  Dak.  74,  §  257. 
Chisholm   v.    Georgia,    2   Dall.    419, 

§155. 
Chivington  v.  Colorado  Springs  Co., 

9  Colo.  597,  §  315. 
ChoUar    Mining   Co.    v.    Wilson,    66 

Cal.  374,  §  87. 
Christian  v.  Atlantic  &  N.  C.  Rd. 

Co.,  133  U.  S.  233,  §  250. 
Christian    &   Craft    Grocery   Co.    v. 

Fruitdale   Lumber   Co.,    121    Ala. 

340,  §247. 
Christopher  v.  Norvell,  201  U.  S.  216, 

§§  66,  284. 
Chubb  V.  Upton,  95  U.  S.  665,  §  247. 


Church  V.  Citizens'  Street  Ry.  Co. 
(U.  S.  C.  C),  78  Fed.  526,  §  310. 

Church  of  Christ  v.  Reorganized 
Church  of  Jesus  Christ  of  L.  D.  S. 
(U.  S.  C.  C),  71  Fed.  250,  §  315. 

Cincinnati,  Hamilton  &  Dayton  Ry. 
Co.  V.  Interstate  Commerce  Com- 
mission, 206  U.  S.  142,  §§  105, 
133. 

Cincinnati,  H.  &  I.  R.  Co.  v.  Clifford, 
113  Ind.  460,  §  249. 

Cincinnati,  New  Orleans  &  Texas 
Pac.  Ry.  Co.  v.  Bohon,  200  U.  S. 
221,   §§  214,  215. 

Cincinnati,  New  Orleans  &  Texas 
Pac.  Ry.  Co.  v.  Interstate  Com- 
merce Commission,  162  U.  S.  184, 
§§  106,  115. 

Cincinnati,  New  Orleans  &  Texas 
Pac.  R.  Co.  V.  Kentucky,  115  U.  S. 
321,  §§  14,  68. 

Cincinnati,  New  Orleans  &  Texas 
Pac.  Ry.  Co.  v.  Slade,  216  U.  S. 
78,  §  209. 

Cincinnati  Street  Ry.  Co.  v.  Snell, 
193  U.  S.  30,  §  14. 

Cincinnati,  Voksblatt  Co.  v.  Hoff- 
meister,  62  Ohio  St.  189,  §  225. 

Cincinnati  W.  &  Z.  R.  Co.  v.  Super- 
visors, 1  Ohio  St.  77,  §  3. 

Citizens'  Bank  v.  Parker,  192  U.  S. 
73,  §  68. 

Citizens'  Cent.  Nat.  Bank  of  N.  Y. 
v.  Appleton,  216  U.  S.  195,  §  323. 

Citizens'  Life  Ins.  Co.  v.  Commis- 
sioner of  Ins.,  128  Mich.  85, 
§§.344,  358. 

Citizens'  Savings  &  Trust  Co.  v. 
Illinois  Cent.  Rd.  Co.,  205  U.  S. 
46,  §§  168,  201. 

Citizens'  Savings  Bank  v.  Owensboro, 
173  U.  S.  636,  §§68,  93. 

Citizens'  Street  Rd.  Co.  of  Indian- 
apolis V.  Willoeby,  134  Ind.  563, 
§§  317,  319. 

Citizens'  Street  Ry.  Co.  v.  Memphis, 
53  Fed.  715,  §  ISO. 

City.     See  name  of. 


XXXVl  TABLE   OF   CASES   CITED 

City  Council  of  Charleston  v.  Postal  Cleveland,  Cincinnati,  Chicago  &  St. 

Teleg.  Cable  Co.,  9  Ry.  &  Corp.  Louis  Ry.  Co.  v.  The  People,  212 

L.  J.  129,  §  442.  111.  (338.  §  94. 

City  Delivery  Co.  v.  Henry,  139  Ala.  Clinton   Bridge,   The,    10  Wall.    (77 

161,  §  317.  U.  S.)  454,  §  56. 

City  of  Nashville  v.   Ward,   16  Lea  Coats,  In  re,  75  N.  Y.  Supp.  730, 

(84  Tenn.),  27,   §224.  §441. 

City  St.  Improvement  Co.  v.  Regents'  Cochran  v.  Arnold,  58  Pa.  St.  399, 

University  of  California,   158  Cal.  §  246. 

776,  §  3.  Cochran  &  The  Fidelity  &  Deposit 

Clark  v.  American  Cannel  Coal  Co.,  Co.  v.  Montgomery,  199  U.  S.  260, 

165  Ind.  213,  §§  240,  247.  §§  204,  207,  219. 

Clark   V.    Barnard,    108    U.   S.   436,  Coe  v.  Errol,  116  U.  S.  517,  §  63. 

§  201.  Cohen  Brothers  v.  Missouri,  Kansas 

Clark  V.  Bever,   139  U.  S.  96,   103,  &  T.  Ry.  Co.  of  Tex.  (Tex.  Civ. 

§§  239,  292.  App.,  1906),  98  S.  W.  437,  §  339. 

Clark  V.   Dunham   Lumber  Co.,   86  Coit  v.  Gold  Amalgamated  Co.,  119 

Ala.  220,  §  339.  U.  S.  343,  §§  294,  297. 

Clark    V.    Eastern    BIdg.    &    Loan  Colchester  v.  Seaber,  3  Burr,   1866, 

Assoc,  89  Fed.  779,  §  441.  §  239. 

Clark  V.  Great  Northern  Rd.  Co.,  81  Cole  v.  Philadelphia  &  Easton  Ry. 

Fed.  282,  §  439.  Co.,  140  Fed.  944,  §  194. 

Clark  V.  Herrington,  136  U.  S.  206,  Colebrook,  In  re,  55  N.  Y.  Supp.  861, 

§  130.  §  200. 

Clark  County  Court  v.   Warner,  25  Colgate    v.    United    States    Leather 

Ky.  L.  Rep.  857,  §  399.  Co.,  73  N.  J.  Eq.  72,  §  267. 

Clarke  v.  Hill,  132  Mich.  434,  §§  354,  Collenberg,  The,  v.  Black  (66  U.  S.), 

355.  170,  §  244. 

Clarrisey  v.    Metropolitan   Fire   De-  Collier    v.    Deering    Camp    Ground 

partment,  7  Abb.  Prac.  N.  S.  (N.  Assoc,  23  Ky.  L.  Rep.  1799,  §  306. 

Y.)  352,  §  227.  Collins  v.  Citizens'  Bank  &  Trust  Co., 

Clausen    v.    Head,     110    Wis.    405,  121  Ga.  513,  §  247. 

§  247.  Colonna  Dry  Dock  Co.  v.  Colonna, 

Clearwater  v.  Meredith,  1  Wall.  (68  108  Va.  230,  §  438. 

U.  S.)  25,  §  180.  Colorado  Eastern  R.  D.  Co.  v.  Chi- 

Clements    v.    Philadelphia    Co.,    184  cago,    Burlington    &    Quincy    Ry. 

Pa.  St.  28,  §  328.  Co.  (U.  S.  C.  C.  A.),  141  Fed.  898, 

Cleveland  v.  Cleveland  City  Ry.  Co.,  §  421. 

194  U.  S.  517,  §§  146,  425.  Columbian    Athletic    Club    v.    State 

Cleveland,  Cincinnati,  Chicago  &  St.  ex    rel.    McMahan,    143    Ind.    98, 

L.  Ry.  Co.  V.  Backus,    154  U.  S.  §421. 

439,  §  94.  Columbia  Water  Power  Co.  v.  Co- 
Cleveland,  Cincinnati,  Chicago  &  St.  lumbia  Street  Ry.  L.  &  P.  Co.,  172 

Louis  Ry.  Co.  v.  Feight,  41  Ind.  U.  S.  475,  §§  158,  208. 

App.  416,  §  247.  Columbus  S.  &  H.  R.  Co.,  Appeal  of, 

Cleveland,  Cincinnati,  Chicago  &  St.  109  Fed.  177,  §  417. 

Louis  Ry.  Co.  v.  Illinois,  177  U.  S.  Columbus     Southern     Ry.     Co.     v. 

514,  §§  47,  50,  118.  Wright,  151  U.  S.  470,  §  76. 


TABLE   OF   CASES   CITED 


XXXVll 


Commanche   County   v.    Lewis,    133 

U.  S.  1<)8,  §  246. 
Commercial    &    Railroad     Bank    of 

Vicksburg  v.  Slocumh,  14  Pet.  (39 

U.  S.)  GO,  §§  ISl,  201. 
Commercial    Mut.    Accident    Co.    v. 

Davis,  213  U.  S.  245,  §§  181,  201. 
Commercial  Union  Teleg.  Co.  v.  New 

England  Teleph.  &  Teleg.  Co.,  61 

Vt.  241,  §§  371,  442. 
Commissioners.     See  name  of,  or  of 

Board,  etc. 
Commonwealth  v.  Arrison,   15  Serg. 

&  R.  (Pa.)  127,  §  391. 
Commonwealth     v.     Atlantic    Coast 

Line  Ry.  Co.,  106  Va.  61,  §  112. 
Commonwealth  v.  Baltimore  &  Ohio 

Rd.  Co.,  223  Pa.  23,  §  447. 
Commonwealth  v.  Drewry,  15  Gratt. 

(Va.)  1,  §  3. 
Commonwealth    v.     Fitchburg    Rd. 

Co.,  12  Gray  (Mass.),  ISO,  §  345. 
Commonwealth    v.    Hamilton    Mfg. 

Co.,  120  Mass.  383,  §  18. 
Commonwealth    v.    Mallett,    27    Pa. 

Super.  Ct.  41,  §  3. 
Commonwealth  v.  Massachusetts  Rd. 

Corp.,  4  Gray  (70  Mass.),  22,  §  447. 
Commonwealth  v.  McLaughlin,   120 

Pa.  St.  518,  §  356. 
Commonwealth       v.       Monongahela 

Bridge  Co.,  216  Pa.  St.  lOS,  §  224. 
Commonwealth       v.        Philadelphia 

County,  193  Pa.  St.  236,  §  247. 
Commonwealth    v.    Potter    County 

Water  Co.,  212  Pa.  St.  463,  §§  386, 

394. 
Commonwealth  v.  Proprietors  of  New 

Bedford  Bridge,  2  Gray  (68  Mass.), 

336,  §  446. 
Comm.onwealth  v.  Railroad  Co.,  187 

Mass.  436,  §  13. 
Commonwealth     v.     Dewhirst,     190 

Mass.  293,  §  457. 
Commonwealth   Title    Ins.    &   Trust 
Co.  V.  Dokko,  71  Minn.  533,  §  319. 
Conard  v.  Atlantic  Ins.  Co.,   1  Pet. 
(26  U.  S.)  386,  §  233. 


Concord  First  Nat.  Bank  v.  Hawkins, 

174  U.  S.  364,  §  247. 
Concord  Rd.  v.  Greeley,  17  N.  H.  47, 

§3. 
Conek  v.  Skeen  (Va.,  1908),  63  S.  E. 

11,  §3. 
Conemaugh  Gas  Co.  v.  Jackson  Farm 

Gas  Co^,  186  Pa.  St.  443,  §  163. 
Conley  v.   Mathieson   Alkali   Works, 

190  U.  S.  406,  §§  181,  182. 
Connecticut   Mut.    Life   Ins.   Co.    v. 

Spratley,  172  U.  S.  602,  §  181. 
Connolly  v.   Union  Sewer  Pipe  Co., 

184  U.  S.  540,  §  436. 
Consolidated  Assoc,  of  the  Planters  of 

Louisiana  v.  Claiborne,  7  La.  Ann. 

318,  §  240. 
Consolidated  Rendering  Co.  v.  Ver- 
mont, 207  U.  S.  541,  §§  4,  138. 
Consolidated  Rubber  Tire  Co.,  Matter 

of,  214  U.  S.  488,  §  400. 
Consolidated  Water  Co.  v.  San  Diego, 

84  Fed.  369,  §  208. 
Continental  Ins.  Co.  v.  New  York  & 

Harlem    Rd.    Co.,    103    App.   Div. 

282,  §  266. 
Continental  Ins.  Co.  v.  Rhodes,  119 

U.  S.  237,  §  173. 
Continental  Nat.   Bank  of  Memphis 

V.  Buford,   191  U.  S.   119,   §§  157, 

213. 
Continental  Trust  Co.  v.  Toledo,  St. 

Louis  &  K.  C.  R.  Co.  (U.  S.  C.  C), 

82  Fed.  642,  §§  246,247. 
Continental  Wall  Paper  Co.  v.  Voight 

&  Sons  Co.,  212  U.  S.  227,  §  451. 
Contracting   &    Bldg.   Co.   v.   Conti- 
nental Trust  Co.,  108  Fed.  1,  §  417. 
Converse  v.   Hood,    149   Mass.   471, 

§§  266,  268. 
Converse  v.  Mears  (U.  S.  C.  C),  162 

Fed.  767,  §  284. 
Conway  v.  Taylor,  1  Black  (66  U.  S.), 

603,  §421. 
Cook  v.  Marshall  County,  Iowa,  196 

U.S.  261,  §53. 
Cook  V.  Southern  Columbian  Climber 

Co.,  75  Miss.  121,  §  283. 


XXXV  111 


TABLE    OF   CASES    CITED 


Cooper,  In  re,  143  U.  S.  472,  §§  397, 

401. 
Cooper  V.  Adel  Security  Co.,  122  N. 

C.  463,  §  279. 
Cooper   V.    Reynolds,    10    Wall.    (77 

U.  S.)  308,  §  88. 
Cooper   Mfg.   Co.   v.    Ferguson,    113 

U.  S.  727,  §  44. 
Copley   V.    G rover   &   Baker   Co.,    2 

Woods  (U.  S.  C.  C),  494,  §  336. 
Corbin  v.  Black  Hawk  County,   105 

U.  S.  659,  §  189. 
Corbus    V.    Alaska    Treadwell    Gold 

Min.  Co.,  187  U.  S.  455,  §§  404,  409, 

411. 
Cornell  v.  Sims,  111  Ga.  828,  §§  275, 

302,  306. 
Corry  v.  Mayor  &  Council  of  Balti- 
more, 196  U.  S.  466,  §  286. 
Corry  v.  Pennsylvania  Rd.  Co.,   194 

Pa.  St.  516,  §  332. 
Cosmos    Exploration    Co.    v.    Gray 

Eagle    Oil    Co.,    190    U.    S.    301, 

§129. 
Gotten  V.  Ponder,  6  Fla.  610,  §  3. 
Gotting  V.  Kansas  City  Stock  Yards 

Co.,  183  U.  S.  79,  §§  15,  36,  150. 
Coulter  V.  Louisville  &  N.  Rd.  Co., 

196  U.  S.  599,  §  67. 
County.    See  name  of. 
County  Commissioners  of  Anne  Arun- 
del County  V.  Baltimore  Sugar  Ref . 

Co.,  99  Md.  481,  §356. 
Court  of  Honor  of  111.,  In  re,  109  Wis. 

625,  §  374. 
Covington  v.  First  Nat.  Bank  of  Cov- 
ington, 198  U.  S.  100,  §  71. 
Covington  &  Cincinnati  Bridge  Co.  v. 

Eager,  203  U.  S.  109,  §  374. 
Covington   &  Cincinnati   Bridge  Co. 

V.  Kentucky,  154  U.  S.  204,  §§  33, 

44,  56. 
Covington  &  Lexington  Turnpike  Rd. 

Co.   v.   Sandford,    164   U.   S.    578, 

§  79,  143,  144,  149. 
Covington  Drawbridge  Co.  v.  Shep- 
herd,   20    How.    (62   U.    S.)    112, 

§173. 


Cowan  &  Sons  v.  North  British  Ry. 

Co.,  11  Ry.  &  Can.  Traff.  Gas.  96, 

§  119. 
Cowley  V.  Northern  Pac.  Rd.  Co.,  159 

U.  S.  569,  §  402. 
Craft  et  al.  v.  McConoughy,  79  111. 

346,  §  432. 
Cragin  v.  Powell,  128  U.  S.  691,  §  129. 
Craig  V.  Leitensdorfcr,  123  U.  S.  189, 

§130. 
Crall  V.   Ostrander's   Case,    103   Va. 

855,  §  446. 
Grail's  Case,  103  Va.  862,  §  446. 
Crandall  v.  Nevada,  6  Wall.  (73  U. 

S.)  35  §  44. 
Crawfordsville  &  Wabash  Rd.  Co.  v. 

Wright,  5  Ind.  252,  §§  328,  330. 
Crawshay  v.  Soutter,  6  Wall.  (73  U. 

S.)  739,  §  420. 
Crefield   Mills   v.   Goddard,   69  Fed. 

141,  §  236. 
Crehore   v.    Ohio   &   Mississippi   Ry. 

Co.,  131  U.  S.  240,  §§  215,  220. 
Crete    Building    &    Loan    Assoc,    v. 

Patz  (Neb.,  1901),  95  N.  W.  793, 

§247. 
Crippen  v.  Laighton,  69  N.  H.  540, 

§§  284,  286. 
Critten  v.  Chemical  Nat.  Bank,   171 

N.  Y.  219,  §  319. 
Croker   v.   Chicago   &   North we.stern 

Co.,  36  Wis.  657,  §  317. 
Cronan  v.  District  Court,  15  Idaho, 

184,   §  397. 
Cross  V.  West  Virginia  Cent.  &  Pa. 

Ry.  Co.,  35  W.  Va.  174,  §  359. 
Grossman  v.  Kincaid,  31  Oreg.  445, 

§  336. 
Grossman  v.  Lurman,  192  U.  S.  189, 

§  58. 
Crow  V.  Florence  Ice  &  Coal  Co.,  143 

Ala.  541,  §302. 
Crow  V.  Lincoln  Trust  Co.,  144  Mo. 

562,  §  223. 
Crown  Cork  &  Seal  Co.  v.  Standard 

Brewery,  174  Fed.  252,  §  173. 
Crystal  Springs  Land  &  Water  Co.  v. 

Los  Angeles,  82  Fed.  114,  §  209. 


TABLE   OF  CASES   CITED 


XXXIX 


Crystal  Springs  Land  &  W.  Co.  v. 

Los  Angeles,  76  Fed.  148,  §  208. 
Cumberland  Teleph.  &  Teleg.  Co.  v. 

Evansville,  127  Fed.  187,  §  223. 
Cumberland  Teleph.  &  Teleg.  Co.  v. 

Morgan's  L.  &  T.  Ry.  Co.,  51  La. 

Ann.  29,  §§  355,  366. 
Cummings  v.  National  Bank,  101  U. 

S.  153,  §  71. 
Cummings  v.  Winn,  89  Mo.  51,  §  265. 
Cunningham  v.  City  of  Cleveland,  98 

Fed.  657,  §  247. 
Cunningham  v.  Glauber,  115  N.  Y. 

Supp.  259,  §  240. 
Cunningham  v.  Macon  &  Brunswick 

Rd.  Co.,  109  U.  S.  446,  §  250. 
Curtis  V.  Leavett,  15  N.  Y.  9,  §  223. 
Curtiss  V.  Strawbridge,  3  Cranch  (7 

U.  S.),  267,  §  181. 
Curtner  v.  United  States,  149  U.  S. 

662,  §  130. 

D 

Dahlgreen,  In  re,  30  App.  D.  C.  588, 

§  397. 
Dahlgreen  v.  Superior  Court,  8  Cal. 

App.  022,  §  81. 
Dancel  v.  Goodyear  Shoe  Mfg.  Co. 

(U.  S.  C.  C),  137  Fed.  157,  §  255. 
Danforth  v.  Scholarie  Turnpike  Co., 

12  Johns.  (N.  Y.)  227,  §  321. 
Daniel  v.   Atlantic  Coast  Line  Rd. 

Co.,  136  N.  C.  517,  §  317. 
Daniels  v.   Commonwealth   Ave.  St. 

Ry.  Co.,  175  Ma.ss.  518,  §  434. 
Danville  Water  Co.  v.  Danville  City, 

180  U.  S.  619,  §  95. 
Darnell  &  Son  Co.  v.  Memphis,  208 

U.  S.  113,  §  63. 
Darrah  v.  Boyce,  02  Mich.  480,  §  163. 
Dartmouth  College  v.  Woodward,  4 

Wheat.  (17  U.  S.)  518,  §223. 
Davenport   v.    Dows,    18   Wall.    (85 

U.  S.)  626,  §§  229,  274. 
Davenport  v.  Piano  Imp.  Co.,  79  111. 

App.  161,  §  402. 
Davidsburgh  v.   Knickorhockor  Life 

Ins.  Co.,  90  N.  V.  526,  §  200. 


Davidson  Marble  Co.  v.  Gibson,  213 

U.  S.  10,  §  201. 
Davies,    Matter   of,    168    N.    Y.    89, 

§  454. 
Davis   V.    Arkansas   F.   Ins.   Co.,   63 

Ark.  412,  §  163. 
Davis  V.  Electric  Rep.  Co.  (Pa.),  19 

Wkly.  N.  C.  567,  §  372. 
Davis  V.  Ejmira  Savings  Bank,  161 

U.  S.  275,  §§  65,  66. 
Davis  V.   Farnum  Mfg.   Co.   v.   Los 

Angeles,  189  U.  S.  207,  §  430. 
Davis  V.  Gemmel,  70  Md.  356,  §  303. 
Davis  V.  Gray,  16  Wall.  (83  U.  S.) 

203,  §§155,  198,  250. 
Davis  V.  Ladoga  Creamery  Co.,  128 

Ind.  222,  §  285. 
Davis  V.  New  York  Concert  Co.,  41 

Hun(N.  Y.),492,  §416. 
Davis  V.  Ravenna  Creamery  Co.,  48 

Neb.  471,  §  259. 
Davis  V.  Stevens  (U.  S.  D.  C),  104 

Fed.  235,  §  247. 
Dawe  V.  Morris,  149  Mass.  188,  §  339. 
Dawson,  City  of,  v.  Columbia  Ave. 

Sav.  Fund,  S.  D.,  T.  &  T.  Co.,  197 

U.  S.  178,  §  196. 
Day  V.  Worce.ster,  N.  &  R.  R.  Co., 

151  Mass.  302,  §  254. 
Dayton  v.  City  Ry.  Co.,  26  Ohio  Cir. 

Ct.  Rep.  736,  §  426. 
Dayton  Coal  &  Iron  Co.  v.  Barton, 

183  U.  S.  23,  §  27. 
Debs,  In  re,  158  U.  S.  564,  §  137. 
Decatur  Mineral  Land  Co.  v.  Palm, 

113  Ala.  531,  §  305. 
De  Cambra  v.  Rogers,  189  U.  S.  119, 

§129. 
De  Castro  v.  Compagnie  Fran^aise  du 

T^l^graphe,   76  Fed.  425,   §  181. 
Deere  v.  Wyland,  69  Kan.  255,  §  236. 
Defiance  Water  Co.  v.  Defiance,  191 

U.S.  184,  §  157. 
Deitch  v.  Staub,  115  Fed.  309,  §  247. 
Deitz  V.  Stephenson,   51   Oreg.   596, 

§§437,439. 
De  Lacey  v.  Northern  Pac.  R.  Co. 

(U.  S.  C.  C.  A.),  72  Fed.  726,  §  315. 


xl 


TABLE    OF   CASES   CITED 


Delameter  v.  South  Dakota,  205  U. 

S.  03,  §§  52,53,54. 
De  La  Vergne  Refrigerating  M.  Co.  v. 

German  Sav.  Inst.,  175  U.  S.  40, 

§  247. 
Delaware  &  A.  Teleg.  &  Teleph.  Co. 

V.    State    Postal    Tel.    Cable    Co., 

3  U.  S.  App.  30,  §  442. 
Delaware  &   Huilson  Co.  v.   Albany 

&  Susquehanna  Ry.  Co.,  213  U.  S. 

435,  §  310. 
Delaware  Division  Canal  Co.  v.  Com- 
monwealth, 60  Pa.  St.  367,  §  447. 
Delaware    Railroad    Tax,    18    Wall. 

(85  U.  S.)  206,  §§  67,  79,  180. 
Delmar  Jockey  Club  v.  Missouri,  210 

U.  S.  324,  §  386. 
De  Loach  Mill  Mfg.  Co.  v.  Standard 

Saw  Mill  Co.,  125  Ga.  377,  §  319. 
Deming  v.  Beatty  Oil  Co.,  72  Kan. 

614,  §  263. 
Deming  v.   Darling,   148  Mass.   504, 

§339. 
Denman   v.   Chicago,    Burlington   & 

Quincy    Rd.    Co.,    52    Neb.     140, 

§  319. 
Dennis  v.  Northern  Pac.  Ry.  Co.,  20 

Wash.  320,  §  412. 
Denton  v.  International  Co.,  36  Fed. 

1,  §  181. 
Denver  v.  United  States  Tel.  Co.,  10 

Ohio  S.  &  C.  P.  Dec.  273,  §  242. 
Denver  &   Rio   Grande  Ry.   Co.   v. 

United  States,  124  Fed.  156,  §  421. 
Denver  &  S.  Ry.  Co.  v.  Denver  City 

Ry.  Co.,  2  Colo.  673,  §  383. 
Deseret    Nat.    Bank    v.    Burton,    17 

Utah,  43,  §  412. 
Des  Moines,  City  of,  v.  Des  Moines 

City    Ry.     Co.,    214     U.    S.    179, 

§126. 
Dessert  Lumber  Co.  v.  Wadleigh,  103 

Wis.  318,  §§  313,  330. 
Detroit  v.  Dean,  106  U.  S.  537,  §  305. 
Detroit  Driving  Club  v.   Fitzgerald, 

109  Mich.  570,  §  223. 
Detroit,  Fort  Wayne  &  Belle  Isle  Ry. 

Co.  V.  Osborn,  189  U.  S.  383,  §  23. 


Diamond  Match  Co.  v.  Ontonagon, 

188  U.  S.  82,  §§  59,  63. 
Dick   v.    Forraker,    155    U.   S.    404, 

§168. 
Dickerraan  v.   Northern  Trust  Co., 

176  U.S.  181,  §§259,414. 
Didcot,    Newbury    &    Southampton 

Ry.  Co.  v.  Great  Western  Ry.  Co., 

10  Ry.  &  Can.  Traif.  Cas.  1,  §  113. 
Dietz  V.  Cincinnati  &  N.  Y.  Traction 

Co.  (C.  P.),  6  Ohio  Dec.  513,  §  242. 
Dilber  v.  Hawley,  81  Fed.  651,  §  129. 
Dillon  V.  Kansas  City  S.  B.  Rd.  Co., 

43  Fed.  109,  §423. 
Dimpfell  v.  Ohio  &  Mississippi  Ry. 

Co.,  IIOU.  S.  209,  §266. 
Dinsmore  v.  Southern  Express  Co.  & 

Georgia  Rd.   Commission,   183   U. 

S.  115,  §  149. 
Distare  v.  Best,  88  N.  Y.  527,  §  223. 
District  of  Columbia  v.  Brooke,  214 

U.S.  138,  §§7,  10,  14,44. 
District  of  Columbia  v.   Eslin,    183 

U.  S.  62,  §  137. 
Dobbins  v.  Los  Angeles,  195  U.  S. 

223,  §  430. 
Doctor  V.  Harrington,  196  U.  S.  579, 

§224. 
Dodd  V.  Louisville  Bridge  Co.,   130 

Fed.  ISO,  §§  174,  178. 
Dodge  V.  Woolsey,  18  How.  (59  U.  S.) 

331,  §  424. 
Dollar     Savings     Bank     v.     United 

States,    19  Wall.   (86  U.  S.)   227, 

§  252. 
Donnelly     v.     Baltimore     Trust     & 

Guarantee  Co.,  102  Md.  1,  §  339. 
Donnelly  v.  Sampson,  135  Wis.  368, 

§301. 
Donohue  v.  El  Paso  &  Southwestern 

Ry.  Co.,  214  U.  S.  499,  §  215. 
Donovan  v.   Pennsylvania  Co.,    199 

U.  S.  279,  §  410. 
Donovan  v.  Wells,  Fargo  &  Co.,  169 

Fed.  363,  §  220. 
Dorsey,   In   re,    7  Port.    (Ala.)  293, 

§3. 
Doty  V.  Patterson,  155  Ind.  60,  §  246. 


TABLE   OF  CASES   CITED 


xli 


Douglas  County  v.  Belles,  94  U.  S. 

104,  §  248. 
Dow  V.  Beidelman,   125  U.  S.  6S0, 

§§  14,  23,  34. 
Dowell  V.  Applegate,  152  U.  S.  327, 

§  219. 
Dowling  V.  Lancashire  Ins.  Co.,   92 

Wis.  63,  §  121. 
Downes  v.  Bidwell,   182  U.  S.  244, 

§  137. 
Downing  v.  Indiana  State  Board  of 

Agriculture,  129  Ind.  443,  §  241. 
Dows  V.   National  Exchange  Bank, 

91  U.  S.  618,  §  340. 
Doyle   V.    Continental    Ins.    Co.,    94 

U.S.  535,  §§  16,  19,  198. 
Dubs  V.  Egli,  167  111.  514,  §  247. 
Dugger  V.   Insurance  Co.,   95  Tenn. 

245,  §  13. 
Duggins    V.    Watson,    15    Ark.    118, 

§317. 
Duke  V.  Taylor,  37  Fla.  46,  §  246. 
Dumphy     v.     Traveler     Newspaper 

Assoc,   146  Mass.  495,   §  302. 
Dunbar  v.  American  Teleph.  &  Teleg. 

Co.,  238  111.  456,  §  436. 
Duncan  v.  Atchison,  Topeka  &  Santa 

Fe  Rd.  Co.,  72  Fed.  808,  §  198. 
Duncan  v.  Missouri,   152  U.  S.  377, 

§  13. 
Duncomb  v.  New  York,  Housatonic 

&  Northern  Rd.  Co.,  84  N.  Y.  190, 

§293. 
Dunlap    V.    Ranch,    24    Wash.    620, 

§297. 
Dunn  V.  Rector,  etc.,  of  St.  Andrews 

Church,    14    Johns.    (N.    Y.)    US, 

§321. 
Dunn,    Matter    of,    212    U.    S.    374, 

§§  207,211,219. 
Dunningtons  v.  Pres.  &  Dir.  N.  W. 

Turnpike  Rd.,  6  Grat.  (Va.),  160, 

§321. 
Dunlop    V.    Mercer,    156    Fed.    545, 

§162. 
Durgin  v.  Smith,  133  Mich.  331,  §  259. 
Duryee     v.     United     States     Credit 

System  Co.,  55  N.  J.  Eq.  311,  §  348. 


Dusenbury  v.  Looker,  110  Mich.  58, 

§378. 
Dyer  v.  Drucker,  95  N.  Y.  Supp.  749, 

§  287. 
Dykman  v.  Keeney,  154  N.  Y.  483, 

§410. 

E 

Eagle  Ins.  Co.  v.  Ohio,  153  U.  S.  446, 

§§  16,  78. 
Eagles,  In  re,  146  U.  S.  357,  §  400. 
Eames    v.    Brunswick    Construction 

Co.,  94  N.  Y.  Supp.  24,  §  339. 
Eastern  Building  &  L.  Assn.  v.  Bed- 
ford, 88  Fed.  7,  §  198. 
Eastern     Dredging    Co.     v.     United 

States,  206  U.  S.  246,  §  27. 
Eastern    Trust    &    Banking    Co.    v. 

Cunningham,   103  Me.  455,   §  339. 
Eastham   v.    Holt,   43    \V.   Va.    599, 

§  399. 
East    Hartford    v.    Hartford    Bridge 

Co.,  10  How.  (51  U.  S.)  511,  §  421. 
Easton  v.  Iowa,  188  U.  S.  220,  §§  65, 

66. 
East  St.  Louis  Connecting  Ry.  Co.  v. 

Jarvis,  92  Fed.  744,  §  247. 
East    Tennessee,    etc.,    Ry.    Co.    v. 

Interstate  Commerce  Commission, 

181  U.S.  1,  §41. 
Eaton  V.  Aspinwall,   19  N.  Y.   119, 

§246. 
Eaton  V.  Walker,  76  Mich.  579,  §  247. 
Eau  Claire  Canning  Co.  v.  Western 

Brokerage  Co.,  213  111.  561,  §  240. 
Ebling  Brewing  Co.  v.  Nim{)hins,  109 

N.  Y.  Supp.  80S,  §  89. 
Eccles  V.  Union  P.  Coal  Co.,  15  Utah, 

14,  §  316. 
Eckerson  v.  City  of  Des  Moines,  137 

Iowa,  452,  §  3. 
Eckert  v.  Pennsylvania  Rd.  Co.,  211 

Pa.  St.  267,  §  319. 
Eddy  V.  Syracuse  Rapid  Transit  Ry. 

Co.,  63  N.  Y.  Supp.  645,  §  319. 
Edelhoff    V.     Horner    Miller    Straw 

Goods    Mfg.    Co.,     86    Md.     595, 

§435. 


xlii 


TABLE   OF   CASES   CITED 


Edgerton  v.  Chicago,  Rock  Island  & 

Pac.  Ry.  Co.,  240  111.  311,  §  243. 
Edison   Electric    Light   Co.    v.    New 

Haven  Electric  Co.,  35  Fed.  233, 

§  ISO. 
Edson  V.  Southern  Pacific  Co.,   133 

Cal.  25,  §  113. 
Edwards  v.  Cleveland  Dryer  Co.,  S3 

111.  App.  643,  §  246. 
Edwards  v.  Greenwich  Savings  Bk., 

110  N.  Y.  Supp.  920,  §  89. 
Edwards     v.     Hill,     59     Fed.     723, 

§239. 
Edwards  v.  Michigan  Tontine  Invest- 
ment Co.,  132  Mich.  1,  §  413. 
Edwards  v.  Midland  Ry.  Co.,  6  Q.  B. 

D.  287,  §  336. 
Edwards  v.  Union  Bank  of  Florida,  1 

Fla.  136,  §  328. 
Educational  Co.  v.  Taggart,  121  111. 

App.  567,  §  339. 
Eggert  V.   Cleveland,    138  111.  App. 

434,  §  247. 
Eichoff  V.  FideUty  &  C.  Co.,  74  Minn. 

130,  §  ISl. 
Eight  Hours  Bill,  In  re,  21  Colo.  29, 

§18. 
Eingartner  v.   lUinois  Steel  Co.,  94 

Wis.  70,  §  188. 
Eldred  v.  American  Palace  Car  Co. 

(U.  S.  C.  C),  99  Fed.  168,  §  310. 
Electric    Park    Amusement    Co.    v. 

Wayne  Circuit   Judge,    155   Mich. 

040,  §  346. 
Elk  Fork  Oil  &  Gas  Co.  v.  Jennings 

(U.     S.     C.    C),     84     Fed.     839, 

§402. 
Elkhart  Nat.  Bank  v.  Converse  (U.  S. 

C.  C.  A.),  87  Fed.  252,  §  290. 
Elkhart  Nat.  Bank  v.  Northwestern 

Guaranty   Loan   Co.,   84   Fed.   76, 

§  228. 
Ellerman  v.   Chicago   Junction  Rys. 

&  Union  Stock  Yards  Co.,  49  N.  J. 

Eq.  217,  §  263. 
Elliott  V.  Puget  Sound  Wool  Prod- 
ucts  Co.,    52    Wash.    637,    §§304, 

306. 


Ellis     V.     United     States     (Eastern 

Dredging    Co.    v.    United    States; 

Bay  State  Dredging  Co.  v.  United 

States),  206  U.  S.  246,  §  27. 
Elm  City  Club  v.  Howes,  92  Me.  211, 

§321. 
El   Paso   v.   Rickman,   92  Tex.   86, 

§247. 
El  Paso  &  Northeastern  Ry.  Co.  v. 

Gutierrea,  215  U.  S.  87,  §§  26,  45, 

208. 
Elting  V.  First  National  Bank,  173 

111.  368,  §  201. 
Elyton    Land    Co.    v.    Birmingham 

Warehouse    &    Elevator    Co.,    92 

Ala.  407,  §  297. 
Employers'  Liability  Cases,  207  U.  S. 

463,  §§  26,  42. 
Emsheimer  v.  New  Orleans,  186  U.  S. 

33,  §  190. 
Ensign  Co.  v.  Carroll,  30  W.  Va.  532, 

§396. 
Ensley  Development  Co.  v.  Powell, 

147  Ala.  300,  §  3. 
Enterprise  Sav.  Assoc,  v.  Zumstein, 

67  Fed.  1000,  §  129. 
Ephland  v.  Missouri  Pacific  Ry.  Co., 

137  Mo.  187,  §  317. 
Equitable  Life  Assur.  Co.  v.  Brown, 

213  U.  S.  25,  §§  163,  276,  410. 
Erb  V.  Morasch,  177  U.  S.  584,  §  13. 
Erb  V.  Morasch,  177  U.  S.  1,  §  26. 
Erkins  v.  Tucker,  115  N.  Y.  Supp. 

256,  §  89. 
Ernst  V.   Rutherford   &  B.   Springs 

Gas    Co.,    56    N.    Y.    Supp.    403, 

§413. 
Ersfeld    v.    Exner,    128    App.    Div. 

(N.  Y.)  135,  §  292. 
Escanaba  Co.  v.  Chicago,  107  U.  S. 

078,  §§8,  26,  44,  56. 
Estes  V.  Timmons,    199  U.  S.   391, 

§129. 
Etowah  Milling  Co.  v.  Crenshaw,  116 

Ga.  406,  §  247. 
Evans  v.  Nellis,  187  U.  S.  271,  §  284. 
Evans  v.  Philadelphia  Club,  50  Pa. 

St.  107,  §  361. 


TABLE   OF  CASES   CITED 


xliii 


Evenson  v.  Ellington,  63  Wis.  734, 

§  245. 
Evans ville  &  Crawfordsville  Rd.  Co. 

V.  Baum,  26  Ind.  70,  §  317. 
Everhart  v.  Huntsville  College,   120 

U.  S.  223,  §  173. 
Evers  v.  Hudson,  36  Mont.  135,  §  3. 
Ewing  V.  Composite  Brake-Shoe  Co., 

16'J  Mass.  72,  §  254. 
J']xcelsior   Pebble   Phosphate   Co.    v. 

Brown  (U.  S.  C.  C),  74  Fed.  321, 

§  310. 
Exchange  Bank  of  Macon  v.  Macon 

Construction  Co.,  97  Ga.  1,  §  224. 
Ex  parte.     See  name. 
Express  Co.  (Atlantic  Express  Co.)  v. 

Wilmington    &    Weldon    Rd.    Co., 

Ill  N.  C.  463,  §§  107,  140. 
Exter  V.  Sawyer,  146  Mo.  302,  §§  259, 

301. 


Fairbank  &  Co.  v.  Cincinnati  &  N. 

O.  Ry.  Co.,  54  Fed.  420,  §  182. 
Fairbanks  v.  Boston  Storage  Ware- 
house Co.,  ISO  Mass.  419,  §  317. 
Fairfield's    Appeal,    57    Conn.    167, 

§121. 
Fair  Haven  Rd.  Co.  v.  New  Haven, 

203  U.  S.  379,  §  22. 
Falconer    v.    Campbell,    2    McLean 

(U.  S.  C.  C),  195,  §227. 
Fargo     v.    Hart,     198     U.    S.    490, 

§421. 
Fargo  V.  McVicker,  55  Barb.  (N.  Y.) 

437,  §  175. 
Fargo  v.  Michigan,   121   U.  S.   230, 

§  61. 
Farish    v.    Cieneguita    Copper    Co. 

(Ariz.,  1909),  100  Pac.  781,  §  253. 
Farmers'  &  Mechanics'  Bank  v.  Hall, 

120  Ala.  14,  §  163. 
Farmers'  &  Mechanics'  Nat.  Bank  v. 

Bearing,  91  U.  S.  29,  §§  65,  66. 
Farmers'  &  Merchants'  Bank  v.  Ben- 
nett &  Co.,  120  Ga.  1012,  §  319. 
Farmers'   &  Merchants'  Ins.  Co.   v. 

Dobney,  189  U.  S.  301,  §  13. 


Farmers'  Co-op.  Trust  Co.  v.  Floyd, 
47  Ohio  St.  525,  §  265. 

Farmers'  Loan  &  Trust  Co.  v.  Funk, 
49  Neb.  353,  §  279. 

Farmers'  Loan  &  Trust  Co.  v.  Gales- 
burg,  133  U.  S.  156,   §  435. 

Farmers'  Loan  &  Trust  Co.  v.  Hous- 
ton &  T.  C.  R.  Co.,  44  Fed.  115, 
§416. 

Farmers'  Loan  &  Trust  Co.  v.  New 
York  &  Northern  Ry.  Co.,  150 
N.  Y.  410,  §  266. 

Farmers'  Loan  &  Trust  Co.  v.  North- 
ern Pac.  Ry.  Co.,  83  Fed.  249, 
§131. 

Farmers'  Loan  &  Trust  Co.  v.  Stutt- 
gart &  A.  R.  R.  Co.,  92  Fed.  246, 
§417. 

Farmington  v.  Pillsbury,  114  U.  S. 
138,  §  194. 

Farm  Investment  Co.  v.  Carpenter, 
9  Wyo.  110,  §93. 

Farrington  v.  Tennessee,  161  U.  S. 
134,  §  68. 

Farwell  v.  Colonial  Trust  Co.  (U.  S. 
C.  C.  A.),  147  Fed.  480,  §  339. 

Fassett,  In  re,  142  U.  S.  479,  §  400. 

Faxon  (M.  B.)  Co.  v.  Lovett  Co., 
60  N.  J.  L.  128,  §  227. 

Fay  V.  Noble,  7  Cush.  (Mass.)  188, 
§246. 

Fein  v.  Weir,  114  N.  Y.  Supp.  426, 
§  243. 

Feneran  v.  Singer  Mfg.  Co.,  47  N.  Y. 
Supp.  284,  §  318. 

Ferguson  v.  Ann  Arbor  Rd.  Co.,  45 
N.  Y.  Supp.  172,  §  254. 

Ferguson  v.  Day,  6  Ind.  App.  138, 
§  341, 

Ferguson  v.  Sherman,  116  Cal.  169, 
§284. 

Fernchild  v.  C.  G.  Yuengling  Brew. 
Co.,  40  N.  Y.  Supp.  1119,  §  254. 

Fidelity  Ins.  T.  &  S.  D.  Co.  v.  Nor- 
folk &  W.  R.  Co.,  90  Fed.  175, 
§417. 

FideUty  Mutual  Life  Assoc,  v.  Met- 
tler,  185  U.  S.  308,  §  13. 


xliv 


TABLE    OF   CASES   CITED 


Field    V.    Barber    Asphalt    Co.,    194 

U.  8.  018,  §  14. 
Finklea   v.    Farish    (.Via.,    I'JO'J),    49 

So.  366,  §  3. 
Finley   v.    United    States    Bank,    11 

Wheat.  (24  U.  S.)  304,  §  416. 
Finnegan  v.    Noerenberg,    52   Minn. 

239,  §  246. 
Firestone    Tire    &    Rubber    Co.    v. 

Agnew,  194  N.  Y.  165,  §  308. 
First  Congregational  Church  v.  Grand 

Rapids  Fur  Co.,  15  Colo.  App.  46, 

§248. 
First  M.  E.  Church  v.  Atlanta,  76 

Ga.  181,  §223. 
First  Nat.  Bank  v.  Bacon,  98  N.  Y. 

Supp.  717,  §  404. 
First  National  Bank  v.  City  Council 

of  Estherville,  215  U.  S.  341,  §  209. 
First  Nat.  Bank  v.  Gatton,  172  III. 

625,  §  323. 
First    Nat.    Bank    v.    Henry    (Ala., 

1906),  49  So.  97,  §  247. 
First  National  Bank  v.  Lancaster,  54 

Neb.  467,  §  376. 
First  National  Bank  of  Belle  Fourche, 

In  re,  152  Fed.  64,  §§  82,  197. 
First  National  Bank  of  Chicago  v. 

Trebein  Co.,  59  Ohio  St.  316,  §  225. 
First  Nat.  Bank  of  Concord  v.  Haw- 
kins, 79  Fed.  52,  §  247. 
First    National    Bank    of    Salem    v. 

Almy,  117  Mass.  476,  §  265. 
First    Nat.     Bank    of     Winston     v. 

Taylor,  122  N.  C.  569,  §  323. 
Fish    V.    Kanawha    Dispatch    Line, 

118  111.  284,  §  247. 
Fish  V.  Smith,  73  Conn.  377,  §  247. 
Fitts  V.  McGhee,  172  U.  S.  516,  §  155. 
Fitzgerald    &    Mallory    Construction 

Co.   V.   Pltzgerald,    137   U.   S.  98, 

§§  182,  201. 
Fletcher  v.  Hamlet,  116  U.  S.  408, 

§214. 
Fletcher  v.  Newark  Teleph.  Co.,  55 

X.  J.  Eq.  47,  §  439. 
Florida  C.  &  P.  R.  Co.  v.  Bell,  87 

Fed.  369,  §  208. 


Florida   Cent.    &    Fac.    Ry.    Co.    v. 

Scarlett,  91  Fed.  349,  §  319. 
Florida,  etc.,  R.  Co.  v.  State  ex  rel. 

Tavares,  31  Fla.  482,  §  348. 
Florscheim  &  Co.  v.  Fry,   109  Mo. 

App.  487,  §  247. 
Flour  City  National  Bank  v.  Shire, 

84  N.  \    Supp.  410,  §  293. 
Flynn  v.  Brooklyn  City  R.  R.  Co., 

158  N.  Y.  493,  §§  306,  404. 
Fogg  V.  Blair,  139  U.  S.  118,  §§  279, 

292. 
Folsom  V.  Detrick  Fertilizer  &  Chem- 
ical Co.,  85  Md.  52,  69,  §  224. 
Fongeray  v.  Cord,  50  N.  J.  Eq.  185, 

§  266. 
Foote  V.  City  of  Cincinnati,  9  Ohio, 

31,  §  330. 
Ford     V.     Chicago     Milk    Shippers' 

Assoc,  155  111.  166,  §  224. 
Ford  V.  Delta  &  Pine  Land  Co.,  164 

U.  S.  662,  §  79. 
Forrester     v.     Boston     &     Montana 

Consol.  Copper  &  S.  Min.  Co.,  21 

Mont.  565,  §  272. 
Fort   Madison   Bank   v.    Alden,    129 

U.  S.  372,  §  294. 
Fort.     See  Ft. 
Foster  v.  Essex  Bank,  17  Mass.  479, 

§323. 
Foster    v.    Mansfield,    Coldwater    & 

Lake  Michigan  R.  Co.  (U.  S.  C.  C), 

36  Fed.  627,  §  301. 
Foster  v.  White,  86  Ala.  467,  §  441. 
Fourth  National  Bank  v.  Francklyn, 

120  U.  S.  747,  §  307. 
Franklin  v.   Brooklyn  Daily  Eagle, 

99  N.  Y.  Supp.  300,  §  317. 
Franklin  Life  Ins.  Co.  v.  People,  200 

111.  619,  §  324. 
Fraternal  Mystic  Circle  v.  State,  39 

Ohio  L.  J.  43,   §§34S,  361. 
Frederick   v.   San   Luis   Obispo,    118 

Cal.  391,  §  376. 
Fred  Macey  Co.  v.  Macey,  135  Fed. 

727,  §§  176,  177. 
Fred  Macey  Co.  v.  Macey,  143  Mich. 

138,  §  259. 


TABLE    OF   CASES   CITED 


xlv 


Freeport  Water  Co.  v.  Freeport  City, 

180  U.  S.  587,  §  95. 
Fremont    v.    Crippeii,    10   Cal.    211, 

§368. 
Fremont,   Elkhorn  &  Missouri  Val- 
ley Rd.  Co.  V.  Hagblad,  72  Neb. 

773,  §319. 
Frenchman's  Bay  &  Mt.  D.  &  Laud 

&  W.  Co.,  84  Me.  195,  §  163. 
Fruits  V.  Elmere,  8  Ind.  App.  278, 

§241. 
Ft.  Edward,  Village  of,  v.   Hudson 

Valley  Rd.   Co.,    192   N.   Y.    139, 

§  142. 
Ft.  Worth  St.  Rd.  Co.  v.  Rosedale 

St.  Rd.  Co.,  68  Tex.  169,  §  223. 
Ft.     See  Fort. 
Fulgham  v.  Midland  Valley  R.  Co., 

167  Fed.  660,  §§  26,  137. 
Fuller  V.  Venable  (U.  S.  C.  C.  A.), 

118  Fed.  543,   §  255. 
Fuller  Laundry  Co.,  In  re,  79  Minn. 

414,  §  223. 

G 

Gaines  v.  Thompson,  7  Wall.  (74 
U.  S.)  347,  §  130. 

Galveston,  H.  &  S.  Ry.  Co.  v.  Gon- 
zales, 151  U.  S.  496,  §  201. 

Galveston,  Harrisburg  &  San  An- 
tonio Ry.  Co.  V.  Texas,  210  U.  S. 
217,  §61. 

Galveston,  H.  &  S.  A.  Ry.  Co.  v. 
Texas,  170  U.  S.  226,  §  209. 

Gamble  v.  Queens  County  Water 
Co.,  123  N.  Y.  91,  §§  260,  266,  293. 

Gann  v.  Chicago  Great  Western  Ry. 
Co.,  72  Mo.  App.  34,  §  319. 

Gano  V.  Minneapolis  &  St.  Louis  Rd. 
Co.,  114  Iowa,  713,  §  14. 

Ganse  v.  Boldt,  99  N.  Y.  Supp.  442, 
§307. 

Gardner  v.  The  State,  77  Kan.  742, 
§390. 

Garland  v.  Wynn,  20  How.  (61  U.  S.) 
6,  §  130. 

Garner  v.  Second  National  Bank,  66 
Fed.  369,  §  201.' 


'Garner    v.    Second    Nat.    Bank,    67 

Fed.  833,   §  423. 
Garrett  v.  Ramsay,  26  W.  Va.  345, 

§167. 
Garrison  v.  Technic  Electrical  Works, 

55  N.  J.  Eq.  708,  §  412. 
Gartside  Coal  Co.  v.  Maxwell  (C.  C), 

22  Fed.  197,  §  246. 
Gates   v.    New  York   Recorder  Co., 

156  N.  Y.  228,  §  335. 
Gates  V.  Tippecanoe  Stone  Co.,   57 

Ohio  St.  60,  §  296. 
Geer  v.  Mathieson  Alkali  Works,  190 

U.  S.  428,  §  213. 
General  Electric  Co.  v.  La  Grande 

Edison  Electric  Co.,  87  Fed.  590, 

§416. 
General  Oil  Co.  v.  Crane,  209  U.  S. 

211,  §§  59,  63,  199. 
Geneva  Mineral  Springs  Co.  v.  Cour- 

sey,  61  N.  Y.  Supp.  98,  §  247. 
Georgia  v.  Madrazo,  1  Pet.  (26  U.  S.) 

110,  §  155. 
Georgia    v.    Tennessee    Copper    Co., 

206  U.  S.  230,  §  432. 
Georgia   Southern   Rd.    Co.   v.   Mer- 
cantile  Trust   &  Deposit  Co.,   94 

Ga.  306,  §  415. 
Gerner    v.    Mosher,    58    Neb.     135, 

§441. 
Gertgens  v.  O'Connor,  191  U.  S.  237, 

§  129. 
Gibbons  v.  Ogden,  9  Wheat.  (22  U. 

S.)  1,  §§  8,  43,  44,  56. 
Gibbs  v.  Davis,  27  Fla.  531,  §§  278, 

284. 
Gibson  v.  Ogden,  9  Wheat.  (22  U.  S.) 

1,  §7. 
Giddings  v.    Holter,    19   Mont.    263, 

§  298. 
Gilbert  v.  New  Zealand  Ins.  Co.,  49 

Fed.  884,  §  181. 
Gilden  &  J.  Varnish  Co.  v.  Interstate 

Nat.  Bank  (U.  S.  C.  C.  A.),  69  Fed. 

912,  §  254. 
Giles  V.  Stanton,  86  Tex.  620,  §  239. 
Gillan  v.  State  Journal  Printing  Co., 

96  Wis.  460,  §  335. 


xlvi 


TABLE    OF   CASES    CITED 


Gillett  V.  Missouri  Valley  R.  Co.,  55 

Mo.  315,  §§  317,336. 
Gillette  v.  Aurora  Ry.  Co.,  228  111. 

261,  §  247. 
Gilman    v.    Druse,     111     Wis.    400, 

§§  246,  247. 
Gilman     v.     Philadelphia,     3     Wall. 

(70  U.S.)  713,  §§44,  56. 
Gladson  v.  Minnesota,  166  U.  S.  427, 

§§  26,  50,  188. 
Gleason   Mfg.   Co.    v.    Hoffman,    168 

111.  App.  25,  §  413. 
Glens  Falls  Paper  Mill  Co.  v.  Trask, 

51  N.  Y.  Supp.  1)77,  §  254. 
Gloucester    Ferry    Co.    v.    Pennsyl- 
vania, 114  U.  S.  196,  §§  44,  60,  61. 
Goddard  v.  Grand  Trunk  R.  Co.,  57 

Me.  202,  §  317. 
Godwin  v.  Carolina  Telcph.  &  Teleg. 

Co.,  136  N.  C.  258,  §  371. 
Goff  V.  Norfolk  &  W.  R.  Co.,  36  Fed. 

29!),  §  194. 
Gogebic  Inv.  Co.  v.  Iron  Chief  Min. 

Co.,  78  Wis.  427,  §§  291,  292. 
Golden  Star  Lodge,  No.  1,  v.  Watter- 

son,  158  Mich.  696,  §§248,347,360. 
Goldey  v.  Morning  News,  156  U.  S. 

518,  §§  181,   182,  201. 
Goodbread  v.  Philadelphia,  B.  &  B. 

M.   Turnp.    Co.,   15   Mont.   Co.  L. 

Rep.  21,  §  247. 
Goodlett   V.    Louisville    &    Nashville 

Rd.  Co.,  122  U.  S.  391,  §  179. 
Goodspeed    v.    East    Haddam    Bk., 

22  Conn.  530,  §§  332,  336. 
Goodwin  v.  Boston  &  Maine  Rd.  Co., 

127  Fed.  986,  §  178. 
Gorder  v.  Connor,  56  Neb.  781,  §  281. 
Gordon,    Ex   parte,    104    U.   S.    515, 

§400. 
Gordon  v.   Third   National   Bank  of 

Chattanooga,   144  U.  S.  97,  §  173. 
Gordon  v.  United  States,  117  U.  S. 

697,  §  137. 
Gorman  v.  Southern  Pac.  Co.,  97  Cal. 

1,  §319. 
Gormley    v.    Brooklyn   Heights   Rd. 

Co.,  102  N.  Y.  Supp.  692,  §  89. 


Gow  V.  Collin  &  P.  Lumber  Co.,  109 

Mich.  45,  §§237,246. 
Grace   v.   American   Cent.    Ins.   Co., 

109  U.  S.  278,  §  173. 
Graham  v.  City  of  Greenville,  67  Tex. 

62,  §  247. 
Grande  Ronde  Lumber  Co.  v.  Cotton, 

12  Colo.  App.  375,  §  24S. 
Grand  Lodge  Ancient  Order  U.  W.  v. 

Clraham,  96  Iowa,  592,  §  247. 
Grand  Rapids  Bridge  Co.  v.  Prange, 

35  Mich.  400,  §  247. 
Grand  Trunk  Ry.  Co.  v.  Central  Ver- 
mont R.  Co.,  103  Fed.  740,  §  415. 
Grant   County   v.   Lake   County,    17 

Oreg.  453,  §  227. 
Gratiot    Street    Warehouse ,  Co.    v. 

St.  Louis,  A.  &  T.  H.  R.  Co.,  221 

111.  418,  §  318. 
Gravel  Road  Co.  v.   Hogadone,   150 

Mich.  638,  §  249. 
Great  Northern  Ry.  Co.  (Ireland)  v. 

Donegal  Ry.  Co.,   11   Ry.  &  Can. 

Traff.  Cas.  47,  §  113. 
Great    Northern    Ry.    Co.    v.    Great 

Central   Ry.   Co.,    10  Ry.   &  Can. 

Traff.  Cas.  266,  §  119. 
Great  Northern  Ry.  Co.  v.  Kalispell 

Lumber  Co.,  165  Fed.  25,  §§  106, 

132. 
Great  Southern  Fireproof  Hotel  Co. 

v.  Jones,  193  U.  S.  532,  §  12. 
Great  Southern  Fireproof  Hotel  Co. 

V.   Jones,    177  U.  S.   449,    §§  157, 

176. 
Great  Southern  Ry.  Co.  v.  Tift,  148 

Fed.  1021,  §  106. 
Great  Western  Rd.  Co.  v.  Comas,  33 

111.  185,  §  243. 
Green     v.     Chicago,     Burlington     & 

Quincy    R.    Co.,    205    U.    S.    530, 

§  182. 
Green  v.  C^larke,  12  N.  Y.  343,  §  243. 
Green  v.  Grigg,  90  N.  Y.  Supp.  565, 

§  247. 
Green  Bay  Lumber  Co.  v.  The  Chi- 
cago, Rock  Island  &  Pac.  Ry.  Co., 

102  lowu,  292,   §  380. 


TABLE    OF   CASES   CITED 


xlvii 


Green  County  v.  Conness,  101)  U.  S. 

104,  §  180. 
Greene  v.  Mercantile  Trust  Co.,  Ill 

N.  Y.  Supp.  802,  §  339. 
Greenville   &   Columbia   Rd.   Co.   v. 

Pastlow,  14  Rich  Law  (S.  C),  237, 

§330. 
Greenville,    City    of,    v.    Greenville 

Waterworks    Co.,    125    Ala.    625, 

§247. 
Gregg  v.  Mercantile  Trust  Co.,   109 

Fed.  220,  §  417. 
Griffith  V.  Green,  129  N.  Y.  517,  §  287. 
Grignon's  Lessee  v.   Astor,   2   How. 

(43  U.  S.)  319,  §§  81,  82. 
Griswold   v.    Hepburn,    2   Duv.    (63 

Ky.)  20,  §  3. 
Groel  V.  United  Electric  Co.,  70  N. 

J.  Eq.  616,  §§  259,  301. 
Grosh  V.  Ivanhoe  Land  &  I.  Co.,  95 

Va.  161,  §  435. 
Gross,  In  re,  78  Fed.  107,  §  137. 
Groton  Bridge  &  Mfg.  Co.  v.  Ameri- 
can   Bridge    Co.,    151    Fed.    871, 

§237. 
Guaranty  Trust  &  S.  D.  Co.  v.  Green 

Cove  S.  &  M.  R.  R.  Co.,  139  U.  S. 

137,  §414. 
Guardian  Trust  Deposit  Co.  v.  Fisher, 

200  U.  S.  57,  §  327. 
Gude  &  Co.  V.  Murphy,   113  N.  Y. 

Supp.  860,  §  9. 
Gulf,  Colorado  &  Santa  Fe  Ry.  Co. 

V.  Ellis,  165  U.  S.  150,  §§  13,  14, 

30. 
Gulf,  Colorado  &  Santa  Fe  Ry.  Co. 

V.  Hefley,  158  U.  S.  98,  §§  2,  32. 
Gulf,  Colorado  &  Santa  Fe  Ry.  Co. 

V.  State  (Tex.  Civ.  App.),  120  S.  W. 

1028,  §§  108, 111. 
Gulf,  Colorado  &  Santa  Fe  Ry.  Co.  v. 

State  of  Texas,  72  Tex.  404,  §  432. 
Gulf  Compress  Co.  v.  Harris,  Gartner 

&  Co.,  108  Ala.  343,  §§  403,  404, 

406,  409,  410. 
Gundlin    v.    Hamburg-A  m  e  r  i  c  a  n 

Packet  Co.,  28  N.  Y.  Supp.  572, 

§200. 


Gunn  V.  Brinkley  Car  Works  &  Mfg. 

Co.,  66  Fed.  382,  §  163. 
Gunnison  v.  Chicago,  M.  &  St.  P.  Ry. 

Co.,  117  Fed.  629,  §416. 
Gunter  v.  Atlantic  Coast  Line  Rd. 

Co.,  200  U.  S.  273,  §§  155,  201. 
Guthrie  v.  Harkness,  199  U.  S.  148, 

§66. 
Guthrie  National  Bank  v.  Guthrie, 

173  U.  S.  528,  §  102. 

H 

Hackett  v.  Wilson,  12  Orcg.  25,  §  247. 
Haehl  v.  Wabash  Rd.  Co.,  119  Mo. 

325,  §  317. 
Hager   v.   Cleveland    &   Bassett,    36 

Md.  476,  §  284. 
Hager,  Auditor,  v.  New  South  Brew- 
ing Co.,  28  Ky.  L.  Rep.  895,  §  350. 
Hagood  V.  Southern,   117  U.  S.  52, 

§  155. 
Hale  V.  Henkel,  201  U.  S.  43,  §§  42, 

137. 
Hall  V.  De  Cuir,  95  U.  S.  485,  §  43. 
Halsey  v.  Jewitt  Dramatic  Co.,   99 

N.  Y.  Supp.  1122,  §  236. 
Halsey  v.  Rapid  Transit  St.  Ry.  Co., 

47  N.  J.  Eq.  380,  §  242. 
Hambleton   v.    Glenn,    85   Va.    991, 

§  299. 
Hamilton  v.   Reeves,  69  Kan.  844, 

§236. 
Hamilton    Company    v.    Massachu- 
setts, 6  Wall.  (73  U.  S.)  632,  §§  72, 

77. 
Hammond  v.  International  Ry.  Co., 

116  N.  Y.  Supp.  854,  §  17. 
Hammond  Packing  Co.  v.  Arkansas, 

2r2U.  S.  322,  §§  13,  158. 
Hampton    v.    Buchanan,    51    Wash. 

155,  §  266. 
Hancock  v.  Holbrook,  40  La.  Ann. 

53,  §  253. 
Hancock    Nat.    Bank   v.    Ellis,    172 

Mass.  39,  §  286. 
Hancock  Nat.  Bank  v.  Farnum,  176 

U.  S.  640,  §  284. 


xlviii  TABLE    OF   CASES    CITED 

Hancock  Nat.  Bank  v.  Farnum,  20  Hartnett  v.  Plumbers'  Supply  Assoc, 

R.  I.  466,  §  286.  160  Mass.  229,  §  385. 

Hand  v.  Dexter,  41  Ga.  454,  §  260.  Harvey  v.  Maine  Condensed  Milk  Co., 

Handley   v.   Stutz,    139   U.   S.   417,  92  Me.  115,  §  325. 

§§  279,  291.  Hasting,  Matter  of,  112  N.  Y.  Supp. 

Hannibal  &  St.  Joseph  Rd.  Co.  v.  800,  §  441. 

Husen  (see  Railroad  Co.  v.  Husen),  Hastings    v.    Eames,    68    Fed.    726, 

§§  7,  8,  10,  44,  58,  108.  §§  144,  149. 

Hannibal  &  St.  Joseph  Rd.  Co.   v.  Hastings    Industrial   Co.    v.    Moran, 

Missouri    River    Packet    Co.,    125  143  Mich.  679,  §  236. 

U.  S.  260,  §  56.  Hastings  Malting  Co.  v.  Iron  Range 

Hans  V.  Louisiana,  134  U.  S.  1,  §  155.  Brew.  Co.,  65  Minn.  28,  §  294. 

Hanson  v.   Davison,   73  Minn.  454,  Hatch  v.  Reardon,   204  U.  S.   152, 

§  284.  §§  60,  68. 

Hanson   v.   Dayton,   73   Minn.   454,  Hatry  v.  Painesville  &  Y.  Ry.  Co., 

§  286.  1  Ohio  C.  D.  238,  §  247. 

Harbison  v.  Knoxville  Iron  Co.,  103  Haupt    v.    Rogers,    170    Mass.    71, 

Tenu.  421,  §  26.  §§  386,  391. 

Harder's   Fireproof  Storage   &  Van  Hause  v.  Mannheimer,  67  Minn.  194, 

Co.  v.  Chicago,  235  111.  58,  §  3.  §  247. 

Hardware  Co.  v.  Railroad  (State  ex  Havens  v.   Hartford  &  New  Haven 

rel.   North  Carolina  Corp.   Comm.  Rd.  Co.,  28  Conn.  69,  §  332. 

&    Hart- Ward    Hardware    Co.    v.  Havens  &  Geddes  Co.  v.  Diamond, 

Southern  Ry.  Co.),  147  N.  C.  483,  93  111.  App.  557,  §  182. 

§  140.  Hawes  v.  Oakland,   104  U.  S.  450, 

Harmore    v.    Vicksburg,    Shreveport  §§  264,  305. 

&  Pacific  Ry.  Co.,  85  Miss.  426,  Hawkins  v.   Glenn,    131   U.  S.  319, 

§  317.  §  299. 

Harrill  v.  Davis  (U.  S.  C.  C.  A.),  168  Hawkins  &  Co.  v.  Riley,  56  Ky.  (17 

Fed.  187,  §§  246,  247.  B.  Mon.),  101,  §  317. 

Harriman  v.  Interstate  Com.  Comm.,  Hawley   v.    Diller,    178    U.    S.    476, 

211  U.  S.  407,  §§  49,  137.  §  130. 

Harrington  v.  Florence  Oil  Co.,  178  Hawthorne  v.  Calef,  2  Wall.  (69  U. 

Pa.  St.  444,  §  413.  S.)  10,  §  281. 

Harris   v.    Gateway   Land   Co.,    128  Hawthorne  v.  People,   109  111.  302, 

Ala.  652,  §§246,  247.  §3. 

Harrison  v.   Remington   Paper  Co.,  Hay   v.    Alexandria    &    Washington 

140  Fed.  388,  §  284.  Rd.  Co.,  4  Hughes  (U.  S.  C.  C, 

Hart   Mfg.    Co.    v.    Maim's   Boudoir  1882),  331,  §  278. 

CarCo.,  65Mich.  564,  §  321.  Hayburn's  Case,  2  Dall.    (2  U.  S.) 

Hartford  v.  Hartford  Street  Ry.  Co.,  409,  §  137. 

73  Conn.  327,  §  369.  Hayden  v.  Middlesex  Turnpike,   10 

Hartford  Fire  Ins.  Co.  v.  Erie  Rd.  Mass.  397,  §  321. 

Co.,  172  Fed.  899,  §  194.  Hayden  v.  Official  Hotel  Red-Book 

Hartford  Fire  Ins.  Co.  v.  Kirkpatrick,  &  D.  Co.  (U.  S.  C.  C),  42  Fed.  875, 

111  Ala.  456,  §  339.  §  268. 

Hartley  v.  Welsh,  8  Pa.  Dist.  R.  546,  Hayes    v.    Missouri,    120   U.   S.   68, 

§  402.  §  13. 


TABLE   OF  CASES   CITED 


xlix 


Hayne  v.  Metropolitan  Trust  Co.,  67 

Minn.  245,  §  12S. 
Haynes  v.  Clinton  Printing  Co.,  169 

Mass.  512,  §  335. 
Hayward  v.  Lesson,  176  Mass.  310, 

§259. 
Hazleton    v.    Locke,    104    Me.    164, 

§340. 
Head  Money  Cases,   112  U.  S.  580, 

§§44,  61. 
Heath  &  Mulligan  Co.  v.  Worst,  207 

U.S.  338,  §§4,  6,  18. 
Heckscher  v.  Edenborn,   115  N.  Y. 

Supp.  673,  §  259. 
Heff,  Matter  of,  197  U.  S.  488,  §  8. 
Heileman  Brewing  Co.  v.  Peimeise, 

85  Minn.  121,  §  236. 
Henderson    v.    Carbondale    Coal    & 

Coke  Co.,  140  U.  S.  25,  §  201. 
Henderson  v.  Central  Passenger  Ry. 

Co.,  21  Fed.  358,  §  180. 
Henderson   v.    Hall,    134    Ala.    455, 

§279. 
Henderson  v.   New  York,  92  U.  S. 

259,  §§  18,  44,  61. 
Henderson  Bridge  Co.  v.  Henderson 

City,  141  U.  S.  679,  §§  56,  64. 
Henderson  Bridge  Co.  v.  Henderson 

City,  173  U.  S.  592,  §  56. 
Henderson  Bridge  Co.  v.  Kentucky, 

166  U.S.  150,  §§56,65,78. 
Hendrickson    v.    Bradley,    85    Fed. 

508,  §  303. 
Henley  v.   Meyers,   215  U.   S.   373, 

§277. 
Hennessey  v.  Richardson  Drug  Co., 

189  U.  S.  25,  §  173. 
Hennington   v.    Georgia,    163   U.   S. 

299,  §§7,48,58. 
Henry  v.  Railroad  Co.,  139  Pa.  St. 

289,  §  335. 
Hepner  v.  United  States,  213  U.  S. 

203,  §  100. 
Hercules  Iron  Works  v.  Elgin,  Joliet 

&  Eastern  Ry.  Co.,  141   111.  491, 

§86. 
Herrick  v.  Humphrey  Hardware  Co., 

73  Neb.  809,  §§  223,  340. 

D 


Herrick  v.  Minneapolis  &  St.  Louis 

Ry.  Co.,  31  Minn.  11,  §  26. 
Herring  v.  New  York,  Lake  Erie  & 

W.  Rd.  Co.,  105  N.  Y.  340,  §  384. 
Hess  V.  Reynolds,  113  U.  S.  73,  §  239. 
Heyman  v.  Southern  Ry.   Co.,   203 

U.  S.  270,  §  53. 
Hibernia  Savings  &  Loan  Society  v. 

San  Francisco,  200  U.  S.  310,  §  69. 
Hickman  v.  State,  62  N.  J.  L.  499, 

§19. 
Hiern  v.  St.  Paul,  104  La.  280,  §  398. 
Higgins   V.    Lansingh,    154    111.    301, 

§163. 
Hill  V.  Graham,  11  Colo.  App.  536, 

§284. 
Hinckley  v.  Railroad  Co.,  100  U.  S. 

153,  §  413. 
Hinmon    v.    Somers    Brick    Co.,    75 

N.  J. L.  869,  §  334. 
Hirsch   v.   Leatherbee   Lumber   Co., 

69  N.  J.  L.  509,  §  319. 
Hite  V.  Central  Ry.  Co.  of  N.  J.,  171 

Fed.  370,  §  136. 
Hoag  V.  Lamont,  60  N.  Y.  96,  §  200. 
Hoard  v.  Chesapeake  &  O.  Ry.,  123 

U.  S.  222,  §§  320,  419. 
Hobe-Peters  Land  Co.  v.  I'arr,   170 

Fed.  644,  §  192. 
Hodson    V.    Eugege    Glass    Co.,    40 

N.  E.  971,  §  435. 
Hogle  V.   H.  H.   Franklin  Mfg.  Co., 

112  N.  Y.  Supp.  881,  §  317. 
Hohorst  V.  Hamburg- Amer.  Packet 

Co.,  38  Fed.  273,  §  181. 
Holden    v.    Hardy,    169   U.   S.    366, 

§§  18,  27. 
Holden  v.  Hardy,  14  Utah,  71,  §  18. 
Holgate  V.  Oregon  Pac.  R.  Co.,  16 

Ore.  123,  §  227. 
Holland   v.  Challen,    110  U.   S.    15, 

§§  167,  404. 
HoUie  V.  Sandford  Ross,   68    N.  J. 

L.  324,  §  317. 
Holly  V.  State,    14  Tex.   App.  505, 

§3. 
Holly  River  Coal  Co.  v.  Howell,  36 

W.  Va.  489,  §  315. 


1  TABLE    OF   CASES    CITED 

Holly   Shelter   Rd.   Co.    v.    Newton,  Hovey's  Estate,   lu  re,   198  Pa.  St. 

133  N.  C.  132,  §§  395,  396.  385,   §  162. 

Holmes  v.  Goldsmith,  147  U.  S.  150,  Howarth  v.  Angle,  57  N.  Y.  Supp. 

§  192.  187,  §  284. 

Holmes  v.  Oregon  &  California  Rd.  Howell  v.  State,  83  Neb.  448,  §  457. 

Co.,  9  Fed.  229,  §  82.  Hublxird  v.  Justices'  Court,  5  Cal. 

Holmes  v.   Willard,    125   N.   Y.   75,  App.  90,  §  397. 

§  262.  Huber    v.    Martin,     127     Wis.    412, 

Home  Fire  Insurance  Co.  v.  Barber,  §§  246,  247,  255,  404. 

67  Neb.  644,  §§  224,  272.  Hubert  v.  New  Orleans,  215  U.  S.  170, 

Home  Forum  B.  O.  of  111.  v.  Jones,  §  68. 

20  Tex.  Civ.  App.  68,  §  181.  Hudson  v.  Missouri,  Kansas  &  Texas 

Home  Ins.  Co.  v.  Augusta,  93  U.  S.  Ry.  Co.,  16  Kan.  470,  §  317. 

116,  §§  16,  208.  Hudson  Oil  &  Supply  Co.,  Matter  of. 

Home  Insurance  Co.  v.  New  York,  214  U.  S.  487,  §§  348,  400. 

134  U.  S.  594,  §  74.  Huguley  Mfg.  Co.,  In  re,  184  U.  S. 
Home    Ins.     Co.     v.     Northwestern  297,  §  348. 

Packet  Co.,  32  Iowa,  233,  §  4.  Hughes  v.  Murdock,  45  La.  Ann.  935, 

Home    Min.    Co.    v.    McKibben,    60  §  3. 

Kan.  387,  §§  287,  305.  Huhng  v.  Kaw  Valley  R.  &  I.  Co., 

Home  Savings  Bank  v.  Des  Moines,  130  U.  S.  559,  §  23. 

205  U.  S.  503,  §§  67,  71,  72,  77.  Humbird  v.  Avery,   195  U.  S.  480, 

Honolulu  Rapid  Transit  &  Land  Co.  §  130. 

v.  Hawaii,  211  U.  S.  282,  §§4,  5,  Hunt  v.  New  York  Cotton  Exchange, 

21,  32,  106,  120,  141.  205  U.  S.  322,  §  421. 

Honolulu  Rapid  Transit  &  Land  Co.  Hurlbert  v.  T.  D.  Kellogg  Lumber  & 

V.  Wilder,  211  U.  S.  137,  §  79.  Mfg.  Co.,  115  Wis.  225,  §  339. 

Hood  V.  McNaughton,  54  N.  J.  L.  Huse    v.    Glover,    119    V.    S.    543, 

425,  §  288.  §  56. 

Hooper  v.  Cahfornia,  155  U.  S.  648,  Huttig  Bros.  Manuf.  Co.  v.  Denny 

§§  12,  55.  Hotel  Co.,  6  Wash.  122,  §  236. 

Hopkins  v.  State,  64  Neb.  10,  §  368.  Hyatt  v.  Allen,  54  Cal.  353,  §  376. 

Hopkins  v.  United  States,  171  U.  S.  Hyde  v.  Southern  Ry.  Co.,  30  App. 

578,  §  457.  D.  C.  000,  §§  26,  44,  208. 

Horn  Silver  Min.  Co.  v.  New  York,  Hyer  v.  Richmond  Traction  Co.,  168 

143  U.  S.  305,  §  223.  U.  S.  471,  §  407. 

Horton  v.  State,  60  Neb.  701,  §  379.  Hyer  v.  Richmond  Traction  Co.,  80 

Hospes  V.  Northwestern  Mfg.  &  Car  Fed.  839,  §  437. 

Co.,  48  Minn.  174,  §§  279,  291,  292. 

Hotel   Co.   V.    Wade,   97   U.   S.    14,  j 

§416. 

Houston  V.  Filer  Stowell  Co.,  85  Fed.  lUinois  Central  Rd.  Co.  v.  Adams, 

757,  §  182.  180  U.  S.  28,  §§  83,  155. 

Houston  &  Texas  Central  R.  Co.  v.  Illinois  Central  Rd.  Co.  v.  Common- 

Mayes,  201  U.  S.  321,  §§  47,  118.  wealth,  23  Ky.  L.  Rep.  544,  §§  110, 

Houston  &  T.  C.  R.  Co.  v.  Texas,  177  115. 

U.  S.  66,  S  206.  Illinois  Cent.  Rd.  Co.  v.  Credup,  63 

Hovey  v.  State,  119  Ind.  395,  §  3.  Miss.  291,  §  188. 


TABLE    OF   CASES   CITED 


Illinois  Cent.  Rd.  Co.  v.  Illinois,  14(5 

U.  S.  387,  §  56. 
Illinois  Central  Rd.  Co.  v.   Illinois, 

163  U.  S.  142,  §  118. 
Illinois  Central  Rd.  Co.  v.  Interstate 
Commerce  Commission,  206  U.  S. 
441,  §  131. 
Illinois  Cent.  Ry.  Co.  v.  King,   179 

111.  91,  §  317. 
Illinois  Cent.  Ry.  Co.  v.  Martin,  33 

Ky.  L.  Rep.  666,  §  317. 
Illinois  Central  Rd.  v.   McKendree, 

203  U.  S.  514,  §§  59,  99. 
Illinois  Cent.  Ry.  Co.  v.  Reedy,  17 

111.  580,  §  328. 
Illionis  Central  Ry.  Co.  v.  Sheegog, 

215  U.  S.  308,  §§  215,  216. 
Illinois  Steel  Co.  v.  Bilot,  109  Wis. 

418,  §315. 
Illinois  Steel  Co.  v.  Zolnowski,  118 

111.  App.  209,  §  317. 
Imperial  Bldg.  Co.  v.  Chicago  Open 

Board    of    Trade,    238    111.     100, 

§§  246,  247. 
Imperial  Colliery  Co.  v.  Chesapeake 

&  Ohio  Ry.  Co.,  164  Fed.  290,  §  209. 
Imperial  Refining  Co.  v.  Wyman,  38 

Fed.  574,  §  176. 
Indiana,    Bloomington    &    Western 

Ry.  Co.  V.  Burdge,  94  Ind.  46,  §  317. 
Indianapolis  Gas  Co.  v.  Indianapolis, 

82  Fed.  245,  §  208. 
Indian  River  Mfg.  Co.  v.  Wootin,  55 

Fla.  745,  §  236. 
In  re.  See  name. 
Insurance   Co.    v.    Bailey,    13   Wall. 

(80  U.  S.)  616,  §  435. 
Interior  Construction  &  Imp.  Co.  v. 

Bibney,  160  U.  S.  217,  §  201. 
International    Boom    Co.    v.    Rainy 

Lake  River  Boom  Corp.,  97  Minn. 

513,  §  223. 
International  Trust  Co.  v.  Carters- 

ville    Improvement   Co.,    63    Fed. 

341,  §  163. 
Interstate  Commerce  Commission  v. 

Alabama    Midland    Ry.    Co.,    168 

U.  S.  144,  §§  106,  132. 


Interstate  Commerce  Commission  v. 

Baird,  194  U.  S.  25,  §  137. 
Interstate  Commerce  Commission  v. 

Brimson,  154  U.  S.  447,  §  137. 
Interstate  Commerce  Commission  v. 

Chicago  &  Alton  Rd.  Co.,  215  U.  S, 

479,  §  106a. 
Interstate  Commerce  Commission  v. 

Chicago,  Burlington  &  Quincy  Rd. 

Co.,  180  U.  S.  320,  §  35. 
Interstate  Commerce  Commission  v. 

Chicago   Great   Western   Ry.   Co., 

141  Fed.  1003,  §  32. 
Interstate  Commerce  Commission  v. 

Cincinnati,   New  Orleans  &  T.  P. 

Ry.  Co.,  76  Fed.  183,  §  103. 
Interstate  Commerce  Commission  v. 

Cincinnati,   New  Orleans  &  T.  P. 

Ry.  Co.,  64  Fed.  981,  §§  103,  137. 
Interstate  Commerce  Commission  v. 

Cincinnati,  New  Orleans  &  Texas 

Pac.  Ry.  Co.,  167  U.  S.  479,  §  106. 
Interstate  Commerce  Commission  v. 

Clyde  Steamship  Co.,  181  U.  S.  29, 

§40. 
Interstate  Commerce  Commission  v. 

Delaware,  Lackawanna  &  Western 

Ry.  Co.,  216  U.  S.  531,  §  433. 
Interstate  Commerce  Commission  v. 

Detroit,  G.  H.  &  M.  R.  Co.,  167 

U.  S.  633,  §  105. 
Interstate  Commerce  Commission  v. 

East  Tennessee  V.  &  G.  Ry.  Co., 

85  Fed.  107,  §§  106,  144. 
Interstate  Commerce  Commission  v. 

Harriman,  157  Fed.  436,  §  137. 
Interstate  Commerce  Commission  v. 

Illinois  Central  Rd.  Co.,  215  U.  S. 

452,  §§  106a,  131. 
Interstate  Commerce  Commission  v. 

Lake   Shore    &    Michigan   S.    Ry. 

Co.,  134  Fed.  942,  §  106. 
Interstate  Commerce  Commission  v. 

Northeastern  R.  Co.  of  S.  C,  83 

Fed.  611,  §  106. 
Interstate  Commerce  Commission  v. 

Northern  Pac.  Ry.  Co.,  216  U.  S. 

538,  §433. 


lii  TABLE   OF   CASES  CITED 

Interstate  Commerce  Commission  v.  Janeway  v.   Burn,  86  N.  Y.  Supp. 

Philadelphia   &   R.    Ry.   Co.,    123  62.S,  §  270. 

Fed.  969,  §  137.  Jauviin,  Petitioner,   174  Mass.  514, 

Interstate  Commerce  Commission  v.  §  145. 

Reichmann,    145  Fed.   237,    §  104.  Jefferson    County    Savings    Bk.    v. 

Interstate  Commerce  Commission  v.  Eborn,  84  Ala.  529,  §  337. 

Southern  Pac.   Ry.  Co.,   132  Fed.  Jefferson    Davis    County    v.    Jame.s- 

829,  §§  35,  104.  Sumrall  Lumber  Co.  (Miss.,  1909), 

Interstate  Commerce  Commission  v.  49  So.  Oil,  §  129. 

Stickney,  215  U.  S.  98,  §§  35,  49.  Jeffersonville,     Madison     &    Indian- 
Interstate     Commerce     Commission,  apolis  Rd.  Co.  v.  Esterle,  13  Bush 

In  re,  53  Fed.  476,   §  137.  (76  Ky.),  667,  §  332. 

Iron    Mountain    &    Helena    Rd.    v.  Jeffersonville  Rd.  Co.  v.  Rogers,  38 

Johnson,  119  U.  S.  608,  §  316.  Ind.  116,  §  317. 

Iron   Mountain   Bank   v.    Mercantile  Jellenik   v.   Huron   Mining  Co.,    177 

Bank,  4  Mo.  App.  505,  §  336.  U.  S.  1,  §  168. 

Iron  Mountain  Ry.  Co.  v.  Memphis,  Jemison   v.   Citizens'   Sav.   Bk.,    122 

96  Fed.  113,  §  429.  N.  Y.  135,  §  223. 

Iron  Silver   Min.    Co.    v.   Campbell,  Jenson  v.  Toltec  Ranch  Co.,  174  Fed. 

135  U.  S.  286,  §  130.  86,   §  102. 

Irvin  v.  Rushville  Co-operative  Tel.  Jetton  v.  University  of  The  South, 

Co.,  161  Ind.  524,  §  442.  208  U.  S.  489,  §  79. 

Irvine    v.    Marshall,    20    How.    (61  Jewett  Bros.  v.  Chicago,  M.  &  St.  P. 

U.  S.)  558,  §  130.  Ry.  Co.,  156  Fed.  160,  §  209. 

IrvineCo.  V.Bond, 74  Fed.  849,  §194.  Johanson  v.  Washington,   190  U.  S. 

Irwin  V.   Metropolitan  St.   Ry.   Co.,  17,  §  129. 

57  N.  Y.  Supp.  19,  §  89.  John  Hancock  Mut.  L.  Ins.  Co.  v. 

Ivy  V.  Western  Union  Teleg.  Co.,  105  Dick,  114  Mich.  337,  §  435. 

Fed.  371,  §  26.  Johnson     v.     National     Building    & 

Loan  Assoc.,  125  Ala.  465,   §  302. 

,  Johnson  v.  Okerstrom,  70  Minn.  303, 
§246. 

Jackson    v.     American    Teleph.     &  Johnson    v.    Pioneer    Fuel    Co.,    72 

Teleg.  Co.,  139  N.  C.  347,  §  331.  Minn.  405,   §  317. 

Jackson  v.  Fidelity  &  Casualty  Co.,  Johnson  v.  Rightor,  40  La.  Ann.  852, 

75  Fed.  359,  §  195.  §  356. 

Jackson   v.    Newman,    51    La.    Ann.  Johnson  v.   Schulin,   70  Minn.   303, 

833,  §  223.  §  246. 

Jackson   Lumber   Co.    v.    McCreary,  Johnson  v.  Southern  Pac.  Co.,   196 

136  Ala.  278,  §  315.  U.  S.  1,  §  27. 

Jacobs  V.   Columbia   Storage   Ware-  Johnson  v.  St.   Louis  Dispatch  Co., 

house,     105     N.     Y.    Supp.    267,  2  Mo.  App.  565,  §  335. 

§  89.  Johnson    v.   Towsley,    13   Wall.    (SO 

Jacobs,  In  re,  98  N.  Y.  98,  §  8.  U.  S.)  72,  §  129. 

Jacobson  v.  Massachu-setts,  197  U.  S.  Johnston  v.  Guml)el  (Miss.),   19  So. 

11,  §§  7,  58.  100,  §  247. 

James  v.  Fitchburg  R.  Co.,  50  Hun  Johnston    v.    Morris,    72    Fed.    890, 

(N.  Y.),  310,  §  254.  §  129. 


TABLE    OF   CASES   CITED 


liii 


John   V.    Farvvell  Co.   v.   Josephson, 

96  Wis.  10,  §  223. 
Joins,  Ex  parte,  191  U.  S.  93,  §  398. 
Joliet,  The,  v.  Frances,  85  111.  App. 

243,  §  246. 
Jones   V.    Aspen   Hardware   Co.,    21 

Colo.  263,  §  247. 
Jones  V.  Bank  of  Gumming,  131   Ga. 

121,  §381. 
Jones  V.  Johnson,  10  Bash,  649,  §  306. 
Jones  V.  Montagues,   194  U.  8.   147, 

§  398. 
Jones  V.  Oceanic  Steam  Nav.  Co.,  11 

Blatchf.  (U.  S.  C.  C.)    406,  §  205. 
Jones  V.  Sealioard  Air  Line  Rj'.  Co., 

150  N.  C.  473,  §  317. 
Joneshoro    v.    M'Kee,    2    Yerg.    (10 

Tenn.)  167,  §  227. 
Jones,  Ex  parte,  191  U.  S.  93,  §  398. 
Jordan  v.   Alabama  Great  Southern 

Rd.  Co.,  74  Ala.  85,  §  336. 

K 

Kanawha  Dispatch  Line  v.  Fish,  219 

111.  236,  §  247. 
Kane  v.   Chester  Traction   Co.,    186 

Pa.  St.  145,  §  435. 
Kane  v.  Erie  Rd.  Co.,  133  Fed.  681, 

§  26. 
Kansas  v.   Colorado,   206   U.   S.   46, 

§§  3,  4. 
Kansas  City  Suburban  Belt  &  Ry. 

Co.    V.    Herman,    187    U.    S.    63, 

§  215. 
Kansas  Loan  &  Trust  Co.  v.  Electric 

Light  &  Power  Co.,  108  Fed.  702, 

§417. 
Keasbey  &  Mattison  Co.,  In  re,  160 

U.  S.  221,  §§  182,  209. 
Keen  v.  Union  Water  Co.,  52  N.  J. 

Eq.  813,   §  402. 
Keene  v.  Lizardi,  3  La.  273,   §  317. 
Keith   V.    Recorders'    Court,    9   Cal. 

App.  380,  §  397. 
Keller  v.  United  States,   213  U.  S. 

138,  §  58. 
Kelley  v.  Rhodes,  188  U.  S.  1,  §  63. 


Kendall  v.  Klapperthal  Co.,  202  Pa. 

St.  696,  §  224. 
Kendall   v.   United   States,    12   Pet. 

(37  U.  S.)  524,  §§  82,  374. 
Kensington    Electric    Co.    v.    Phila- 
delphia, 187  Pa.  St.  446,  §351. 
Kentucky  Bank  Cases,  174  U.  S.  408, 

§68. 
Kentucky  &  Indiana  Bridge  Co.  v. 

Loui.sville    &    Nashville    Rd.    Co., 

37  Fed.  567,  §§  103,  208. 
Kentucky  Railroad  Tax  Cases  (Cin- 
cinnati, New  Orleans  &  Tex.  Pac. 

Rd.  Co.  V.  Kentucky),  115  U.  S. 

321,  §§  14,  68. 
Keokuk  &   Hamilton   Bridge  Co.   v. 

Illinois,  175  U.  S.  626,  §§  56,  64. 
Keokuk  &  Western  Rd.  Co.  v.  Mis- 
souri, 152  IT.  S.  301,  §§  79,  180. 
Kessler  v.  Ensley  Co.,  123  Fed.  546, 

§§  304,  307. 
Kidd   V.   Alabama,    188   U.   S.   730, 

§77. 
Kidd   V.    New   Hampshire   Traction 

Co.,  72  N.  H.  273,  §§  229,  240. 
Kiernan  v.   New  Jersey  Ice  Co.,  74 

N.  J.  L.   175,   §  317. 
Kilbourn   v.   Thompson,    103   U.   S. 

168,   §  137. 
Kilbourne  v.  Sunderland,  130  U.  S. 

505,  §  163. 
Kilpatrick  v.  Grand  Truiilc      /.  Co., 

74  Vt.  288,  §  26. 
Kilty    V.    Jackson,    184    Mass.    310, 

§  396. 
Kimball  v.  Grantsville  City,  19  Utah, 

36S,  §  3. 
King  V.  Concordia  Fire  Ins.  Co.,  140 

Mich.  258,  §97. 
King  V.    McLean  Asylum   of   Mass. 

Gen'l  Hosp.,  64  Fed.  325,  §  137. 
King  V.  Sioux  City  Loan  &  Im.  Co., 

76  Iowa,  11,  §339. 
King    V.    West    Virginia    &    Spruce, 

Coal    &    Lumber   Co.,    216    U.    S. 

92,  §  158. 
Kingsbury  v.  Nye,  9  Cal.  App.  574, 

§3. 


liv 


TABLE    OF   CASES    CITED 


Kingston  v.  Kingston,  P.  &  C.  Elec. 

R.  Co.,  28  Ont.  Rep.  399,  §§  369, 

437. 
Kinney,  In  re,  102  Fed.  4GS,  §  137. 
Kirby   v.   American   Soda   Fountain 

Co.,  194  U.  S.  141,  §  203. 
Kirkman  v.  Carlstadt  Chemical  Co., 

74  N.  Y.  Supp.  865,  §  441. 
Kirkpatrick   v.    Bessalo,    116    Mich. 

657,  §  281. 
Kirwan  v.   Murphy,    189   U.  S.   35, 

§129. 
Kisseberth  v.  Prescott,  91  Fed.  611, 

§  286. 
Kittel  V.  Augusta,  T.  &  G.  R.  Co. 

(U.  S.  C.  C),  78  Fed.  855,  §  254. 
Kittredge   v.    Race,    92   U.   S.    116, 

§239. 
Knapp    V.    Golden   Cross   Soc,    121 

Tenn.  212,  §  301. 
Knapp  V.   Lake  Shore  &  Michigan 

Southern  Ry.  Co.,  197  U.  S.  536, 

§374. 
Kneeland   v.   American   Loan   &  T. 

Co.,  136  U.  S.  89,  §§  416,  417. 
Knevals    v.    Florida   Central    &   Pe- 
ninsula   Rd.    Co.,    66    Fed.    224, 

§170. 
Knight  V.  United  States  Land  Assoc, 

142  U.  S.  161,  §  129. 
Knight  V.  West  Jersey  Rd.  Co.,  108 

Pa.  St.  250,  §  188. 
Knights    Templars'   &    Masons'   Life 

Ins.  Co.  V.  Jarman,  187  U.  S.  197, 

§§  17,  49. 
Knoop  V.  Bohmrich,  49  N.  J.  Eq.  82, 

§  303. 
Knox  County  Mut.  Ins.  Co.  v.  Bower- 
son,  6  Ohio  C.  C.  275,  §  181. 
Knoxville,    City    of,    v.    Knoxville 

Water  Co.,  212  U.  S.  1,  §§  32,  36, 

37,  147. 
Knoxville  Iron  Co.  v.  Harbison,  183 

U.  S.  13,  §  27. 
Koenigsberger    v.    Richmond    Silver 

Mining  Co.,  158  U.  S.  41,  §  184. 
Konold  V.  Rio  Grande  Western  Ry. 

Co.,  16  Utah,  151,  §  91. 


Kramer    v.    Northwestern    Elevator 

Co.,  91  Minn.  346,  §  340. 
Kreider  v.  Cole,  149  Fed.  647,  §  195. 
Kreigh     v.     Westinghouse,     Church, 

Kerr  &  Co.,  214  U.  S.  249,  §  202. 
Krulder    v.    Ellison,    47    N.    Y.    36, 

§  243. 
Krulwitz    V.    Eastern    Rd.    Co.,    140 

Mass.  573,  §  317. 
Kurtz  V.  Paola  Town  Co.,  20  Kan. 

397,  §  240. 


La  Abra  Silver  Mining  Co.  v.  United 

States,  175  U.  S.  423,  §  137. 
Laclede   Gas   Light  Co.   v.   Murphy, 

170  U.  S.  78,  §  357. 
Lafflin  &  Rand  Powder  Co.  v.  Sin- 

sheimer,  46  Md.  315,   §  246. 
Lake  County  Commissioners  v.  Dud- 
ley, 173  U.S.  243,  §§  191,  194. 
Lake  Shore  &  Michigan  Ry.  Co.  v. 

Smith,  173  U.  S.  684,  §§23,  118. 
Lake    Shore    &    Michigan    Southern 

Ry.  Co.  v.  Ohio,   173  U.  S.  285, 

§§  26,  46,  50,  56,  58,  118. 
Lake  Shore  &  Mich.  Southern  R.  R. 

Co.   v.   Prentice,    147,   U.   S.    101, 

§444. 
Lamar  v.  Allison,  101  Ga.  270,  §  307. 
Lamb   v.   Davenport,    18   Wall.    (85 

U.  S.)  307,  §  129. 
La  Moine  Lumber  Co.  v.  Kesterson 

(U.  S.  C.  C),  171  Fed.  980,  §§  19, 

20,  44,  198. 
Lamphere  v.  Grand  Lodge  Ancient 

Order    of    U.    W.,   47    Mich.    429, 

§§351,  361. 
Land  &  R.  Imp.  Co.  v.  Bardon,  45 

Fed.  706,  §  181. 
Lander    v.    Mercantile    Bank,     186 

U.S.  458,  §71. 
Landers  V.  Staten  Island  R.  Co.,  53 

N.  Y.  450,  §  89. 
Lang  V.  Lutz,  82  N.  Y.  Supp.  319, 

§  278. 
Lanigan  v.  North,  69  Ark.  62,  §  286. 


TABLE    OF   CASES   CITED 


Iv 


Laredo  Imp.   Co.   v.   Stevenson,   66 

Fed.  636,  §  247. 
Lamed    v.    Beal,    65    N.    H.    184, 

§  245. 
Latham  v.   Northern  Pac.  Ry.  Co., 

45  Fed.  721,  §  423. 
Lathrop  v.  American  Emigrant  Co., 

41  Iowa,  547,  §  315. 
Lathrop,    Shea   &    Hcnwood   Co.   v. 

Interior  Construction  &  Imp.  Co., 

215  U.  S.  246,  §  213. 
Latimer  v.  Citizens'  State  Bank,  102 

Iowa,  162,  §  286. 
Lattimer   v.    Mosaic    Glass    Co.,    13 

Ohio  C.  C.  163,  §  247. 
Lawrence  v.  Weber,  65  Misc.  (N.  Y.) 

603,  §§  287,  303,  424. 
Lawson  v.  Genesee  Farmers'  Alliance 

Joint  Stock  Co.  (Idaho,  1895),  43 

Pac.  191,  §  314. 
Lawson  v.  United  States  Mining  Co., 

207  U.  S.  1,  §  404. 
Lawton  v.  Steele,    152   U.  S.    133, 

§58. 
Lea  V.  Iron  Belt  Mercantile  Co.,  119 

Ala.  27,  §§  294,  297. 
Lear  v.  S.  K.  Paige  Lumber  &  M. 

Co.  (Tenn.  Ch.  App.),  42  S.  W.  808, 

§436. 
Leavell  v.  Western  Union  Teleg.  Co., 

116  N.  C.  211,  §§  122,  140. 
Leavenworth   v.   Chicago,   Rock   Is- 
land &  Pac.  Ry.  Co.,   134  U.  S. 

688,  §226. 
Leavenworth    County    Comm'rs    v. 

Miller,  7  Kan.  479,  §  3. 
Lebenskeger  v.  Schofield,   139  Fed. 

384,  §  203. 
Lee  v.  Atlantic  Coast  Line  R.  Co., 

150  Fed.  775,  §  178. 
Lee  V.  Johnson,  116  U.  S.  48,  §  129. 
Lees  v.  Atchison  &  N.  R.  Co.,  24 

Neb.  143,  §  223. 
Leggett  V.  New  Jersey  Manufactur- 
ing &  Banking  Co.,   1  N.  J.  Eq. 

541,  §§  223,  227. 
Lehigh  Mining  &  Mfg.  Co.  v.  Kelly, 

160  U.  S.  327,  §§  194,  195. 


Lehigh   Mining  &   Mfg.   Co.,   In  re, 

156  U.  S.  322,  §§  194,  195. 
Lehigh  Valley  R.  R.  Co.  v.  Pennsyl- 
vania, 145  U.  S.  192,   §  62. 
Leigh  V.  American  Brake-Beam  Co., 

205  111.  147,  §  321. 
Leisy  v.  Hardin,  135  U.  S.  100,  §§  11, 

51,  53,  58. 
Leonardsville    Bank   v.    Willard,    25 

N.  Y.  574,  §  246. 
Leovy  v.  United  States,   177  U.  S. 

621,  §  56. 
Lesch  v.   Great   Northern  Ry.  Co., 

93  Minn.  435,  §  317. 
Levee  Inspectors  of  Chicot  County, 

Board   of,   v.   Crittenden,  94  Fed. 

614,  §  177. 
Level  Land  Co.  v.  Hayward,  95  Wis. 

109,  §  289. 
Lewis  V.  Equitable  Mtge.  Co.,  94  Ga. 

572,  §339. 
Lewis  V.  Glenn,  84  Va.  947,  §  290. 
Lewis  V.  Maysville  &  Big  Sandy  Rd. 

Co.,  25  Ky.  L.  Rep.  948,  §  224. 
Lewis,    Appeal   of,    67  Pa.   St.    153, 

§.3. 
Lewis  Pub.  Co.  v.  Wyman,  168  Fed. 

756,  §428. 
Lewisohn  v.  Stoddard,  78  Conn.  575, 

§§  266,  290,  308. 
Lexington    &    Eastern    Ry.    Co.    v. 

Lyons,  104  Ky.  23,  §  319. 
Leyden    v.    Brooklyn    Heights    Rd. 

Co.,  106  N.  Y.  Supp.  769,  §  89. 
Libbey  v.   Hodgdon,   9   N.   H.   394, 

§227. 
License  Cases,   5  How.    (46   U.   S.) 

504,  §§44,  51. 
License  Tax  Cases,  5  Wall.  (72  U.  S.) 

462,  §  44. 
Licking  Rolling  Mill  Co.  v.  Fischer, 

8  Ky.  L.  Rep.  89,  §  317. 
Life  Ins.  Co.  v.  Bangs,  103  U.  S.  780, 

§435. 
Likins's   Petition.  223  Pa.    St.   456, 

§3. 
Lima  Ry.  Co.  v.  Little,  67  Ohio  St. 

91,  §  317. 


Ivi 


TABLE   OF  CASES   CITED 


Lincoln  Butter  Co.  v.  The  Edwards- 
Bradford    Lumber    Co.,    76    Neb. 

477,  §§  240,  248. 
Lincoln  Capital  Nat.  Bank  v.  First 

Nat.  Bank  Cadiz,   172  U.  S.  425, 

§209. 
Lincoln    Park    Chapter,    R.    A.    M. 

No.  177,  V.  Swatek,  105  111.  App. 

604,  204  111.  228,  §§  246,  247,  383. 
Linden  Land  Co.  v.  Milwaukee  Elec- 
tric  Ry.    &   Light  Co.,    107   Wis. 

493,  §§  242,  258,  334. 
Lindsay    v.     First    Nat.     Bank    of 

Shreveport,  156  U.  S.  485,  §  435. 
Lindsay  &  Phelps  Co.  v.  Mullen,  176 

U.  S.  126,  §§  59,  93. 
Lindsey  v.  Hawes,  2  Black  (67  U.  S.), 

554,  §  130. 
Linehan  Ry.  &  Transfer  Co.  v.  Len- 

dergrass,  70  Fed.  2,  §  123. 
Linne  v.  Bredes,  43  Wash.  540,  §  373. 
Lionberger    v.    Rouse,    9    Wall.    (76 

U.  S.)  468,  §  71. 
Lipscomb  v.  Citizens'  Bank  of  Ga- 
lena, 66  Kan.  243,  §  319. 
Litchfield  v.  Register  &  Receiver,  9 

Wall.  (76  U.  S.)  575,  §  130. 
Littlefield  v.  Fitchburg  Rd.  Co.,  158 

Mass.  1,  §  114. 
Little  Rock  &  M.  Rd.  Co.  v.  East 

Tenn.,   Va.    &   Ga.    Rd.   Co.,    159 

U.  S.  698,  §  159. 
Little  Rock  Trust  Co.  v.  Southern 

Missouri  A.  R.  Co.,    19  Mo.  669, 

§416. 
Liverpool  Ins.  Co.  v.  Massachusetts, 

10  Wall.  (77  U.  S.)  566,  §§  16,  175. 
Livingston  Loan  &  Bldg.   Assoc,  v. 

Drummond,  49  Neb.  200,  §  247. 
Lloyd   V.   Dollison,    194   U.   S.   445, 

§§3,  51. 
Lloyd  V.  Haugh  &  Keenan  Storage 

&  Transfer  Co.,  223  Pa.  St.   148, 

§243. 
Loehner   v.    New   York,    198   U.    S. 

45,  §  12. 
Loewe   v.    Lawlor,    208   U.    S.    274, 

§457. 


Logan  County   Bank  v.  Townsend, 

139  U.  S.  67,  §  162. 
Long   Island   Water  Supply  Co.   v. 

Brooklyn,    166   U.   S.   685,    §§  18, 

127. 
Lookout  Mountain  Iron  Co.  v.  Lea, 

144  Ala.  169,  §  332. 
Loomis    v.    Missouri    Pac.    Ry.    Co., 

165  Mo.  469,  §  305. 
Lord  V.  Lehigh  Valley  Rd.  Co.,  104 

Fed.  929,  §  218. 
Los    Angeles    v.    Los    Angeles    City 

Water  Co.,  177  U.  S.  558,  §§  37, 

95. 
Los  Angeles  Holiness  Band  v.  Spires, 

126  Cal.  541,  §  247. 
Lottawanna,  The,  21  Wall.  (88  U.  S.) 

558,  §  44. 
Lottery  Case,  188  U.  S.  321,  §  55. 
Loughran   v.   Railroad   Commission- 
ers, 158  U.  S.  421,  §  154. 
Louisiana  v.  New  Orleans  Gas  Light 

&  Banking  Co.,  2  Rob.  (La.)  529, 

§388. 
Louisiana  v.  Texas,  176  U.  S.  1,  §  58. 
Louisiana,  A.  &  M.  R.  Co.  v.  Tensas 

Basin    Levee    Dist.    Commrs.,    87 

Fed.  594,  §  256. 
Louisiana  Nat.  Bank  v.  Henderson, 

116  La.  413,  §§  246,  247. 
Louisiana    Railroad    Commission    v. 

Cumberland  Teleg.  Co.,  212  U.  S. 

414,   §36. 
Louisville  v.  Bank  of  Louisville,  174 

U.  S.  439,  §  93. 
Louisville  &  Jeffersonville  Ferry  Co. 

V.  Kentucky,  ISS  U.  S.  385,  §  78. 
Louisville    &    Nashville   Rd.    Co.    v. 

Behlmer,  175  U.  S.  648,  §  41. 
Louisville   &    Nashville   Rd.    Co.    v. 

Brinkerhoff  &  Co.,   119  Ala.  528, 

§319. 
Louisville    &    Nashville   Rd.    Co.    v. 

Central  Stock  Yards  Co.,  212  U.  S. 

132,  §§4,  5,  23. 
Louisville   &    Nashville   Rd.    Co.    v. 

Commonwealth,   104  Ky.   L.  Rep. 

1380,  §  150. 


TABLE   OF  CASES   CITED 


Ivii 


Louisville   &   Nashville   Rd.    (Jo.    v. 

Eubank,  184  U.  S.  27,  §§41,43,115. 
Louisville    &    Nashville   Rd.   Co.    v. 

F.  W.  Cook  Brewing  Co.,  172  Fed. 

117,  §§  51,  136. 
Louisville   &   Nashville   Rd.   Co.    v. 

Gillen,  106  Ind.  321,  §  317. 
Louisville   &    Nashville   Rd.    Co.    v. 

Hine,  121  Ala.  234,  §  319. 
Louisville   &    Nashville   Rd.   Co.    v. 

Kentucky,   161   U.  S.  677,    §§  10, 

21,  58. 
Louisville   &    Nashville   Rd.   Co.    v. 

Kentucky,   183  U.  S.   503,   §§21, 

32,  41. 
Louisville   &    Nashville   Rd.   Co.    v. 

Motley,  211  U.  S.  149,  §§  201,  206. 
Louisville   &    Nashville    Rd.    ('o.    v. 

Palmes,  109  U.  S.  244,  §  79. 
Louisville   &    Nashville   Rd.   Co.    v. 

Spinks,  104  Ga.  692,  §  319. 
Louisville   &    Nashville   Rd.    Co.    v. 

Wathen,  22  Ky.  L.  Rep.  82,  §  319. 
Louisville   &    Nashville   Rd.   Co.    v. 

West    Coast    Naval    Stores,     198 

U.  S.  483,  §  421. 
Louisville,   Cincinnati   &  Charleston 

Rd.   Co.   V.    Letson,    2   How.    (43 

U.  S.)  497,  §  181. 
Louisville  E.  &  St.  Louis  R.  Co.  v. 

Wilson,  138  U.  S.  501,  §  417. 
Louisville  Home  Telep.  Co.  v.  City  of 

Louisville,    130   Ky.    611,    §§342, 

345,  376,  381. 
Louisville,    N.   A.   &    C.    R.    Co.   v. 

Boney,  117  Ind.  501,  §254. 
Louisville,   New  Albany  &  Chicago 

Ry.  Co.   V.   Louisville  Trust  Co., 

174  U.  S.  552,  §§  162,  180. 
Louisville,    New   Alliany  &  Chicago 

Ry.  Co.  V.  Palmer,  13  Ind.  App. 

161,  §  317. 
Louisville  Public  Warehouse  Co.  v. 

Collector  of  Customs,  49  Fed.  561, 

§160. 
Louisville  Trust  v.  Louisville,  Nash- 
ville, A.  &  C.  R.  Co.  (U.  S.  C.  C. 

A.),  84  Fed.  539,  §  247. 


Love  V.  Flahive,  205  U.  S.  1!)5,  §  129. 
Lovings  V.   Norfolk  &   Western  Ry. 

Co.,  47  W.  Va.  582,  §  319. 
Low  V.  Crown  Point  Mining  Co.,  2 

Nev.  75,  §  397. 
Low  V.  Rees  Printing  Co.,  41  Neb. 

127,  §  18. 
Lowry  v.  Inman,  46  N.  Y.  119,  §  284. 
Lozier  v.  Gas,  Electric  Light  &  Power 

Co.,  69  N.  Y.  Supp.  247,  §  441. 
Ludwig  V.  Western  Union  Teleg.  Co., 

216  U.  S.  146,  §§  250,  430. 
Lumberman's  Ins.  Co.  v.  Meyer,  197 

U.  S.  407,  §  181. 
Luxton  V.  North  River  Bridge  Co., 

153  U.  S.  525,  §  56. 
Lyman  v.  United  States  Bank  (1851), 

12  How.  (53  U.  S.)  225,  §  257. 
Lynch,  Ex  parte,  16  S.  C.  32,  §  3. 
Lytle  V.  Crescent  News  &  Hotel  Co., 

27  Tex.  Civ.  App.  530,  §  317. 
Lytle  V.  Kansas,  22  How.  (63  U.  S.) 

193,  §  130. 

M 

Mac.     See  Mc. 

Mace  V.  Ashland  Coal  &  Iron  Ry. 

Co.,  118  Ky.  885,  §  317. 
Mack  V.  De  Bardeleben  Coal  &  Iron 

Co.,  90  Ala.  396,  §§  302,  305. 
Mackay  v.  New  York,  New  Haven  & 

Hartford  R.  R.  Co.,  82  Conn.  73, 

§246. 
Macon,   D.   &  S.   R.  Co.   v.  Shailer 

(U.   S.   C.   C.    A.),    141   Fed.   585, 

§310. 
Macon  Grocery  Co.  v.  Atlantic  Coast 

Line  Co.,  215  U.  S.  501,  §  209. 
Macon  Grocery  Co.  v.  Atlantic  Coast 

Line  Rd.  Co.,  163  Fed.  736,  §§  106, 

134,  151. 
Madison  v.  Madison  Gas  &  Electric 

Co.,  129  Wis.  120,  249,  §§  121,  404. 
Madisonville  Traction   Co.   v.   Saint 

Bernard  Min.  Co.,  196  U.  S.  239, 

§§  127,  172,  198,  207,  219,  220. 
Magoun  v.  Illinois  Trust  &  Sav.  Bk., 

170  U.  S.  283,  §  14. 


Iviii  TABLE    OF   CASES   CITED 

Main   v.    Northeastern   Rd.   Co.,    12  Marstaller  v.  Ogden  Mills,  143  N.  Y. 

Rich.  L.  (S.  C.)  82,  §  330.  398,  §  240. 

Maine  v.  Grand  Trunk  Ry.  Co.,  142  Martin  v.  Baltimore  &  Ohio  Ry.  Co., 

U.  S.  217,  §§  61,  62.  151  U.  S.  673,  §  179. 

Malecek   v.   Tower   Grove,    etc.,    R.  Martin  v.  Diotz,  102  Cal.  55,  §§  245, 

Co.,  57  Mo.  17,  §  317.  414. 

Manchester    v.    Massachusetts,    139  Martin  v.   Minnekahta  State  Bank, 

U.  S.  240,  §  44.  7  S.  D.  263,  §  323. 

Manchester  F.  Assur.  Co.  v.  Stockton  Martin   v.   Pittsburgh   &   Lake   Erie 

Combined     Harvester     &     Agric.  Rd.  Co.,  203  U.  S.  284,  §§  29,  319. 

Works,  38  Fed.  378,  §  163.  Maryland    Tube    &    Iron    Works    v. 

Manchester  Fire  Ins.  Co.  v.  Herriott,  West  End  Imp.  Co.,  87  Md.  207, 

91  Fed.  711,   §  128.  §§  247,  405. 

Manhattan  Trust  Co.  v.  Seattle  Coal  Mason   v.    Pewabic,    133    U.   S.    50, 

&  Iron  Co.,  10  Wash.  499,  §  294.  §  201. 

Manigault  v.  Springs,  198  U.  S.  473,  Mason  v.   Pewabic  Mining  Co.,    153 

§§  9,  10.  U.  S.  361,   §  159. 

Manning  v.   San   Antonio  Club,   63  Mason  v.  Stevens,   16  S.  Dak.  320, 

Tex.  166,  §361.  §246. 

Manship  v.  New  South  Bldg.  &  Loan  Matter  of.     See  name. 

Assoc,  110  Fed.  845,  §  247.  Matthews  v.  Bank  of  Allendale,  60 

Mansion    House    Assoc,    on    Ry.    &  S.  C.  183,  §  268. 

Canal  Traffic,  etc.,  v.  London  &  Matthews  v.   Board  of  Corporation 

Northwestern  Ry.   Co.,   9   Ry.   &  Commrs.   of  N.  C,  97  Fed.  400, 

Can.  Traf.  Cas.  174,  §  113.  §  114. 

Manufacturers'  Nat.  Bank  of  Chicago  Matthews    v.    McClaughry,    S3    111. 

v.  Baack,  S  Blatchf.  (U.  S.  C.  C.)  App.  224,  §  441. 

137,  §  205.  Mawhinney  v.  Bliss,   124  App.  Div. 

March  v.   Railroad,   40  N.   H.   548,  609,  §§  229,  253. 

§  229.  Maynard  v.  Fireman's  Fund  Ins.  Co., 

Marchand  Cent.  Ry.  Co.  v.  Goodman,  34  Cal.  48,  §§  317,  335. 

20  Tex.  Civ.  App.  109,  §  319.  Mayo  v.   Western  Union  Teleg.  Co., 

March-Davis     Cycle     Mfg.     Co.     v.  112  N.  C.  343,  §§  122,  140. 

Strobridge  L.  Co.,  79  111.  App.  683,  Maxwell  v.  Central  District  &  Print- 

§  182.  ing  Teleg.    Co.,    51    W.    Va.    121, 

Market  Street  R.  Co.  v.  Hellman,  109  §  242. 

Cal.  571,  §  180.  McArthur  v.  Times  Printing  Co.,  48 

Marquez  v.  Frisbie,   101  U.  S.  473,  Minn.  319,  §  259. 

§  129.  M'Cabe  v.   Illinois  Central  Rd.  Co., 

Marrion    Bond    Co.   v.   Rubber  Co.,  13  Fed.  827,  §  224. 

160  Ind.  558,  §  387.  McAneny    v.    Superior    Court,     150 

Marsh    v.    Astoria    Lodge,    27    111.  Cal.  6,  §  397. 

(Peck.)  421,  §  227.  McCann  v.  Gerding,  60  N.  Y.  Supp. 

Marsh    v.    Mathias,    19   Utah,    350,  467,  §89. 

§246.  McCarthy,  Ex   parte,    29   Cal.    395, 

Marshall,    Field    &    Co.    v.    Evans,  §  3. 

Johnson,  Sloan  &  Co.,   106  Minn.  McCaulley,  The,  S.  A.,  99  Fed.  302, 

85,  §  277.  §  198. 


TABLE    OF   CASES   CITED 


lix 


McChord  v.  Louisville  &  N.  R.  Co., 

183  U.  S.  4S3,  §§113,  151. 
McClaine  v.  Rankin,  197  U.  S.   154, 

§§  282,  284. 
McClcUan  v.  Chipman,  1G4  U.  S.  347, 

§§  65,  66,  77. 
McClendon  v.  Equitable  Mtgc.  Co., 

122  Ala.  384,  §  315. 
McClosky  V.  Miller,  72  Pa.  St.  151, 

§321. 
McConey  v.  Belton  Oil  &  Gas  Co.,  97 

Minn.  190,  §  311. 
McCormick    v.    Market    Bank,    165 

U.  S.  538,  §  247. 
McCoy  V.  Gas  Engine  &  Power  Co., 

135  App.  Div.  (N.  Y.)  771,  §§  302, 

306. 
McCoy  V.  State,  2  Marv.  (Del.)  543, 

§§342,  381. 
McCrary   v.    Beandry,   67   Cal.    120, 

§  348. 
McCray  v.  United  States,  195  U.  S. 

27,  §  4. 
McCready  v.  Thomas,  9  Serg.  &  R. 

(Pa.)  94,  §  329. 
McCuUoch   V.    Maryland,    4    Wheat. 

(17  U.  S.)  316,  §§  2,  69. 
McDaniel  v.  Gate  City  Gaslight  Co., 

79  Ga.  58,  §  251. 
McDermott    v.    American    Brewing 

Co.,  105  La.  124,  §  317. 
McDonald  v.  Thompson,   184  U.  S. 

71,  §  284. 
McDonnell  v.  Buffalo  Loan,  Trust  & 

Safe  Deposit  Co.,  193  N.Y.  92,  §  340. 
McDougall   V.   Travis,   24   Hun    (N. 

Y.),  590,  §  341. 
McDowall  V.  Sheehan,  129  N.  Y.  200, 

§261. 
McEntee  v.  Kingston  Water  Co.,  165 

N.  Y.  27,  §  373. 
McFadden   v.    Ross,    108   Ind.    512, 

§341. 
McGraw,  In  re,  v.  CorneH  University, 

10  N.  Y.  Supp.  495,  §  223. 
McGuire   v.    Chicago,    Burlington    & 

Quincy    R.    Co.,    131    Iowa,    340, 

§§  3,  6,  12,  13,  14,  26,  46. 


Mclnnerly    v.    City    of    Denver,    17 

Colo.  302,  §  397. 
McKeon    v.    Chicago,    Milwaukee    & 

St.  Paul  Ry.Co.,94  Wis.  477,  §319. 
McKim    V.    Odom,    3    Bland's    Ch. 

(Md.)  407,  421,  §§  227,  327. 
McKinlay  v.   Morrish,   21   How.   (62 

U.  S.)  343,  §  244. 
McKittrick   v.    Arkansas   Cent.    Ry. 

Co.,  152  U.  S.  473,  §  419. 
McKusick  V.  Seymour,  Sabin  &  Co., 

48  Minn.  158,  §  282. 
McLean  v.  Denver  &  Rio  Grande  Rd. 

Co.,  203  U.  S.  38,  §§  5,  9,  43,  44,  59. 
McLeary   v.   Dawson,   87   Tex.    524, 

§  247. 
McMaken  v.  Cincinnati  &  H.  Elec. 

St.  R.  Co.,  5  Ohio  N.  P.  367,  §  242. 
McMastcr  v.  Drew,  70  N.  J.  Eq.  6, 

§  298. 
McMaster  v.  lUinois  Cent.  Rd.  Co.,  65 

Miss.  764,  §  188. 
McMichacl  v.  Murphy,  197  U.  S.  304, 

§  129. 
McMurtry   v.    Kentucky   Cent.    Rd. 

Co.,  84  Ky.  462,  §  319. 
McNeill    V.    Southern    Railway   Co., 

202  U.  S.  543,  §§  47,  119,  155,  421. 
McRea  v.  Bank  of  Alabama,  19  How. 

(60  U.  S.)  376,  §  257. 
Mechanics'  Bank  v.  Seton,  1  Pet.  (26 

U.  S.)  299,  §  229. 
Mecke  v.  Valley  Town  Mineral  Co., 

89  Fed.  114,  §  201. 
Meeker   v.    Lehigh   Valley   Rd.   Co., 

162  Fed.  354,  §  134. 
Meisse  v.   Loren,  6  Ohio  Dec.  258, 

§413. 
Mellen    v.     Moline    Malleable    Iron 

Works,  131  U.  S.  352,  §  168. 
Memphis   &   Charleston   Rd.   Co.   v. 

Alabama,  107  U.  S.  581,  §  178. 
Memphis  &  L.  R.  Co.  v.  Dow,  120 

U.  S.  287,  §  420. 
Memphis  Cotton  Oil  Co.  v.   Illinois 

Cent.  Ry.  Co.,  164  Fed.  290,  §  209. 
Mercantile   Trust   Co.   v.   Columbus, 

203  U.  S.  311,  §  208. 


Ix 


TABLE   OF   CASES   CMTED 


Mercer  v.  Park  City  Mineral  Water 

Co.,  18  Ky.  L.  Rep.  985,  §  2'J3. 
Merchants'     &     Mechanics'     Savings 

Bank  v.   Belington  Coal  &  Coke 

Co.,  51  W.  Va.  UO,  §  295. 
Merchants'  Heat  &  L.  Co.  v.  Clow  & 

Lens,  204  U.  S.  286,  §  218. 
Merchants'  National  Bank  v.  Stone, 

38  Mich.  779,  §  240. 
Merchants'  National  Bank  v.  United 

States,  214  U.  S.  33,  §  00. 
Merrill    v.    Prescott,    07    Kan.    707, 

§295. 
Merritt   v.    Ehrman,    110   Ala.    278, 

§163. 
Methodist    E.    Church    v.    Wood,    5 

Ohio,  283,  §  321. 
Metropolitan    Life   Ins.    Co.    v.    Mc- 

Nall,  81  Fed.  888,  §  128. 
Metropolitan  National  Bank  v.  Clag- 

gett,  141  U.  S.  520,  §  208. 
Metropolitan  Rd.  Co.  v.  District  of 

Columbia,  132  U.  S.  1,  §  321. 
Metropolitan   Railway   Receivership, 

In  re,  208  U.  S. 90,  §§  105,  172,  194. 
Metropolitan  Saloon  Omnibus  Co.  v. 

Hawkins,    4    Hurl.    &    Norm.    87, 

§335. 
Metropolitan    St.    Ry.    Co.    v.    New 

York  State   Board   Tax  Commrs., 

199  U.  S.  1,  §§  23,  07,  08,  79. 
Metropolitan  Trust  Co.   v.   Railroad 

Equipment    Co.,     108    Fed.    913, 

§417. 
Meyer  v.  Bristol  Hotel  Co.,  163  Mo. 

59,  §  275. 
Meyer    v.    Johnston,    53    Ala.    237, 

§  223. 
Mexican  Central  Ry.  Co.  v.  Eckman, 

187  U.  S.  429,  §§157,  185. 
Mexican  Cent.  Ry.  Co.  v.  Pinkney, 

149  U.  S.  194,  §§  173,  201. 
Mexican  Railroad  Co.  v.  Davidson, 

157  U.  S.  201,  §  189. 
Miami   Exporting  Co.    v.   Gano,    13 

Ohio,  269,  §  240. 
Michigan  Central  R.  Co.  v.  McNaugh- 

ton,  45  Mich.  87,  §  315. 


Michigan  Central  11.  Co.  v.  Powers, 

201   U.  S.  245,   §  94. 
Michigan  Ins.   Bank  v.   Eldred,   143 

U.  S.  293,  §  232. 
Michigan    Land    &    Lumber   Co.    v. 

Rust,  108  U.  S.  589,  §§129,  130. 
Middle  Branch  Mut.  Telephone  Co.  v. 

Jones,  137  Iowa,  390,  §§  240,  248. 
Milford  V.  Bangor  Railway  &  Elec- 
tric Co.,  104  Me.  233,  §  333. 
Millar    v.    Ferris    Irrig.    District,    85 

Fed.  093,   §  247. 
Miller  v.  Brooklyn  Heights  Co.,  Ill 

N.  Y.  Supp.  47,  §  89. 
Miller  v.   Higginbotham,   29   Ky.   L. 

Rep.  547,  §§  288,  300. 
Miller   v.   Le   Mars   Nat.   Bank,    116 

Fed.  551,  §  213. 
Miller    v.     Murphy,     17    Colo.    408, 

§§  200,  302,  303,  305,  310. 
Miller  v.  New  York,   109  U.  S.  385, 

§  50. 
Miller  &  Lux,  Incorp'd,  v.  East  Side 

Canal  &  Irrigation  Co.,  211  U.  S. 

293,  §§  194,  195. 
Millon  &  Askam  Hematic  Iron  Co.  v. 

Furness  Ry.,  12  Ry.  &  Can.  Traff. 

Cas.  1,  §  113. 
Mills  v.  United  States  Printing  Co., 

99  App.  Div.  005,  §  200. 
Milwaukee  v.  Koeffler,  110  U.  S.  219, 

§  123. 
Milwaukee  Cold  Storage  Co.  v.  Dex- 
ter, 99  Wis.  414,  §  339. 
Milwaukee   Trust    Co.    v.    Germania 

Ins.  Co.,  100  La.  0()9,  §  223. 
Miners'  Bank  v.  Iowa,  12  How.  (53 

U.  S.)  1,  §§  3,  5. 
Minford  v.  Old  Dominion  Steamship 

Co.,  48  Fed.  1,  §  181. 
Minneapolis  &  St.  Louis  Ry.  Co.  v. 

Beckwith,  129  U.  S.  20,  §§  9,  14, 

30. 
Minneapolis  &  St.  Louis  Ry.  Co.  v. 

Emmons,  149  U.  S.  304,  §  21. 
Minneapolis  &  St.  Louis  Ry.  Co.  v. 

Gardner,    177   U.   S.   332,    §§  180, 

282. 


TABLE    OF   CASES    CITED 


Ixi 


Minneapolis  &  8t.  Loui.s  Hy.  Co.  v. 

Hcrrick,  127  U.  S.  210,  §  2(5. 
Minneapolis   &  St.   Louis  R.   Co.   v. 

Minnesota,    l.SG  U.  S.   257,    §§  34, 

113,  150. 
Minneapolis  &  St.  Louis  Ry.  Co.  v. 

Minnesota  ex  lel.,    193   U.  S.   53, 

§§  21,  23,  120. 
Minneapolis,   St.   Paul   &  Sault  Ste. 

Marie  Ry.   Co.   v.   Railroad  Com- 
mission,  136  Wis.   146,   §  3. 
Minnesota    v.     Bachelder,     1     Wall. 

(68  U.  S.)  10!),  §  129. 
Minnesota  v.  Barber,  136  U.  S.  313, 

§58. 
Minnesota    v.    Duluth    Iron    Range 

Rd.,  87  Fed.  497,   §  208. 
Minnesota  v.  Northern  Securities  Co., 

194    U.   S.    48,    §§  186,    200,    206, 

207. 
Minnesota     v.     Northern     Securities 

Co.,  184  U.  S.  199,  §§  166,  404. 
Missionary    Society    v.    Dallas,    107 

U.  S.  336,  §  129. 
Mississippi    &    Missouri    Ry.    Co.    v. 

Ward,    2   Black    (67    U.   S.),   485, 

§§  229,  431,  432. 
Mississippi   Railroad   Commission   v. 

Rlinois  Central  Rd.  Co.,  203  U.  S. 

335,  §§  50,  112,  lis,  140,  155. 
Missouri,  Kansas  &  Texas  Ry.  Co.  v. 

Haber,  169  U.  S.  613,  §  58. 
Missouri,  Kansas  &  Texas  Ry.  Co.  v. 

Interstate  Commerce  Commission, 

164  Fed.  645,  §§  34,  36,  106,  132. 
Missouri,  Kansas  &  Texas  Ry.  Co.  v. 

May,  194  U.  S.  267,  §  13. 
Missouri,   Kansas   &  Texas   Ry.  Co. 

V.    Missouri    Railroad    Warehouse 

Comm'rs,    183    U.    S..  53,    §§  155, 

206,  221. 
Missouri,  Kansas  &  Texas  Ry.  Co.  v. 

Simonson,  64  Kan.  802,  §  14. 
Missouri,  Kansas  &  Texas  Ry.  Co.  v. 

State  Okla.   (1909),   103  Pac.  613, 

§§  120,  141. 
Missouri    Pac.    Ry.    Co.    v.    Humes, 

115  U.S.  512,  §9. 


Missouri    Pac.    Ry.    ('o.    v.    Larabee 

Flour    Mills   Co.,    211    U.    S.   612, 

§44. 
Missouri    Pac.    Ry.    Co.   v.   Mackey, 

127  U.  S.  205,  §§  14,  26. 
Missouri  River  Power  Co.  v.  Steele, 

32  Mont.  433,  §  3. 
Missouri    Savings    &    Loan    Co.    v. 

Rice,  84  Fed.  131,  §  319. 
Mitchell  V.  .Jenkins,  5  B.  &  Ad.  588, 

§  336. 
Mitchell  V.  Mitchell,  107  N.  Y.  Supp. 

671,  §4. 
Mitchell  V.   St.   Andrews   Bay  Land 

Co.,  4  Fla.  200,  §  325. 
Mobile,  County  of,  v.   Kimball,   102 

U.S.  ()91,  §44. 
Mobile,  Jackson  &  Kansas  City  Rd. 

Co.  V.  Mississippi,  210  U.  S.   187, 

§§  107,  140. 
Modlin  V.   Roanoke  Ry.   &   Naviga- 
tion Co.,  145  N.  C.  218,  §  339. 
Moffatt    Commission    Co.    v.    Union 

Pacific  Ry.  Co.,  113  Mo.  App.  544, 

§  319. 
Moffett,  H.  &  C.  Co.  v.  Rochester,  82 

J^ed.  255,   §  163. 
Moir  v.   Provident  Sav.   Life  Assur. 

Soc,  112  N.  Y.  Supp.  57,  §  422. 
Monongahela    Bridge    Co.    v.    Pitts- 
burg &  Birmingham  Traction  Co., 

196  Pa.  St.  25,  §§  224,  247. 
Monongahela  Bridge  v.  United  States, 

216  U.  S.  177,  §  443. 
Monongahela    City    v.    Monongahela 

Elec.  L.  Co.,  12  Pa.  Co.  Ct.  Rep. 

529,    §  345. 
Monongahela    Nav.    Co.    v.    United 

States,  148  U.  S.  312,  §  36. 
Monroe   Cattle   Co.    v.    Becker,    147 

U.  S.  47,  §  130. 
Montague  &  Co.  v.  Lowry,  193  U.  S. 

39,  §  457. 
Montana    Nat.    Bank    v.    Merchants' 

Nat.  Bank,  19  Mont.  586,  §  402. 
Montana     Ore     Purchasing     Co.     v. 

Boston  &  M.  C.  C.  &  S.  Min.  Co.,  85 

Fed.  867,  §  209. 


Ixii 


TABLE    OF   CASES    CITED 


Montello,  The,   11  Wall.   (78  U.  S.) 

411,  §  56. 
Montgomery   v.   Louisville   &   Nash- 
ville Ry.  Co.,  84  Ala.  127,  §  426. 
Montgomery  v.  Portland,   190  U.  S. 

89,  §  443. 
Montgomery  Branch   Bank  v.   Par- 

rish,  20  Ala.  433,  §  319. 
Montgomery  Gas  Light  Co.  v.  Mont- 
gomery &  E.  R.  Co.,  86  Ala.  372, 

§242. 
Montreal     River     Lumber     Co.     v. 

Muhills,  80  Wis.  540,  §  339. 
Moore    v.    Bell,  Attorney   Genl.,  95 

Tex.  151,  §377. 
Moore   v.   McNutt,  41    W.  Va.  695, 

§  167. 
Moore  v.  Robbins,  96  U.  S.  530,  §  129. 
Moore  &  Handley  Hardware  Co.  v. 

Towers  Hardware  Co.,  87  Ala.  206, 

§259. 
Moore,  In  re,  209  U.  S.  490,  §§  201, 

202. 
Moran    v.   Rockland,  Thomaston    & 

Camden  St.  Ry.  Co.,  99  Me.  127, 

§317. 
Moran    v.    Sturgis,    154    U.   S.    256, 

§  239. 
Morgan  v.  Davis,  27  Fla.  531,  §  309. 
Morgan  v.  Louisiana,  93  U.  S.  217, 

§79. 
Morgan's  Louisiana  &  Texas  Rd.  & 

Steamship   Co.   v.    Railroad   Com- 
mission, 109  La.  247,  §  139. 
Morgan's  Steamship  Co.  v.  Louisiana 

Board  of  Health,   118  U.  S.  455, 

§§7,  26,  44,  58. 
Morrill  v.  Little  Falls  Manufacturing 

Co.,  46  Minn.  260,  §  301. 
Morris  Run  Coal  Co.  v.  Barclay  Coal 

Co.,  68  Pa.  St.  173,  §  432. 
Morrison    v.    Gold    Mountain    Gold 

Min.  Co.,  52  Cal.  306,  §  340. 
Morrison,  In  re,  147  U.  S.  14,  §  374. 
Morton    v.    Metropolitan    Life    Ins. 

Co.,  34  Hun  (N.  Y.),  366,  §  336. 
Moses    V.    Tompkins,    84    Ala.    613, 

§302. 


Moss  V.  Barham,  94  Va.  12,  §  399. 
Mott  V.  Consumers'  Ice  Co.,  73  N.  Y. 

543,  §  317. 
Mowe    V.    Garden,    5    How.    Prac. 

(N.  Y.)  243,  §  91. 
Muehlenbeck  v.  Babylon  &  N.  S.  R. 

Co.,  55  N.  Y.  Supp.  1023,  §  246. 
Mullan  v.  United  States,  118  U.S. 

271,  §  130. 
Munday  v.  Vail,   34   N.  J.   L.  418, 

§156. 
Munn  V.  lUinois,  94  U.  S.  113,  §§  33, 

40,  43,  56,  421. 
Munson  v.  S.  G.  &  C.  R.  R.  Co.,  103 

N.  Y.  58,  §  271. 
Murphy  v.  Wheatley,  102  Md.  501, 

§288. 
Murray  v.  Chicago  &  N.  W.  R.  Co., 

92  Fed.  868,  §  209. 
Murray    v.    Menefee,    20    Ark.    561, 

§402. 
Murray  v.  Superior  Court,  129  Cal. 

628,  §  399. 
Murray  v.  Wilson  Distilling  Co.,  213 

U.  S.  151,  §§  155,  200,  437. 
Murray  Hill  Bank,  In  re,  43  N.  Y. 

Supp.  836,  §  81. 
Muse    V.    Arlington    Hotel   Co.,    168 

U.  S.  430,  §  315. 
Musick  V.  Kansas  City,  Springfield  & 

Memphis   Ry.   Co.,    114   Mo.   309, 

§81. 
Mussen  v.  Au  Sable  Granite  Works, 

18  N.  Y.  Supp.  267,  §  84. 
Myers  v.  Sierra  Valley  S.  &  A.  Assoc, 

122  Cal.  669,  §  163. 

N 

Nash  v.  Fries,  129  Wis.  120,  §  121. 
Nash  v.   Minnesota  Title  Ins.   &  T. 

Co.,  163  Mass.  574,  §  339. 
Nashua  &  Lowell  Ry.  Co.  v.  Boston 

&  Lowell  Rd.  Co.,  136  U.  S.  356, 

§  180. 
Nashville,  Chattanooga  &  St.  Louis 

Rd.  Co.  V.  Alabama,  128  U.  S.  96, 

§§  23,  26,  27. 


TABLE    OF   CASES   CITED 


Ixiii 


Nashville,  Chattanooga  &  St.  Louis 

Ry.  Co.  V.  Parker,   123  Ala.  6S3, 

§  31<J. 
Nashville,  C.  &  St.  L.  Ry.  v.  Taylor, 

86  Fed.  1C8,  §§  SI,  208. 
National  Bank  v.  Case,  99  U.  S.  268, 

§277. 
National    Bank    v.    Commonwealth, 

y  Wall.  (76  U.  S.)  353,  §§  66,  70, 

73,  77. 
National  Bank  v.  Ivimball,  103  U.  S. 

732,  §  123. 
National   Bank   of    Auburn  v.    Dil- 
lingham, 147  N.  Y.  603,  §  307. 
National     Bank     of     Commerce     v. 

Allen,  90  Fed.  545,  §  163. 
National  Cotton   Oil  Co.   v.  Texas, 

197  U.  S.  115,  §432. 
National  Exchange  Bank  of  Balti- 
more  v.    Peters,    144   U.   S.    570, 

§  159. 
National  Exchange  Co.  v.  Drew,  2 

Macq.  103,  §  336. 
National  Fertilizer  Co.  v.  Fall  River 

Five  Cent  Sav.  Bk.,  196  Mass.  458, 

§236. 
National    Hollow   Brake    B.    Co.    v. 

Chicago  Ry.  Equip.  Co.,  168  Fed. 

666,  §  422. 
National  Life  Ins.   Co.  v.   National 

Life  Ins.  Co.,  209  U.  S.  317,  §  428. 
National    N.    &   M.   V.   Co.    v.    Mc- 

Brayer,     15    Ky.    L.    Rep.    399, 

§397. 
National  Park  Bank  v.  Peavey,  64 

Fed.  912,  §  163. 
National  Surety  Co.  v.  State  Bank, 

120  Fed.  593,  §§  163,  198,423. 
National  Tradesmen's  Bank  v.  Wet- 
more,  124  N.  Y.  241,  §  411. 
National   Tube   Works   Co.    v.    Gil- 

fiUan,  124  N.  Y.  302,  §  287. 
Nebraska  v.  The  Fremont,  etc.,  Ry. 

Co.,  22  Neb.  313,  §  155. 
Nebraska,  Ex  parte,  209  U.  S.  436, 

§346. 
Nebraska  Loan  &  Trust  Co.  v.  Ig- 

nowski,  54  Neb.  398,  §  412. 


Nebraska  Nat.  Bank  v.  Ferguson,  49 

Neb.  109,  §  247. 
Nebraska  Telep.  Co.  v.  State  ex  rel. 

Yeiser,  55  x\eb.  627,  §§  349,  365. 
Negley   v.    Hagerstown    Mfg.    M.    & 

L.  Imp.  Co.,  88  Md.  692,  §  436. 
Nelson  v.   Great  Northern  Ry.  Co., 

28  Mont.  297,  §  319. 
Nelson  Business  College  Co.  v.  Lloyd, 

60  Ohio  St.  44S,  §  317. 
Neuchatel  Asphalt  Co.  v.  Mayor  of 

New  York,  155  N.  Y.  373,  §  236. 
Neun    V.    Blackstone    Bldg.    &    L. 

Assoc,  149  Mo.  74,  §  285. 
New  Albany  Water  Works  v.  Louis- 
ville Bkg.  Co.,  122  Fed.  776,  §  223. 
Newberry  Land  Co.  v.  Newiicrry,  95 

Va.  Ill,  §§259,  321,  325. 
New   Brunswick   &   Canada    Ry.    v. 

Conybeare,  9  H..L.  Cas.  711,  §  336. 
Newburgh  Turnpike  Co.  v.  Miller,  5 

Johns.  Ch.  101,  §  431. 
Newburyport    Water    Co.    v.    New- 

buryport,  193  U.  S.  561,  §  95. 
New  England  R.  Co.  v.  Central  R.  & 

E.  Co.,  69  Conn.  47,  §  404. 
New  Hampshire  Sav.  Bank  v.  Richey 

(U.  S.  C.  C.  A.),  121  Fed.  956,  §307. 
New  Haven  Railroad  Co.   v.   Inter- 
state  Comm.    Comm.,    200   U.   S. 

361,  §  49. 
New  Mexico,   Rio  Grande   &  P.   R. 

Co.  V.  Crouch,  4  N.  M.  141,  §  315. 
New  Mexico  v.  United  States  Trust 

Co.,  174  U.  S.  545,  §  79. 
New  Orleans  v.  Houston,  119  U.  S. 

265,  §  77. 
New  Orleans  v.  Paine,  147  U.  S.  261, 

§§  129,  428. 
New  Orleans  v.  Paine,  51  Fed.  838, 

§130. 
New  Orleans  v.  Quinlan,  173  U.  S. 

191,  §  191. 
New    Orleans    &    Northeastern    Rd. 

Co.  V.  Shackelford,  87  Miss.  610, 

§314. 
New   Orleans   Canal   &   Bki;;.   Co.   v. 

Montgomery,  95  U.  S.  16,  §  412. 


Ixiv  TABLE    OF   CASES   CITED 

New    Orleans    Debenture    Redemp-  New  York  Dry  Docks  v.  Hicks,  5 

tion  Co.   V.   Louisiana,    ISO  U.   S.  McLean,  111,  §  173. 

320,  §§  246,  251.  New    York    Independent   Telephone 

New  Orleans  Gas  Co.  v.  Louisiana  Co.,  Matter  of,  133  App.  Div.  635, 

Light  Co.,  145  U.  S.  650,  §  22.  §  96. 

New     Orleans     Gas     Light    Co.     v.  New  York  Life  Ins.  Co.  v.  Cravens, 

Louisiana,  L.  &  H.  P.  Mfg.  Co.,  178  U.  S.  379,  §  55. 

115  U.  S.  650,  §§8,  47,  58.  New  York  Life  Ins.  Co.  v.  McMaster, 

New     Orleans,     Jackson     &     Great  87  Fed.  63,  §  412. 

Northern  Rd.  Co.  v.  Wallace,  50  New  York,  New  Haven  &  Hfd.  Rd. 

Miss.  244,  §  188.  Co.  v.   Bridgeport  Tract.  Co.,  65 

New  Orleans  Pac.  Ry.  Co.  v.  Parker,  Conn.  410,  §  426. 

143  U.  S.  42,  §  416.  New  York,  New  Haven  &  Hartford 

New   Orleans    Water   Works  Co.   v.  Rd.  Co.  v.  Fair  Haven  &  W.  R. 

Louisiana,  185  U.S.  33,  §§386,  388.  Co.,  70  Conn.  610,  §  426. 

New  York  v.  Miln,  11  Pet.  (36  U.  S.)  New  York,  New  Haven  &  Hfd.  Rd. 

102,  §§  7,  18,  56,  61.  Co.  v.  Horgan,  25  R.  I.  408,  §  315. 

New   York   v.    Roberts,    171    U.   S.  New  York,  New  Haven  &  Hartford 

658,  §§  16,  19,  20,  58,  77.  Rd.   Co.   v.   Interstate  Commerce 

New  York  v.  Squire,  145  U.  S.  175,  Commission,  200  U.  S.  361,  §§  44, 

§§  31,  92.  47. 

New  York  &  New  England  Ry.  Co.  v.  New  York,  New  Haven  &  Hartford 

Bristol,  151  U.  S.  556,  §§  14,  21,  Rd.  Co.  v.  New  York,  165  U.  S. 

22,  24,  107.  628,  §§  7,  47. 

New  York  &  New  England  Ry.  Co.  New  York,  New  Haven  &  Hartford 

V.  Woodruff,  153  U.  S.  689,  §§  14,  Rd.  Co.'s  Appeal,  SO  Conn.  623, 

21,  24.  §§  5,  96,  139. 

New  York  &  Porto  Rico  Steamship  Nicket    v.    St.    Louis,    Memphis    & 

Co.,  In  re,  155  U.  S.  523,  §  396.  Southern  Rd.  Co.,   135  Mo.  App. 

New  York  &  Sharon  Canal  Co.   v.  661,  §  334. 

Fulton    Bank,    7   Wend.    (N.    Y.)  Niles  v.  New  York  Central  &  H.  R. 

412,  §  323.  Rd.  Co.,  71  N.  Y.  Supp.  271,  §  274. 

New    York,    Bridgeport    &    Eastern  Niles,    City   of,    v.    Benton    Harbor, 

Ry.  Co.   V.  Motil,  81   Conn.  466,  St.  Joe  Ry.  &  Light  Co.,  154  Mich. 

§§  239,  246.  378,  §  247. 

New  York  Cent.  &  Hudson  River  Rd.  Niles  Tool  Works  v.  Louisville,  N.  A. 

Co.  V.  Miller,  202  U.  S.  584,  §§  23,  &  C.   Ry.  Co.,  112  Fed.  561,  §  417. 

76.  Nimick  &  Co.  v.  Mingo  Iron  Works 

New  York  Cent.    &  Hudson   River  Co.,  25  W.  Va.  184,  §  284. 

Rd.  Co.  v.  United  States,  212  U.  S.  Noble  v.  Union  River  Logging  Co., 

481,  §§  444,  451,  452,  456,  457.  147  U.  S.  165,  §  130. 

New  York  City  v.   New  York  City  Noonan  v.  Delaware  L.  &  W.  R.  Co., 

Ry.  Co.,  132  App.  Div.  156,  §  96.  68  Fed.  1,  §  201. 

New  York  City  &  Northern  Ry.  Co.  Norfolk    &    Portsmouth    Belt    Line 

v.  Central  Union  Tel.  Co.,  21  Hun  Rd.    Co.    v.    Commonwealth,    103 

(N.  Y.),  261,  §  427.  Va.  289,  §  112. 

New   York,    City    of,    v.    Pine,    185  Norfolk  &  W.  R.  Co.  v.  Pendleton, 

U.  S.  93,  §  315.  156  U.  S.  667,  §  419. 


TABLE   OF  CASES  CITED 


Ixv 


Norfolk  &  W.  R(l.  Co.  v.  Piiiniicle 
Coal  Co.,  44  W.  Va.  574,  §  399. 

Norfolk,  City  of,  v.  Board  of  Trade  & 
Business  Men's  Assoc.  (Va.,  1909), 
63  S.  E.  987,  §  3. 

North  Bloomfield  Gravel  Mining  Co. 
V.  Keyser,  58  Cal.  315,  §  81. 

North  British  &  M.  Ins,  Co.  v. 
Latrop,  63  Fed.  508,  §  163. 

Northeastern  Ry.  Co.  v.  North  Brit- 
ish Ry.  Co.,  10  Ry.  &  Can.  Traffic 
Cases,  82,  §  141. 

Northern  Indiana  Rd.  Co.  v.  Mich- 
igan Cent.  Rd.,  5  McLean,  444, 
§  229. 

Northern  Indiana  Rd.  Co.  v.  Mich- 
igan Cent.  Rd.  Co.,  15  How.  (56 
U.  S.)  233,  §  422. 

Northern  Pac.  Co.  v.  Amato,  49  Fed. 
881,  §  160. 

Northern  Pac.  Ry.  Co.  v.  Cannon,  46 
Fed.  237,  §  315. 

Northern  Pacific  Ry.  Co.  v.  Clark, 
153  U.  S.  252,  §  123. 

Northern  Pacific  Ry.  Co.  v.  Duluth, 
208  U.  S.  583,  §§  7,  22,  25. 

Northern  Pac.  Ry.  Co.  v.  Dustin, 
142  U.  S.  492,  §§  251,  345. 

Northern  Pacific  Ry.  Co.  v.  Mc- 
Cormick,  94  Fed.  932,  §  129. 

Northern  Pac.  Ry.  Co.  v.  Miller, 
20  Wash.  21,  §  315. 

Northern  Pac.  Ry.  Co.  v.  North  Da- 
kota, 216  U.  S.  579,  §  425. 

Northern  Pac.  Ry.  Co.  v.  Pacific 
Coast  Lumber  Mfg.  Assn.,  165  Fed. 
1,  §§  187,  209. 

Northern  Pac.  Ry.  Co.  v.  Smith,  171 
U.  S.  260,  §  315. 

Northern  Pac.  Ry.  Co.  v.  Washing- 
ton Territory,  142  U.  S.  492,  §  353. 

Northern  Pac.  Ry.  Co.  v.  Whalen, 
149  U.  S.  157,  §  432. 

Northern  Securities  Co.  v.  United 
States,  193  U.  S.  197,  §§  44,  137. 

North  Jersey  St.  Ry.  Co.  v.  South 
Orange,  58  N.  J.  Eq.  83,  §§  406, 
429. 


North    Point    Consol.    Trrig.    Co.    v 

Utah  &  S.  L.  Canal  Co.,  16  Utah, 

246,  §  223. 
North  Shore  Boom  &  Driving  Co.  v. 

Nicomen  Boom  C(J.,  52  Wash.  564, 

§§341,   443,   445. 
Northwestern  L.  Assoc,  v.  Stout,  32 

111.  App.  31,  §  181. 
Northwestern  Life  Ins.  Co.  v.  Riggs, 

203  U.  S.  243,  §  17. 
Northwestern  Rd.  Co.  v.  Hack,  66 

III.  238,  §  317. 
Norwalk    Street    Ry.    Co.'s    Appeal, 

69  Conn.  576,  §  5. 
Norwich  Gas  &  Electric  Co.  v.  Nor- 
wich, 76  Conn.  565,  §  102. 
Norwood  V.  Baker,   172  U.  S.  269, 

§123. 

O 

Ober  V.  Gallagher,  93  U.  S.  206, 
§189. 

Oceanic  Steamship  Nav.  Co.  v. 
Stranahan,  214  U.  S.  320,  §§  4,  18, 
58,  100. 

Ohio  &  Mississippi  Rd.  Co.  v.  Wheel- 
er, 1  Black  (66  U.  S.),  286,  §§  173. 
174,  178. 

Ohio  Cent.  Rd.  Co.  v.  Central  Trust 
Co.  of  N.  Y.,  133  U.  S.  83,  §  418. 

Ohio,  State  of  (ex  rel.  Walton  v. 
Herman),  63  Ohio  St.  440,  §  95. 

Olathe,  City  of,  v.  Missouri  &  Kan- 
sas Interurban  Ry.  Co.,  78  Kan. 
193,  §§  386,  391,  392. 

Old  Colony  Trust  Co.  v.  Allentown  & 
B.  Rapid  Transit  Co.,  192  Pa.  St. 
596,  §  415. 

Old  Colony  Trust  Co.  v.  Dubuque 
Light  &  T.  Co.  (U.  S.  C.  C),  89 
Fed.  794,  §  259. 

Old  Colony  Trust  Co.  v.  Wichita,  123 
Fed.  762,  §  247. 

Old  Dominion  Copper  Mining  & 
Smelting  Co.  v.  Bigelow,  188  Mass. 
315,  §  259. 

Old  Dominion  Steamship  Co.  v.  Vir- 
ginia, 198  U.S.  299,  §61. 


E 


Ixvi 


TABLE    OF   CASES   CITED 


Olds  Wagon  Works  v.  Bei>edict,  67 

P'ed.  1,  §  200. 
Oliver  v.   Liverpool   &   London  Life 

&  Fire  Ins.  Co.,  100  Mass.  531,  §  16, 

175. 
Olyphant    Sewage-Drainage    Co.    v. 

Borough    of    Olj'phant,    5    Lack. 

Leg.  N.  346,  §  247. 
Omaha  Hotel  Co.  v.  Wade,  97  U.  S. 

14,  §416. 
0'i\eil    V.    American    Fire    Ins.    Co., 

166  Pa.  St.  72,  §  97. 
Opperman  v.  Citizens'  Bank  of  Mich- 
igan  City    (Ind.    App.,    1909),    85 

N.  E.  990,  §  341. 
Oregon  v.  Hitchcock,  202  U.  S.  60, 

§130. 
Oregon  Rd.  Comm'rs  v.  Oregon  Rd. 

&   Nav.   Co.,    17   Ore.   65,    §§  111, 

115,  150. 
Oregon   Ry.   &    Nav.   Co.   v.   Orego- 

nian  Ry.  Co.,  130  U.  S.  1,  §  223. 
O'Reilly  v.  Greene,  41  N.  Y.  Supp. 

1056,  §  240. 
Orient  Ins.  Co.  v.  Daggs,  172  U.  S. 

557,  §§  14,  16,  17,  19,  30. 
Oroville  &  Virginia  Rd.  Co.  v.  Plumas 

County,  37  Cal.  354,  §  245. 
Orr  V.  Bank  of  LTnited  States,  1  Ham. 

(1  Ohio)  28,  §  328. 
Osborn  v.  Oakland,  49  Neb.  340,  §  383. 
Osborn  v.  San  Diego  Land  &  Town 

Co.,  178  U.  S.  22,  §§  95,  143. 
Osborn   v.    United   States    Bank,    9 

Wheat.  (22  U.  S.)  738,  §§  71,  155, 

211,  250,  257.  429. 
O'Shea,  In  re,  166  Fed.  180,  §  137. 
Otis  V.  Parker,  187  U.  S.  606,  §  12. 
Otoe  County  Fair  &  Driving  Park 

Assoc.  V.  Doman,  1  Neb.  179,  §  247. 
Ouachita  Packet  Co.  v.  Aiken,   121 

U.  S.  444,  §  34. 
Overland  Cotton  Mill  Co.  v.  People, 

32  Colo.  263,  §  449. 
Overseers  of  Poor  of  North  White- 
hall Twp.  V.  Overseers  of  Poor  of 

South  Whitehall  Twp.,  3  Serg.  & 

R.  (Pa.)  117,  §  321. 


Owens  V.  Yazoo,  Mississippi  Delta 
Levee  Rd.,  74  Miss.  269,   §  315. 

Owensboro  v.  Owensboro  Water 
Works  Co.,  191  U.  S.  358,  §  37. 

Owensboro,  City  of,  v.  Westing- 
house,  Church,  Kerr  &  Co.,  165 
Fed.  385,  §  320. 

Owensboro  Nat.  Bank  v.  Owensboro, 
173  U.  S.  664,  §  71. 

Owensboro  Wagon  Co.  v.  BUss,  132 
Ala.  253,  §§  246,  247. 

Owsley  V.  Montgomery  &  West 
Point  Rd.  Co.,  37  Ala.  568,  §§  331, 
336. 

Ozan  Lumber  Co.  v.  Union  County 
Bank,  207  U.  S.  251,  §§  6,  18. 


Pabst  Brewing  Co.  v.  Crenshaw,  198 

U.  S.  17,  §§  54,  59. 
Pacific  Express  Co.   v.   Seibert,    142 

U.  S.  339,  §§  14,  21,  78. 
Pacific  Iron  &  Steel  Works  v.  Goerig 

(Wash.,  1909),  104  Pac.  151,  §  227. 
Pacific  Postal  Teleg.  Co.  v.  Western 

Union  Teleg.  Co.,  50  Fed.  493,  §  427. 
Pacific     Railroad     v.     McGuire,     20 

Wall.  (87  U.  S.)  36,  §  23. 
Padros    v.    Swarzenbach,    134    App. 

Div.  (N.  Y.)  811,  §  308. 
Palatine  Ins.  Co.,  Ltd.,  of  Manches- 
ter, Eng.,  V.  Santa  Fe  Mercantile 

Co.    (N.   M.,   1905),   82   Pac.    363. 

§  247. 
Palos  Coal   &  Coke  Co.   v.   Benson 

(mem.),  145  Ala.  664,  §317. 
Parker  v.  Fort  Worth  &  D.  C.  R. 

Co.,  71  Tex.  132,  §  315. 
Parks    V.    Railway    Co.    (Tex.    Civ. 

App.),  30  S.  W.  70S,  §  243. 
Parks  V.  West  (Tex.,   1908),   111  S. 

W.  726,  §  247. 
Parrill  v.  Pittsburg,  Cincinnati,  Chi- 
cago &  St.  Louis  Ry.  Co.,  23  Ind. 

App.  638,  §  319. 
Parrott  v.  Bridgeport,  44  Conn.  180, 

§348. 


TABLE   OF   CASER   CITED 


Ixvii 


Parsons  v.   Eureka  Powder  Works, 

48  N.  H.  66,  §  239. 
Parsons  v.  Tuolumne  County  Water 

Co.,  5  Cal.  43,  §  87. 
Parsons  v.  Venzke,  164  U.  S.  89,  §  130. 
Passage  v.  Dansville  &  Mt.   N.   R. 

Co.,  58  N.  Y.  Supp.  770,  §  415. 
Passenger  Cases,  7  How.  (48  U.  S.) 

283,  §§  44,  61. 
Patch  V.  Wabash  Ry.  Co.,  207  U.  S. 

277,  §§  174,  178,  179. 
Pate    (State  ex   rel.    Board   of   Rd. 

Comm'rs)  v.  Wilmington  &  Wel- 

don  Rd.  Co.,  122  N.  C.  877,  §§  112, 

140. 
Patterson  v.  Kentucky,  97  U.  S.  501, 

§7. 
Patterson    v.    Northern    Trust    Co., 

230  111.  341,  §  247. 
Pattison  v.  Gulf  Bag  Co.,   116  La. 

963,  §  247. 
Paul  V.  Virginia,  8  Wall.  (75  U.  S.) 

168,  §§  16,  55. 
Pauly  V.  Pauly,  107  Cal.  8,  §  226. 
Pauly  V.  State  Loan  &  T.  Co.,  165 

U.  S.  606,  §  277. 
P.,  C,  C.  &  St.  L.  R.  R.  Co.  V.  Dodd, 

24  Ky.  Law  Rep.  2057,  §  306. 
Peabody    Gold    Min.    Co.    v.    Gold 

Min.  Co.,  97  Fed.  657,  §  209. 
Peik  V.  Chicago  &  Northwestern  Ry., 

94  U.S.  164,  §§40,43. 
Penabic  Min.  Co.,  66  Fed.  396,  §  269. 
Pendleton  v.  Kinsley,  3  Cliff.  (U.  S. 

C.  C.)  416,  §  317. 
Peninsular    Trading    &    F.    Co.    v. 

Pacific   Steam   Whaling   Co.,    123 

Cal.  689,  §  413. 
Penn  v.  Calhoun,  121  U.  S.  251,  §  418. 
Penn  Collieries  C!o.  v.  McKeever,  183 

N.  Y.  98,  §  17. 
Pennock  v.  Coe,  23  How.  (64  U.  S.) 

117,  §417. 
Pennoyer  v.  McConnaughy,  140  U.  S. 

1,  §  155. 
Penn  Refining  Co.  v.  Western  New 

York  &  Penn  Rd.  Co.,  208  U.  S. 

208,  §§32,  35,  105. 


Pennsylvania  v.  Quicksilver  Co.,  10 

Wall.  (77  U.  S.)  553,  §  186. 
Pennsylvania  v.  Wheeling  &  Belmont 

Bridge   Co.,    18   How.    (59   U.   S.) 

421,  460,  §§44,  56,  402. 
Pennsylvania    v.     Wheeling     Bridge 

Co.,  13  How.  (54  U.  S.)  518,  §§  4(J„V 

404,  409. 
Pennsylvania    Co.    v.    Waddle,    100 

Ind.  138,  §  336. 
Pennsylvania  Company,   In  re,    137 

U.  S.  451,  §  374. 
Pennsylvania  Ins.  Co.  v.  Franklin  F. 

Ins.  Co.,  181  Pa.  St.  40,  §  436. 
Pennsylvania  Rd.  Co.  v.  Hughes,  191 

U.  S.  477,  §§  29,  199. 
Pennsylvania  Rd.  Co.  v.  Knight,  192 

U.S.  21,  §§47,48. 
Pennsylvania  R.  Co.  t.  Montgomery 

Pass.  Ry.  Co.,  167  Pa.  St.  62,  §  242. 
Pennsylvania  Rd.  Co.  v.  St.  Louis, 

Alton  &  Terre  Haute  Ry.  Co.,  118 

U.  S.  290,  §  179. 
Pennsylvania  Teleph.  Co.,  Matter  of 

Taxation,  48  N.  J.  91,  §  427. 
Pensacola    Teleg.    Co.    v.     Western 

Union  Teleg.  Co.,  96  U.  S.  1,  §§  2, 

46. 
People  v.  Bellett,  99  Mich,  151,  §  13. 
People    (ex    rel.    Cecil)    v.    Bellevue 

Hospital,    60   Hun    (N.    Y.),   107, 

§355. 
People  V.  Board  of  Railroad  Commrs., 

175  N.  Y.  516,  §  142. 
People  (ex  rel.  Linton)  v.  Brooklyn 

Heights  Rd.   Co.,    172   N.   Y.   90, 

§  154. 
People  (ex  rel.  Lord)  v.  Bruennemer, 

168  111.  482,  §  382. 
People  (ex  rel.  Tiffany)  v.  Campbell, 

144  N.  Y.  166,  §  223. 
People  (ex  rel.  Oneida  Teleph.  Co.)  v. 

Central  New  York  Teleph.  &  Teleg. 

Co.,  58  N.  Y.  Supp.  221,  §  371. 
People  V.  Chicago  &  A.  R.  Co.,  130 

111.  175,  §  353. 
People  V.  Chicago  Telephone  Co.,  220 

111.  238,  §  386. 


Ixviii 


TABLE   OF   CASES   CITED 


People  V.  Delaware  &  H.  Canal  Co., 

52  N.  Y.  Supp.  850,  §  108. 
People  V.  Detroit  White  Lead  Works, 

82  Mich.  471,  §  447. 
People  V.  Duke,  19  Misc.  Rep.  292, 

§432. 
People  (ex  rel.)  v.  Dulaney,  96  111. 

503,  §  355. 
People  V.  Equitable  Life  Assur.  Soc, 

109  N.  Y.  Supp.  53,   §§  261,  262, 

264. 
People  V.  Flagg,  46  N.  Y.  401,  §  3. 
People  (ex  rel.  Rhodes)  v.  Fleming, 

10  Colo.  553,  §  3. 
People  V.  Gilson,  109  U.  S.  389,  §  8. 
People  V.  Goff,  98  N.  Y.  Supp.  66, 

557,  §399. 
People  V.  Grand  Trunk  Ry.  Co.,  232 

111.  292,  §  92. 
People  V.  Hall,  80  N.  Y.  117,  §  384. 
People  V.  Hawkins,  47  N.  Y.  Supp. 

56,  §8: 
People  V.  Heidelberg  Garden  Co.,  233 

111.  290,  §  393. 
People  (ex  rel.   Postal  Teleg.  Cable 

Co.)  V.  Hudson  River  Teleph.  Co., 

10  N.  Y.  St.  Rep.  2S2,  §  371. 
People  V.  Illinois  Cent.  Rd.  Co.,  233 

111.  378,  §§  223,  403. 
People  (ex  rel.   Lehmaier)   v.  Inter- 
urban   Ry.   Co.,    117    N.    Y.    296, 

§§  344,  376. 
People  V.  Knickerbocker  Trust  Co., 

77  N.  Y.  Supp.  1000,  §  441. 
People   V.   Linda   Vista   Irrig.   Dist., 

128  Cal.  477,  §  247. 
People  V.  Manhattan  Gas  Light  Co., 

45  Barb.  (N.  Y.)  136,  §  373. 
People  V.  Medical  Society  of  E.  N., 

24  Barb.  (N.  Y.)  570,  §  361. 
People    V.    Michigan    Sanitarium    & 

Benev.  Soc,  151  Mich.  452,  §§  383, 

393. 
People    (ex    rel.    Mt.    Vernon   Trust 

Co.)  V.  Millard,  127  App.  Div.  77, 

§381. 
People  V.  Murphy,  113  N.  Y.  Supp. 

855,  §9. 


People  V.  Murray  Hill  Bank,  In  re, 

43  N.  Y.  Supp.  836,  §  81. 
People  (ex  rel.  Frost)  v.  New  York 

Cent.  &  Hudson  R.  Rd.  Co.,   168 

N.  Y.  187,  §§  350,  381. 
People  V.  New  York,  Lake  Erie  & 

Western  Rd.  Co.,   104  N.  Y.  58, 

§§  154,  353. 
People  (ex  rel.  Brush)  v.  New  York 

Suburban    Water   Co.,    56    N.    Y. 

Supp.  364,  §  365. 
People  V.  Nichols,  79  N.  Y.  582,  §  397. 
People  (ex  rel.  Bacon)   v.   Northern 

Cent.  Rd.  Co.,  164  N.  Y.  2,  §§  374, 

375,  376. 
People  V.  North  River  Refining  Co., 

3  N.  Y.  Supp.  40,  401,  §  224. 
People  V.   North  River  Sugar  Ref. 

Co.,  22  Abb.  N.  C.  16,  §  432. 
People  V.  Oakland  Water  Front  Co., 

118  Cal.  234,  §  251. 
People  V.  O'Brien,  111  N.  Y.  1,  §  36. 
People  (ex  rel.  Levenson)  v.  O'Don- 

nel,  99  App.  Div.  253,  §  381. 
People  (ex  rel.  Bath  &  Hammonds- 
port  Rd.   Co.)    V.    Public   Service 

Commission  et  al.,  127  App.  Div. 

480,  §  142. 
People  (ex  rel.  New  York  Central  & 

Hudson  River  Rd.  Co.)  v.  Pubhc 

Service    Commission,    195    N.    Y. 

157,  §  142. 
People  (ex  rel.  Town  of  West  Seneca) 

V.  Public  Service  Conamission,  130 

App.  Div.  335,  §  121. 
People  (Moloney)  v.  Pullman's  Pal- 
ace Car  Co.,  175  111.  125,  §  223. 
People  (ex  rel.  Coughran)  v.  Railroad 

Commissioners,    158    N.    Y.    421, 

§154. 
People  (ex  rel.  Attorney-General)  v. 

Reis,  76  Cal.  269,  §  379. 
People  (ex  rel.  Municipal  Gas  Co.)  v. 

Rice,  138  N.  Y.  151,  §  358. 
People   v.    Rochester   Ry.    &    Light 

Co.,  195  N.  Y.  102,  §§444,  450. 
People  V.  Rome,  W.  &  O.  Rd.  Co., 

103  N.  Y.  106,  §  345. 


TABLE   OF  CASES   CITED 


Ixi: 


People  V.  Rose,  219  III.  46,  §  446. 
People  V.  Sheldon  et  al.,  139  N.  Y. 

251,  §432. 
People    V.    Smith,    108    Mich.    527, 

§13. 
P(>ople  (ex  rel.  Delaware  &  IIiKlson 

Co.)  V.  Stevens,  134  App.  Div.  99, 

§117. 
People   V.   St.    Francis   Benev.   Soc, 

24  How.  Pr.  (N.  Y.)  216,  §361. 
People  (ex  rel.  Cantrell)  v.  St.  Louis, 

A.  D.  T.  H.  Rd.  Co.,  176  III.  512, 

§366. 
People  V.  Sturdevant,  9  N.  Y.  263, 

§81. 
People  V.  Sutter  Street  Ry.  Co.,  117 

Cal.  604,  §§  377,  383. 
People  (ex  rel.  New  York,  Ontario  & 

Western  Ry.  Co.)  v.  Tax  Commrs., 

132  App.  Div.  604,  §  124. 
People  V.  Utica  Ins.  Co.,  15  Johns. 

(N.  Y.)  357,  §§  385,  393. 
People  V.  Wal bridge,  6  Cow.  (N.  Y.) 

512,  §  13. 
People  V.  Westbrook,  89  N.  Y.  252, 

§  397. 
People  (ex  rel.  Cairo  Teleph.  Co.)  v. 

Western  Union  Teleg.  Co.,  166  111. 

15,   §  372. 
People  (ex  rel.  South  Shore  Traction 

Co.)   V.   Willcox,    196   N.   Y.   212, 

§154. 
People    (ex  rel.   Joline)    v.   Willcox, 

113  N.  Y.  Supp.  861,  §  154. 
People  V.  Young,  45  N.  Y.  Supp.  772, 

§3. 
People's  Bank  v.  Calhoun,  102  U.  S. 

256,  §  415. 
People's  Gas  Light  &  Coke  Co.   v. 

Chicago,  194  U.  S.  1,  §39. 
People's  Inv.  Co.  v.  Crawford  (Tex. 

Civ.  App.,    1898),  45  S.   W.   738, 

§301. 
People's  Nat.   Bank  v.   Marye,    191 

U.  S.  272,  §§  67,  71. 
People's  Postal  Teleg.  Cable  Co.  v. 

Hudson  R.  Teleph.  Co.,   19  Abb. 

N.  C.  (N.  Y.)  466,  §  442. 


Peoria,  Decatur  &  Evansville  Rd.  Co. 

v.  Duggan,  109  III.  537,  §  14. 
Peoria  Gas  &  Electric  Co.  v.  Peoria, 

200  U.  S.  48,  §  38. 
Pepperday  v.   Citizens'    Nat.   Bank, 

183  Pa.  St.  519,  §  323. 
Percy  Summer  Club  v.  Astle,  103  Fed. 

1,   §  194. 
Percy  Summer   Club   v.    Astle,    16() 

Fed.   1020,   §  194. 
Perine  v.  North  Jersey  St.  Ry.  Co., 

69  N.  J.  L.  230,  §319. 
Perry   County    v.    Stebbins,    66    III. 

App.  427,  §  302. 
Peterson  v.  Chicago,  Rock  Island  & 

Pacific   Ry.    Co.,    205   U.   S.   364, 

§  If^l. 
Peterson    v.    Western    Union   Teleg. 

Co.,  72  Minn.  41,  §317. 
Petri  V.  Commercial  Nat.  Bank,  142 

U.  S.  644,  §  213. 
Petty  V.  Brunswick  &  Western  Ry. 

Co.,  109  Ga.  666,  §  247. 
Phelps  V.  Church  of  Our  Lady  Help 

of  Christians,  99  Fed.  683,  §  319. 
Philadelphia  &  Reading  R.  R.  Co.  v. 

Derby,    14   How.    (55   U.  S.)   468, 

§  317. 
Philadelphia  &  Southern  Steam.ship 

Co.  V.  Pennsylvania,  122  U.  S.  326, 

§§  44,  58,  61. 
Philadelphia  &  T.  R.  Co.  v.  Phila- 
delphia &  B.  Pass.  R.  Co.,  6  Pa. 

Dist.  Rep.  269,  §  242. 
Philadelphia    Fire     Assoc,    v.     New 

York,  119  U.S.  110,  §§16,  55. 
Philadelphia,    W.   &   B.   Rd.  Co.  v. 

Maryland,  10  How.  (51  U.  S.)  376, 

§79. 
Philadelphia,    Wilmington    &    Bait. 

Rd.  Co.  V.  Quigley,  21  How.  (62 

U.  S.)  202,  §§  335,  336. 
Phillips    V.    Southwestern    Teleg.    & 

Teleph.  Co.,  72  Ark.  478,  §  442. 
Phillips  V.  Western  Terra  Cotta  Co., 

174  Fed.  873,  §§  218,  220. 
Phillips  Village  Corporation  v.  Phil- 
lips Water  Co.,  104  Me.  103,  §  437. 


Ixx 


TABLE   OF   CASES   CITED 


Phoenix  Fire  &   Marine  Ins.   Co.   v. 

Tennessee,  161  U.  S.  174,  §  79. 
Phoenix  Ins.  Co.  v.  Pennsylvania  Rd. 

Co.,  134  Ind.  215,  §  236. 
Pickard    v.    Pullman    Southern    i'vu 

Co.,  117  U.S.  34,  §44. 
Pickens  v.  South  Carolina  &  Georgia 

Rd.  Co.,  54  S.  C.  498,  §  319. 
Pickford's,    Limited,    v.    London    & 

Northwestern  Ry.  Co.,   12  Ry.  & 

Can.  Traff.  Cas.  154,  §  113. 
Pierce  v.   New  Hampshire,   5  How. 

(46  U.  S.)  504,  §  53. 
Pierce  v.  North  Carolina  Rd.  Co.,  124 

N.  C.  83,  §  317. 
Pierce  v.  Somerset  Ry.  Co.,  171  U.  S. 

641,  §  209. 
Pierce  v.  Tenn.  Coal,  Iron  &  R.  R. 

Co.,  173  U.  S.  1,  §  320. 
Pierson  v.  Fries,  38  N.  Y.  Supp.  765, 

§89. 
Pietsch  V.   Milbrath,    123  Wis.  647, 

§259. 
Pingree  v.  Mutual  Gas  Co.,  107  Mich. 

156,  §  314. 
Piquignot  v.  Pennsylvania  Ry.  Co., 

16  How.  (57  U.  S.)  104,  §  173. 
Pittsburg,   Allegheny   &   Manchester 

Pass.  Rd.  Co.  V.  Donahue,  70  Pa. 

St.  119,  §  317. 
Pittsburg  &  L.  A.  Iron  Co.  v.  Lake 

Superior  Iron  Co.,  118  Mich.  109, 

§435. 
Pittsburg   &   Southern   Coal   Co.    v. 

Bates,  156  U.  S.  577,  §  63. 
Pittsburg  &  T.  Copper  Min.  Co.  v. 

Quintrell,  91  Tenn.  693,  §  259. 
Pittsburg  &  West  End  Ry.  Co.  v. 

Point  Bridge  Co.,  223  Pa.  St.   133, 

§406. 
Pittsburg,  Cincinnati  &  St.  Louis  Ry. 

Co.  V.  Keokuk  &  H.  Bridge  Co.,  68 

Fed.  19,  §  163. 
Pittsburg,  Cincinnati  &  St.  Louis  Ry. 

Co.   V.    Montgomery,    152   Ind.    1, 

§26. 
Pittsburg,  Cincinnati  &  St.  Louis  Rd. 

Co.  V.  Theobald,  51  Ind.  246,  §  317. 


Pittsburg,  Cincinnati,  Chicago  &  St. 

Louis  Ry.  Co.  v.  Backus,  154  U.  S. 

421,  §§  14,  76. 
Pittsburg,  Cincinnati,  Chicago  &  St. 

Louis    Ry.    Co.    v.   Board    Public 

Works   West   Virginia,    172   U.   S. 

32,  §§  64,  123. 
Pittsburg,  Cincinnati,  Chicago  &  St. 

Louis  Ry.  Co.  v.  Call,  37  Ind.  App. 

232,  §  319. 
Pittsburg,  Cincinnati,  Chicago  &  St. 

Louis  Ry.  Co.  v.  Dodd,   115  Ky. 

176,  §  305. 
Pittsburg,  Cincinnati,  Chicago  &  St. 

Louis  Ry.  Co.  v.  German  Ins.  Co. 

(Ind.  App.),  87  N.  E.  995,  §  236. 
Pittsburg,  Cincinnati,  Chicago  &  St. 

Louis  Ry.  Co.  v.  Higgs,  165  Ind. 

694,  §  319. 
Pittsburg,  Cincinnati,  Chicago  &  St. 

Louis  Ry.  Co.  v.  Hunt  (Ind.,  1908), 

86  N.  E.  328,  §  139. 
Pittsburg,  Cincinnati,  Chicago  &  St. 

Louis  Ry.  Co.  v.  Street,   26  Ind. 

App.  224,   §  319. 
Pittsburg,  Cincinnati,  Chicago  &  St. 

Louis    Ry.    Co.    v.   SuUivan,    141 

Ind.  83,  §  317. 
Plainview  v.  Winona  &  St.  P.  Rd. 

Co.,  36  Minn.  505,  §  254. 
Planters'  &  Merchants'  Bk.  of   Mo- 
bile  V.    Andrews,    8   Port.    (Ala.) 

404,  §  227. 
Planters'   Bank  v.   Union  Bank,    16 

Wall.  (83  U.  S.)  483,  §  162. 
Plant    Investment   Co.    v.    Jackson- 
ville,  T.   &   K.    W.   Ry.   Co.,    152 

U.S.  71,  §  193. 
Plaquemines  Trop.  Fruit  Co.  v.  Hen- 
derson,  170  U.  S.  511,   §  186. 
Piatt    V.    Le    Cocq,     150    Fed.    391, 

§3. 
Piatt    V.    Wilmot,    193    U.    S.    602, 

§  284. 
Plumley  v.  Massachusetts,  155  U.  S. 

461,  §  58. 
Plummer  v.  Struby-Estabrooke  Mer- 
cantile Co.,  23  Colo.  190,  §  247. 


TABLE    OF   CASES    CITED  IxXl 

Pokegama  Sugar  Pine  Lumber  Co.  v.  Poultney  v.  Wills,  1  Aiken  (Vt.),  180, 

Klamath   River    Lumber   Co.,    U6  §  32L 

Fed.  34,  §  163.  Powers  v.  Chesapeake  &  Ohio  Rail- 

Polhemus  v.  Fitchburg  Rd.  Co.,  123  way  Co.,  1G9  U.  S.  92,  §  215. 

N.  Y.  502,  §  254.  Powers  v.  Detroit,  Grand  Haven  & 

Police    Jury    Parish    of    Iberville    v.  M.  Ry.  Co.,  201  U.  S.  543,  §§  23, 

Texas  &  Pacific  Ry.  Co.,  122  La.  79,  123. 

388,  §  227.  Poyser  v.  Trustee  of  Salem  Church, 

Pollard    v.     Bailey,    20    Wall.     (87  114  Ind.  389,  §§  348,  355. 

U.  S.)  520,  §  278.  Prairie  State  Loan  &  B.  Assoc,  v. 

PoUitz,  In  re,  206  U.  S.  323,  §  346.  Gorrie,  167  111.  414,  §  321. 

Pollock  V.  Carolina  Interstate  Bldg.  Pray  v.  Todd,  75  N.  Y.  Supp.  947, 

&  L.  Assoc,  48  S.  C.  65,  §  181.  §  441. 

Pollock  V.  Farmers'   Loan  &  Trust  Preferred  Tontine  Mercantile  Co.  v. 

Co.,  157  U.  S.  429,  §§  404,  411.  Nevada,  199  U.  S.  613,  §  93. 

Pollock  V.  Farmers'   Loan  &  Trust  Preferred  Tontine  Mercantile  Co.  v. 

Co.,  158  U.  S.  601,  §  67.  Secretary  of  State,  133  Mich.  395, 

Poole  V.  Paris  Mountain  Water  Co.,  §  347. 

81  S.  C.  438,  §  373.  Prentis  v.  Atlantic  Coast  Line  Co., 

Porter  v.  Sabin,  149  U.  S.  472,  §  285.  211  U.  S.  210,  §§  4,  5,  32,  36,  106, 

Port    Huron    Savings    Bank   v.    St.  112,  148,  151,  152,  154,  155. 

Clair  Circuit  Judge,  147  Mich.  551,  Price  v.  Powell,  3  N.  Y.  322,  §  243. 

§  397.  Price  v.  Riverside  Land  &  Irrig.  Co., 

Portland  Co.  v.  Hall  &  Grant  Con-  56  Cal.  431,  §  348. 

struction  Co.,  108  N.  Y.  Supp.  821,  Proctor  v.  Webler,  1  D.  Chip.  (Vt.) 

§  237.  371,  §  321. 

Port  of  Mobile  v.  Louisville  &  Nash-  Proprietors  of  White  School  House  v. 

ville  R.  Co.,  84  Ala.  116,  §§  409,  Port,  31  Conn.  242,  §  227. 

429.  Prout  v.  Starr,  188  U.  S.  537,  §  155. 

Postal  Teleg.  Cable  Co.  v.  Adams,  Providence  Bank  v.  Billings,  4  Pet. 

155  U.  S.  688,  §§  31,  75.  (29  U.  S.)  514,  §  67. 

Postal  Tel.  Cable  Co.   v.  Alabama,  Provident    Bank    &    Trust    Co.    v. 

155  U.  S.  482,  §  186.  Saxon,  116  La.  408,  §  247. 

Postal  Teleg.  Cable  Co.  v.  Charles-  Provident  Institution  v.   Massachu- 

ton,  153  U.  S.  692,  §  442.  setts,  6  Wall.  (73  U.  S.)  642,  §  74. 

Postal  Teleg.  Cable  Co.  v.  Eaton,  170  Pugh   v.   Fairmount  Gold   &  Silver 

111.  513,  §  315.  Min.  Co.,  112  U.  S.  238,  §  414. 

Postmaster   General   v.   Corporation  Pullman  Palace  Car  Co.  v.  Harrison, 

of  Glasgow,  10  Ry.  &  Can.  Cas.  238,  122  Ala.  149,  §§81,  156,  181. 

§  141.  Pullman  Palace  Car  Co.  v.  Hayward, 

Potomac  Elect.  Power  Co.  v.  United  141  U.  S.  36,  §  62. 

States  Elect.  L.  Co.,  26  Wash.  L.  Pullman  Palace  Car  Co.  v.  Lawrence, 

Rep.  (Dist.  Col.)  19,  §  258.  74  Miss.  782,  §  188. 
Potter  V.  Hall,  189  U.  S.  292,  §  129.  Pullman    Palace    Car    Co.    v.    Mis- 
Potter  v.  Necedah  Lumber  Co.,  105  souri  Pac.  Ry.  Co.,  115  U.  S.  587, 

Wis.  25,  §  292.  §  ISO. 

Potwin  Place,  City  of,  v.  Topeka  Ry.  Pullman  Palace  Car  Co.  v.  Pennsyl- 

Cc,  51  Kan.  609,  §  369.  vania,  141  U.  S.  18,  §  62. 


Ixxii 


TABLE    OF   CASES   CITED 


Purczell  V.  Smidt,  21  Iowa,  54,  §  3. 
Pyane  v.  Hook,  7  Wall.   (74  U.  S.) 
425,  §  166. 

Q 

Quaker  Realty  Co.,  In  re,   122  La. 

43,  §  397. 
Quigley   v.   Central   Pacific   R.   Co., 

11  Nev.  350,  §317. 
Quimby  v.  Conlan,    104   U.   S.  420, 

§129. 
Quincy   v.    Steele,    120   U.    S.    241, 

§  310. 

R 

Rahrer,  In  re,  140  U.  S.  545,  §  53. 
Railroad     Commission     v.     Chicago, 

Rock  Island  &  Gulf  Ry.  Co.  (Tex., 

1909),  117  S.  W.  794,  §  120. 
Railroad  Commission  v.  Houston  & 

Texas  Cent.  Ry.  Co.,  90  Tex.  340, 

§§111,  141. 
Railroad  Commission  v.  Weld  (Tex. 

Civ.  App.),  66  S.  W.  122,  §  141. 
Railroad  Commission  Cases  (Stone  v. 

Farmers'  Loan  &  Trust  Co.),   116 

U.  S.  307,  §§21,  32,  107,  114. 
Railroad    Commissioners    (State    ex 

rel.     Ry.    Comm'rs)     v.    Western 

Union  Teleg.  Co.,  113  N.  C.  213, 

§§  122,  140. 
Railroad  Co.  v.  Commissioners,  103 

U.  S.  1,  §  79. 
Railroad  Co.  v.  County  of  Hamblen, 

102  U.  S.  273,  §  79. 
Railroad  Co.  v.  Fuller,  17  Wall.  (84 

U.  S.)  560,  §  32. 
Railroad  Co.  v.  Gaines,  97  U.  S.  697, 

§§  23,  79. 
Railroad    Co.    v.    Hammersley,    104 

U.  S.  1,  §  120. 
Railroad    Co.    v.    Harris,    12    Wall. 

(79  U.  S.)  65,  §  227. 
Railroad  Co.  v.  Hecht,  95  U.  S.  108, 

§22. 
Railroad  Co.  (Hannibal  &  St.  Joseph 

Rd.  Co.)  V.  Husen,  95  U.  S.  465, 

§§  7,  8,  10,  44,  58,  108. 


Railroad  Co.  v.  Koontz,  104  U.  S.  5, 

§§  178,  181,  220. 
Railroad  Co.  v.  Maine,  96  U.  S.  499, 

§§  79,  180. 
Railroad  Co.  v.  Maryland,  21  Wall. 

(88  U.  S.)  456,  §§  32,  62,  75,  76. 
Railroad  Co.   v.   Orr,    18  Wall.    (85 

U.  S.)  471,  §  416. 
Railroad  Co.   v.   Peniston,   18  Wall. 

(85  U.  S.)  5,  §  70. 
Railroad  Co.  v.  Richmond,  96  U.  S. 

521,  §  23. 
Railroad  Co.  v.  Richmond,  19  Wall. 

(86  U.  S.)  584,  §§  11,  56. 
Railroad    Company    v.    Smith,    48 

Ohio  St.  219,  §§281,  287. 
Railway  Co.,   Ex  parte,    103  U.  S. 

794,  §374. 
Railway  Co.  v.   Barnett  (Tex.  Civ. 

App.),  26  S.  W.  783,  §  243. 
Railway  Co.  v.  Klepper  (Tex.  Civ. 

App.),  24  S.  W.  568,  §  243. 
Railway  Co.  v.  Smith,  84  Texas,  348, 

§243. 
Railway  Co.  v.  State,  55  Ark.  200, 

§§83,156. 
Railway  Co.   v.   Whitton,    13  Wall. 

(80  U.  S.)  270,  §§4,  173. 
Ramagnano  v.  Crook,  85  Ala.  226, 

§356. 
Rankin   v.    Brewery  &  Ice  Co.,    12 

Mex.  54,  §  272. 
Rannels  v.  Rowe,  145  Fed.  296,  §  247. 
Raphael  Weil  &  Co.  v.  Crittenden, 

139  Cal.  488,  §  247. 
Raritan  River  R.  Co.  v.  Middlesex  & 

S.  Traction  Co.,  70  N.  J.  L.  732, 

§144. 
Ratcliff  V.  Louisville  Courier  Journal 

Co.,  99  Ky.  416,  §  335. 
Ratcliif    V.     Wichita    Union    Stock 

Yards  Co.,  74  Kan.  1,  §  15. 
Rathbone  v.  Ayer,  82  N.  Y.  Supp. 

235,  §  284. 
Rathbone  v.   Ayer,    121   App.   Div. 

355,  §  266. 
Rathbone  v.   Parkersburg  Gas  Co., 

31  W.  Va.  798,  §  302. 


TABLE   OF  CASES   CITED 


Ixxiii 


Ratterman  v.  Western  Union  Teleg. 

Co.,  127  U.  S.  411,  §61. 
Raymond  v.  Chicago  Traction  Co., 

207  U.  S.  20,  §§  123,  164. 
Re.    See  name. 
Read   v.    Brayton,    143   N.   Y.   342, 

§341. 
Reagan  v.  Farmers'  Loan  &  Trust 

Co.,  154  U.  S.  362,  §§  34,  112,  144, 

146,  149,  155. 
Reagan  v.  Mercantile  Trust  Co.,  154 

U.  S.  413,  §  75. 
Recknagel   v.    Empire   Self-Lighting 

Oil  Lamp  Co.,  52  N.  Y,  Supp.  635, 

§441. 
Rector  v.   Gibbon,    HI    U.   S.   276, 

§  129. 
Reed     v.     Chicago,     Burlington     & 

Quincy  Rd.  Co.,  84  Neb.  8,  §  327. 
Reed   v.   Home  Savings   Bank,    130 

Mass.  443,  §§317,  336. 
Reelfoot  I-ake  Levee  Dist.  v.  Daw- 
son, 97  Tenn.  151,  §  3. 
Rees    V.    Olmstead,    135    Fed.    301, 

§  177. 
Rehberg  v.   Surety  Co.,    131    Mich. 

135,  §413. 
Rehm  v.  German  Ins.  &  Sav.  Inst., 

125  Ind.   135,   §  181. 
Reid  V.    Colorado,    187  U.   S.    137, 

§  58. 
Reilly  v.  Crown  Petroleum  Co.,  213 

Pa.  St.  505,  §§321,  329. 
Reinartson  v.  Chicago  Great  West^ 

em  Ry.  Co.,  174  Fed.  707,  §  216. 
Reinecke  v.  Bailey,  33  Ky.  L.  Rep. 

977,  §306. 
Remmers  v.  Remmers,  217  Mo.  541, 

§339. 
Renick  v.  Bank  of  West  Union,  13 

Ohio,  298,  §  240. 
Renville,  In  re,  61  N.  Y.  Supp.  549, 

§372. 
Rex  V.  Passmore,  3  T.  E.  199,  §  239. 
Reynes  v.  Dumont,   130  U.  S.  354, 

§341. 
Reynolds     v.     Crawfordsville     First 

Nat.  Bank,  112  U.  S.  405,  §  167. 


Rhawn   v.   Edge  Hill  Furnace  Co., 

201  Pa.  St.  637,  §  224. 
Rhode  Island  v.  Massachusetts,    12 

Pet.  (37  U.  S.)  657,  §§  81,  82,  197. 
Rhodes  v.  Iowa,  170  U.  S.  412,  §§  11, 

52. 
Rice,    In   re,    155    U.    S.    153,    396, 

§§346,  348,  396. 
Richardson   v.   Buhl,   77    Mich.  632, 

§432. 
Richardson  v.   (Jraham,   45   W.   Va. 

134,  §  259. 
Richardson  v.  McCreary  &  Co.,   158 

Ala.  65,  §  320. 
Richmond  Ry.  &  Electric  R.  Co.  v. 

Brown,    97    Va.    26,    §§  348,    355, 

369,  376. 
Rickerson  Roller  Mill  Co.  v.  Farrell 

Foundry  &  M.  Co.  (U.  S.  C.  C.  A.), 

75  Fed.  554,  §  291. 
Riddle  v.  Proprietors,  7  Mass.   169, 

§  332. 
Rieger,  Kapner  &  Altmark,  157  Fed. 

009,  §  225. 
Riemann  v.  Tyroler  &  Vorarlbergor 

Verein,  104  111.  App.  413,  §  245. 
Riggs,  Matter  of,  214  U.  S.  9,  §§  346, 

348. 
Riggsbee,  In  re,  151  Fed.  701,  §  137. 
Ripley  v.  McBarron,  125  Mass.  272, 

§336. 
Ripon  Knitting  Works  v.  Schreiber, 

101  Fed.  810,  §  137. 
Ripstein   v.    Haynes   Medina  Valley 

Ry.  Co.  (Tex.  Civ.  App.),  85  S.  W. 

314,  §386. 
Rishworth  v.   Northeastern  Ry.,   12 

Ry.  &  Can.  Traff.  Cas.  34,  §  113. 
Risley  v.  Phcsnix  Bank,  83  N.  Y.  318, 

§200. 
Ritchie  v.  People,  155  111.  98,  §  IS. 
Ritter  v.  Mutual  Life  Ins.  Co.,   169 

U.  S.  139,  §  17. 
Riverside  Oil  Co.  v.  Hitchcock,  190 

U.  S.  316,  §  129. 
Roake  v.  American  Teleph.  &  Teleg. 

Co.,  41  N.  J.  Eq.  35,  §  427. 
Roberts  v.  Lewis,  144  U.  S.  653,  §  173. 


Ixxiv 


TABLE   OF  CASES   CITED 


Roberts  v.  Northern  Pacific  Ry.  Co., 

158  U.  S.  1,  §  315. 
Roberts,  Ex  parte,  166  Mo.  207,  §  3. 
Robbins  v.  Shelby  Taxing  Dist.,  120 

U.  S.  4S9,  §§  31,  44,  60. 
Robinson  v.  City  of  Wilmington,  65 

Fed.  858,  §  123. 
Robinson  v.   Lowe,   50  W.  Va.  75, 

§167. 
Robinson  v,  McNeill,  18  Wash.  163, 

§317. 
Robinson  v.   Northampton  St.   Ry. 

Co.,  157  Mass.  224,  §  319. 
Robinson    v.   'West    Virginia    Loan 

Co.,  90  Fed.  770,  §  305. 
Rochester  v.  Gate  City  Mining  Co., 

86  Mo.  App.  447,   §  316. 
Rochester,  Corning  &  Elmira  Trac- 
tion Co.,  Matter  of,  102  N.  Y.  Supp. 

1112,   §  142. 
Rochester  Ry.  Co.  v.  Rochester,  205 

U.  S.  236,  §§  23,  79,  180. 
Rocky  Mountain  Nat.  Bank  v.  Bliss, 

89  N.  Y.  338,  §  307. 
Rogers  v.  Alabama,  192  U.  S.  226, 

§208. 
Rogers  v.  Galloway  Female  College, 

64  Ark.  627,  §  227. 
Rogers  v.  Nashville,  C.  &  St.  L.  R. 

Co.  (U.  S.  C.  C.  A.),  91  Fed.  294, 

§266. 
Rogers  Lumber  Co.  v.  McRea  (Ind. 

Ty.  Ct.  App.),  104  S.  W.  803,  §  237. 
Rogers  Park  Water  Co.  v.  Fergus, 

180  U.  S.  024,  §  95. 
Roman   v.    Woolfolk,    98   Ala.    219, 

§305. 
Rose  V.  Cash,  58  Ind.  278,  §  341. 
Rose    V.    Imperial    Engine   Co.,    112 

N.  Y.  Supp.  8,  §§317,  335. 
Rosenbaum  v.  Rice,  83  N.  Y.  Supp. 

494,  §  306. 
Roseneau  v.  Empire  Circuit  Co.,  115 

N.  Y.  Supp.  511,  §  338. 
Rothchild     Bros.     v.    Mahoney,    51 

Wash.  633,  §  233. 
Rothmiller  v.  Stein,  143  N.  Y.  581, 

§339. 


Rothstein   v.    Brooklyn   Heights   R. 

Co.,  114  N.  Y.  Supp.  344,  §  S9. 
Rowell  V.  Boston  &  M.  R.  Co.,  68 

N.  H.  358,  §  317. 
Ruby-Chief    Min.    &    Mill.    Co.,    17 

Colo.  199,  §  259. 
Russ  V.  Pennsylvania  Teleph.  Co.,  15 

Pa.  Co.  Ct.  Rep.  26,  §  242. 
Rutherford    v.    Ilill,    22    Oreg.    218, 

§  246. 
Rutter  V.  Shoshone  Mining  Co.,  75 

Fed.  37,  §  208. 
Ryan  v.  Seaboard  &  Rd.  Co.,  89  Fed. 

397,  §436. 
Ryan   Livestock   &   Feeding  Co.   v. 

Kelley,  71  Kan.  874,  §  236. 

S 

Sabin  v.  Vermont  Central  Rd.  Co., 

25  Vt.  363,  §  332. 
Safe  Deposit  &  Trust  Co.   of  Balti- 
more V.  City  of  Anniston,  96  Fed. 

661,  §  163. 
Sage  V.   Shepard   &   Morse   Lumber 

Co.,  39  N.  Y.  Supp.  449,  §  319. 
Saint.     See  St. 
Salina  National  Bank  v.  Prescott,  60 

Kan.  400,  §  201. 
Salisbury  Gas  Co.  v.  Salisbury,   138 

Pa.  St.  250,   §  163. 
Salt  Lake  City  v.  Christensen  Co.,  34 

Utah,  38,  §  3. 
Salt   Lake   Hardware   Co.   v.   Tintic 

Mill   Co.,    13    Utah,    423,    §§297, 

308. 
Saltman  v.   Nesson,   201   Mass.   534, 

§350. 
Saltmarsh  v.  Planters'  &  Merchants' 

Bk.,  17  Ala.  761,  §  239. 
San  Antonio  &  Arkansas  Pass.  Ry. 

Co.  V.  Graves  (Tex.  Civ.  App.),  49 

S.  W.  1103,  §319. 
San  Antonio,  City  of,  v.  Lewis,  9  Tex. 

69,  §321. 
San  Antonio  St.  Ry.  Co.  v.  State, 

Elmendorf,  90  Tex.  520,  §  353. 
Sanborn,  In  re,  148  Fed.  222,  §  137. 


TABLE    OF   CASES    CITED 


Ixxv 


Sanders  v.  St.  Louis  &  New  Orleans 

Aiiclior  Line,  97  Mo.  2(3,  §  !)0. 
Sanderson  v.   Whitmeyer,  2  Uauph. 

Co.  Rep.  174,  §  1G3. 
San   Diego  Gas  Co.   v.   France,    148 

Cal    252,  §405. 
San    Diego    Land    &    Town    Co.    v. 

Jasper,  189  U.  S.  430,  439,  §§  34, 

408. 
San  Diego  Land  &  Town  Co.  v.  Na- 
tional City,    174  U.  S.   739,  839, 

§§  36,  37,  95,  147. 
San  Diego  Water  Co.  v.  San  Diego, 

118  Cal.  556,  §  143. 
Sands  v.   Manistee  River  Imp.  Co., 

123  U.  S.  288,  §  56. 
Sanford  v.  Sanford,  139  U.  S.  642, 

§  130. 
San  Francisco  Gas  &  Electric  Co.  v. 

Superior  Court,  155  Cal.  30,  §  349. 
San  Joaquin  &  King's  River  Canal  & 

Irrig.  Co.  v.  Stanislaus  County,  155 

Cal.  21,  §  408. 
San  Joaquin  &  King's  River  Canal  & 

Irrig.  Co.  v.  Stanislaus  County,  90 

Fed.  516,  §  208. 
San  Joaquin  Land  &  Water  Co.  v. 

West,  94  Cal.  399,  §  259. 
San  Jose  Land  &  Water  Co.  v.  San 

Jose  Ranch  Co.,    189  U.  S.    177, 

§  421. 
Santa  Cruz  Rock  Pavement  Co.  v. 

Broderick,  113  Cal.  628,  §  90. 
Santa  Rosa  Lighting  Co.  v.   Wood- 
ward, 119  Cal.  30,  §  379. 
Saratoga     Springs,     Village     of,     v. 

Saratoga  Gas,  etc.,  Co.,  191  N.  Y. 

123,  §  154. 
Satterlee  v.  Matthewson,  2  Pet.  (27 

U.  S.)  380,  §  4. 
Satterlee  v.  Struder,  31  W.  Va.  781, 

§356. 
Saunders  v.   Kohnke,   109  La.  838, 

§  391. 
Saunders  v.  Memphis  &  R.  S.  R.  Co., 

101  Tenn.  206,  §  315. 
Savannah,  F.  &  W.  Ry.  Co.  v.  Parish, 

117  Ga.  893,  §  334. 


Savannah,  T.  &  I.  of  H.  Ry.  Co.  v. 

Savannah,    198   U.  S.  392,    §§  23, 

123. 
Savings  &  Trust  Co.  of  Cleveland  v. 

Bear   Valley   Irrig.   Co.,    112   Fed. 

693,  §  305. 
Savings  Bank  v.  Archbold,  104  U.  S. 

708,  §72. 
Sawyer,  In  re,  124  U.  S.  200,  §  430. 
Saxby  v.   Southern    Land    Co.,   109 

Va.  196,  §339. 
Scarsdale    Pub.    Co.    Colonial    Press 

Co.  V.  Carter,  116  N.  Y.  Supp.  731, 

§339. 
Scatcherd  Lumber  Co.  v.  Pike,   113 

Ala.  555,  §  198. 
Schlemmer  v.   Buffalo,  Rochester  & 

Pittsburg   Ry.   Co.,   205   U.   S.    1, 

§27. 
Schlosser  v.  Hemphill,  198  U.  S.  173, 

§204. 
SchoUenberger  v.  Pennsylvania,  171 

U.  S.  1,  §§  53,  58. 
School  District  v.  Hodgin,   180  Mo. 

70,   §  247. 
Schroeder  v.  Merchants'  &  Mechan- 
ics' Ins.  Co.,  104  111.  71,  §  83. 
Schultz    v.    German-American    Real 

Estate  Co.,  47  N.  Y.  Supp.  500, 

§413. 
Schwab  V.  Potter  Co.,  194  N.  Y.  409, 

§§  260,  267., 
Schwartz     v.     Interborough     Rapid 

Transit  Co.,  103  N.  Y.  Supp.  SO, 

§89. 
Scott  V.  Donald,  165  U.  S.  58,  107, 

§§53,  155. 
Scott  V.   Mineral  Development  Co., 

130  Fed.  497,  §  195. 
Scott  County  Macadamized  Rd.  Co. 

V.  Hines,  215  U.  S.  336,  §  429. 
Scottish   Security  Co.'s   Receiver  v. 

Starks,  25  Ky.  L.  Rep.  1722,  §  289. 
Scoville  Plumbing  Co.   v.   Highland 

Park    Land    Co.,    99    Iowa     303, 

§320. 
Scranton  Electric  Light  &  Heat  Co.'s 

Appeal,  122  Pa.  St.  154,  §  421. 


Ixxvi 


TABLE    OF   CASES    CITED 


Scranton    Elec.    L.    &    11.    Co.    v. 
Scranton  Ilium.  H.  it  P.  Co.,  122 
Pa.  St.  154,  §  234. 
Scudder  v.  Comptroller  of  I\cw  York, 

175  U.  S.  32,  §  158. 
Seaboard  Air  Line  Ry.  v.  Hubbard, 

142  Ala.  546,  §  319. 
Seaboard  Air  Line  Ry.  Co.  v.  Leader, 

115  Ga.  702,  §  254. 
Seaboard  Air  Line  Ry.  Co.  v.  See- 
ders, 207  U.  S.  73,  §§  13,  30,  48. 
Seals  V.  Augusta  Southern  Rd.  Co., 

70  Ga.  368,  §  319. 
Sears  v.  Kincaid,  33  Oreg.  215,  §  342. 
Seaton   v.    Grimm,    110   Iowa     145, 

§247. 
Sebastian  v.   Martin  Brown  Co.,   75 

Tex.  291,  §  315. 
Secretary  v.  McGarrahan,  9  Wall.  (76 

U.  S.)  298,  §  130. 
Secretary  of  State  v.  National  Salt 

Co.,  126  Mich.  644,  §  352. 
Security  &  Savings  Loan  Assoc,   v. 

Elbert,   153  Ind.   198,   §  236. 
Security     Bank     of     Minnesota     v. 

Holmes,  68  Minn.  538,  §  325. 
Security    Mutual    Life    Ins.    Co.    ^  . 

Prewitt,    Ins.   Comm.,    202   U.   S. 

246,  §  198. 
Security  Trust  Co.   v.   Black  River 

National    Bank,    187    U.    S.    211, 

§  402. 
Security  Trust  Co.  v.  Lexington,  203 

U.  S.  272,  §  67. 
Security    Trust   Co.    v.    Tarpey,    66 

111.  App.  589,  §  435. 
Seeberger  v.  McCormick,   175  U.  S. 

274,  §  247. 
Seibert  v.  Minneapolis  &  St.  Louis  R. 

Co.,  52  Minn.  246,  §  416. 
Selligcr  v.  Kentucky,  213  U.  S.  200, 

§7. 
Sells  V.  Columbus  St.  Ry.  Co.  (Ohio), 

28  Week.  L.  Bull.  172,  §  242. 
Selma,  Rome  &  Dalton  Rd.  Co.  v. 

Webb,  49  Ala.  240,  §  332. 
Sere  V,  Pitot,  6  Cranch  (U.  S.),  335, 

§189. 


Seven     Star     Grange,     Patrons     of 

Hu.'ibandry,   No.  73,   v.  Ferguson^, 

98  Me.  176,  §  247. 
Shaffer  &  Munn  v.  Union  Mining  Co., 

55  Md.  74,  §  26. 
Shamokin  Valley  Rd.  Co.  v.  Liver- 
more,  47  Pa.  St.  465,  §  315. 
Shane  v.   Mexican   International  R. 

Co.  (Tex.  Civ.  App.),  28  S.  W.  456, 

§181. 
Sharp  v.  Erie  Rd.  Co.,  184  N.  Y.  100, 

§  317. 
Shaw  V.  City  of  Covington,  194  U.  S. 

593,  §  180. 
Shaw  V.  Gilbert,  111  Wis.  65,  §  291. 
Shaw  V.  Railroad  Co.,  100  U.  S.  605, 

§416. 
Shaw    V.    Staight,     107    Minn.    152, 

§§291,  292,  301. 
Shawnee  &  Sav.  Bank  Co.  v.  Miller, 

24  Ohio  Cir.  Ct.  R.  198,  §  246. 
Shea  V.  Sixth  Avenue  Rd.  Co.,  62 

N.  Y.  ISO,  §  317. 
Sheehan  v.  Scott,  145  Cal.  684,  §  3. 
ShefTiekl   Furnace  Co.   v.   Witherow, 

149  U.  S.  574,  §  415. 
Shepherd  v.   Baltimore  &  Ohio  Rd. 

Co.,  130  U.  S.  426,  §  242. 
Shepley    v.    Cowan,    91    U.    S.    330, 

§  129. 
Sheridan    Brick    Works    v.    Marion 

Trust  Co.,  157  Ind.  292,  §  303. 
Sherley  v.  Billings,  71   Ky.  (8  Bush) 

147,  §  317. 
Sherlock  v.  AUing,  93  U.  S.  99,  §  44. 
Sherman  v.  American  Congregational 

Assn.,  113  Fed.  609,  §  223. 
Sherman   v.   Herr,   220  Pa.  St.  420, 

§  439. 
Sherman    Gas     &    Electric    Co.     v. 

Belden  (Tex.  Civ.  App.,  1909),  115 

S.  W.  896,  §  334. 
Sherwood  v.  Atlantic  &  Danville  Ry. 

Co.,  94  Va.  291,  §§345,  368. 
Sherwood  v.  Citizens'  Water  Co.,  90 

Cal.  635,  §  373. 
Shields    v.    Barrow,     17    How.     (58 

U.  S.)  130,  §  166. 


TABLE    OF   CASES   CITED 


Ixxvii 


Shields    v.    Hobart,     172    Mo.    4"J1, 

§  288. 
Shine  v.  Kentucky  C.  R.  Co.,  85  Ky. 

177,  §  356. 
Shipley,    Matter    of,    v.    Mechanics' 

Bank,     10    Johns.    (N.    Y.)    484, 

§332. 
Shipman    v.    State    Livestock    Sani- 
tary Commission,    115   Mich.   488, 

§357. 
Shober   &  Carqueville   Lith.   Co.    v. 

Schedler,  63  111.  App.  48,  §  319. 
Shoecraft    v.    Bloxham,    124    U.    S. 

730,  §  189. 
Short  V.  BuUion-Beek  &  C.  Mining 

Co.,  20  Utah,  20,  §  18. 
Short,  In  re,  47  Kan.  250,  §  247. 
Sibley  v.  Carteret  Club,  4  N.  J.  L. 

295,  §  361. 
Sigua  Iron  Co.  v.  Clark,  77  Fed.  496, 

§  163. 
Sigwald  V.  City  Bank,  82  S.  C.  382, 

§§  274,  303. 
Siler  V.  Louisville  &  Nashville  Rd. 

Co.,   213  U.  S.   175,    §§  106,    110, 

153. 
Silver  Creek  Cement  Corp.  v.  Union 

Lime  Co.,  138  Ind.  297,  §  315. 
Simmons  Creek  Coal  Co.   v.  Doran, 

142  U.  S.  417,  §412. 
Singer  v.  Hutchinson,   183  111.  606, 

§  227. 
Singers-Bigger  v.  Young  (U.  S.  C.  C. 

A.),  166  Fed.  82,  §  261. 
Skinner   v.   Garnett   Gold   Min.   Co., 

96  Fed.  735,  §  27. 
Skinner  v.  Jordan,  91  N.  Y.  Supp. 

323,  §  200. 
Skowegan   First   Nat.    Bk.    v.    Max- 
field,  S3  Me.  576,  §  339. 
Slater  v.  Advance  Thresher  Co.,  97 

Minn.  305,  §  317. 
Slaughter  v.   Mallet  Land  &  Cattle 

Co.,  141  Fed.  282,  §  194. 
Slaughter    House    Cases,    16    Wall. 

(83  U.  S.)  36,  §  15. 
Sleeper    v.    Norris,    59    Kan.    555, 
§308. 


Sloun  V.  Byers,  37  Mont.  503,  §  156. 
Small  V.  Rakestraw,  196  U.  S.  403, 

§  129. 
Smelting   Co.    v.    Kemp,    104    U.   S. 

636,  §  129. 
Smiley   v.    Kansas,    196   U.   S.    447, 

§§  11,  432. 
Smith  V.  Alabama,   124  U.  S.  465, 

§27. 
Smith  V.  American  National  Bank, 

89  Fed.  832,  §  163. 
Smith  V.  Buckley,  18  Colo.  App.  227, 

§305. 
Smith  V.  Crocker,  43   N.  Y.  Supp. 

427,  §  200. 
Smith  V.  Detroit  Loan  &  B.  Assoc, 

115  Mich.  340,  §  316. 
Smith  V.  Downey,  8  Ind.  App.  179, 

§341. 
Smith  V.   Haven's  Relief  Fund  So- 
ciety, 103  N.  Y.  Supp.  770,  §§  246, 

249. 
Smith    V.    Lake   Shore    &    Michigan 

Southern  Ry.  Co.,  114  Mich.  460, 

§§  23,  118. 
Smith  V.  Mayfield,  163  111.  447,  §  247. 
Smith    V.  O'Keefe,  43    W.  Va.   172, 

§167. 
Smith  V.   Whitney,    116  U.  S.    167, 

§§395,  399. 
Smith,  Ex  parte,  23  Ala.  94,  §  397. 
Smithsonian  Institution  v.  St.  John, 

214  U.  S.  226,  §  208. 
Smyth  V.  Ames,  169  U.  S.  466,  §§  4, 

23,  32,  34,  36,  106,  143,  144,  149, 

155,  163,  356. 
Smyth  V.  New  Orleans  Canal  &  Bkg. 

Co.,  141  U.  S.  656,  §  163. 
Snell  V.  Clinton  Electric  Light  Co., 

196  111.  626,  §  365. 
Snider  Sons'   Co.   v.   Troy,   91    Ala. 

224,  §§  246,  265. 
Snohomish  County  v.  Puget  Sound 

Nat.  Bk.,  81  Fed.  518,  §  208. 
Snyder  v.  Citizens'  Gas  &  O.  Min. 

Co.,  151  Ind.  505,  §  393. 
Snyder   v.    Marks,    109    U.    S.    189, 
§123. 


Ixxviii 


TABLE    OF   CASES   CITED 


Society   for   Propagation   of   Gospel, 

etc.,   V.  Town   of  Pawlet,   4   Pet. 

(29  U.  S.)  480,  §  173. 
Society  for  Savings  v.  Coite,  6  Wall. 

(73  U.  S.)  594,  §§  m,  74. 
Solon  V.  State  (Tex.  Cr.  App.,  1908), 

114  S.  W.  349,  §  3. 
Soon   Hing   v.   Crowley,    113   U.   S. 

703,  §§  9,  14. 
South  Bay  Co.  v.  Howey,  190  N.  Y. 

240,  §  236. 
South  Carolina  v.  Georgia,  93  U.  S. 

4,  §  56. 
South  Carolina  v.  United  States,  199 

U.  S.  437,  §§  2,  3,  54,  69. 
South  Dakota  v.  North  Carolina,  192 

U.  S.  286,  §  194. 
South    Dakota    Cent.     Ry.    Co.    v. 

Chicago,  M.  &  St.  P.  Ry.  Co.,  141 

Fed.  582,  §  198. 
Southeastern    Ry.    Co.    v.    Railway 

Comm'rs,  etc.,  3  Ry.  &  Can.  Trafiic 

Cas.  464,  §  119. 
Southern   Electric   Securities   Co.   v. 

State,  91  Miss.  195,  §§  223,  224. 
Southern    Express    Co.    v.    Bank    of 

Tupelo,  108  Ala.  517,  §  339. 
Southern  Express  Co.   v.  Rose  Co., 

124  Ga.  581,  §  32. 
Southern    Gum    Co.    v.    Laylin,    66 

Ohio  St.  578,  §  3. 
Southern    Pacific    Co.    v.    American 

Well  Works,  172  III.  9,  §  321. 
Southern  Pacific  Co.  v.  Bartine,  170 

Fed.  725,  §§  .34,  36. 
Southern  Pacific  Co.  v.  Board  of  Rail- 
road Commissioners,  78  Fed.  236, 

§149. 
Southern  Pacific  R.  Co.  v.  Burr,  86 

Cal.  279,  §  315. 
Southern    Pacific    Co.    v.    Colorado 

Fuel    &   Iron  Co.,    101   Fed.   779, 

§105. 
Southern    Pacific    Co.    v.    Earle,    82 

Fed.  694,   §  182. 
Southern    Pacific    Co.    v.    Interstate 

Commerce  Commission,  200  U.  S. 

536,  §§  35,  104,  131. 


Southern  Railroad  Co.  v.  Allison,  190 

U.  S.  326,  §§  178,  179. 
Southern   Ry.   Co.    v.    Bunnell,    138 

Ala.  247,  §  319. 
Southern  Ry.  Co.  v.  Commonwealth, 

98  Va.  758,  §  141. 
Southern    Ry.    Co.    v.    Ensign    Mfg. 

Co.,  117  Fed.  417,  §417. 
Southern  Ry.  Co.  v.  James,  118  Ga. 

340,  §  317. 
Southern    Ry.    Co.    v.    McNeill,    155 

Fed.  756,   §  114. 
Southern  Ry.  Co.  v.  North  Carolina 

Rd.  Co.  (U.  S.  C.  C),  81  Fed.  595, 

§§  163,  250. 
Southern  Ry.  Co.  v.  State,  125  Ga. 

287,  §§446,  456. 
Southern  Ry.  Co.  v.  St.  Louis  Hay  & 

Grain  Co.,  214  U.  S.  297,  §  135. 
Southern  Realty  Investment  Co.  v. 

Walker,  211  U.  S.  603,  §  195. 
Southern    Steel    Co.   v.    Hopkins    et 

al.,  157  Ala.  175,  §  235. 
South    Hetton    Coal    Co.,    Ltd.,    v. 

Northeastern    News   Assoc,    Ltd., 

63  L.  J.  (N.  S.)  Q.  B.  293,  §  335. 
South  Joplin  Land  Co.  v.  Case,   104 

Mo.  572,  §  259. 
Spence  v.  Norfolk,  etc.,  Rd.  Co.,  92 

Va.  102,  §  243. 
Spencer  v.  Wabash  Rd.  Co.,  55  N.  Y. 

Supp.  948,  §  319. 
Spencer  Creek  Water  Co.  v.  Vallcjo, 

48  Cal.  70,  §  87. 
Spencer  Field  &  Co.  v.  Cooks,  16  La. 

Ann.  153,  §  247. 
Spencer's    Appeal,     78    Conn.     301, 

§§  5,  24,  139. 
Spinning  &  Brown  v.  Ohio  Life  Ins. 

&  Trust  Co.,  2  Disney  (Ohio),  336, 

§82. 
Spokane  v.   Amsterdamsch  Trustees 

Kantoor,  22  Wash.  172,  §  265. 
Sprague  v.  National  Bank  of  Amer- 
ica, 172  111.  149,  §§  283,289. 
Spreune  v.  Garfield  Lodge  of  United 

Slavonian  Benev.  Soc.  No.  1,  117 

111.  App.  253,  §  247. 


TABLE    OF   CASES    CITED  Ixxix 

Sprigg  V.  Garrett  Park,  Si)  Md.  40(),  St.  Louis,  Iron  Mountain  &  Houthcrn 

§  \).  Ry.  Co.  V.  Camden  Bank,  47  Ark. 

Springfield  Engine  &  Threshing  Co.  541,  §  322. 

V.  Green,  25  111.  App.  106,  §  33(5.  St.  Louis,  Iron  Mountain  &  Southern 

St.  Anthony  Falls  Water  Power  Co.  Ry.    Co.    v.    Paul,     64     Ark.    83, 

V.    St.    Paul    Water   Comm.,    16S  §  223. 

U.  S.  349,  §  56.  St.  Louis,  Iron  Mountain  &  St.  Paul 

St.    Clair   v.    Cox,    106    U.   S.    350,  Ry.  Co.  v.  Paul,   173  U.  S.  404, 

§  181.  §§  14,  26,  27. 

St.    Francis    Electric    Light    Co.    v.  St.  Louis,  Iron  Mountain  &  St.  Paul 

Electric  Supply  Co.,  60  Ark.  171,  Ry.  Co.  v.  Taylor,  210  U.  S.  281, 

§  253.  §§  199,  209. 

St.  Joseph  &  Grand  Island  Ry.  Co.  v.  St.   Louis  Southwestern  Ry.  Co.  v. 

Steele,  167  U.  S.  659,  §  179.  Harvey,  144  Fed.  806,  §  317. 

St.  Lawrence  Co.  v.  Holt  &  Matthews,  St.   Louis  Southwestern  Ry.  Co.   v. 

51  W.  Va.  352,  §  82.  Mayfield,    35  Tex.   Civ.   App.   82, 

St.   Louis  V.  Western  Union  Teleg.  §  317. 

Co.,  149  U.  S.  465,  §  31.  St.   Louis  Southwestern  Ry.  Co.   v. 

St.  Louis,  Alton  &  Chicago  Rd.  Co.  Thompson,  102  Tex.  89,  §  338. 

V.  Dalby,  19  111.  353,  §§  32S,  332.  St.   Louis   Southwestern   Ry.  Co.  v. 

St.   Louis,   A.   &  T.   II.   Rd.   Co.   v.  Tyler,  212  U.  S.  552,  §  209. 

Cleveland,   Chicago,"  C.   &   I.    Ry.  St.    Mary's   Petroleum  Co.   v.   West 

Co.,  125  U.  S.  658,  §  418.  Virginia,  203  U.  S.  183,  557,  §§  14, 

St.  Louis  &  K.  C.  R.  Co.  v.  Conti-  19. 

nental    Trust    Co.,    95    Fed.    507,  St.  Paul  &  M.  M.  Ry.  Co.  v.  Todd 

§  248.  County,  142  U.  S.  282,  §  209. 

St.  Louis  &  San  Francisco  R.  Co.  v.  St.  Paul,  City  of,  v.  Freedy,  86  Minn. 

Cross,  171  Fed.  480,  §  178.  350,  §  356. 

St.  Louis  &  San  Francisco  Ry.  Co.  v.  St.    Paul,    Minneapolis    &    Manitoba 

Gill,  156  U.  S.  649,  §§  23,  34,  39,  Ry.  Co.  v.  Minnesota,  214  U.  S. 

144,  149.  497,  §§  7,  25. 

St.  Louis  &  San  Francisco  Ry.  Co.  v.  St.    Paul,    Minneapolis    &    Manitoba 

James,  161  U.  S.  545,  §§  174,  178,  Ry.  Co.  v.  St.  Paul  &  N.  P.  R.  Co., 

179.  68  Fed.  2,  §  208. 

St.  Louis  &  San  Francisco  Ry.  Co.  Standard    Oak    Veneer    Co.,    In    re 

V.  Matthews,   165  U.  S.   1,   §§  14,  (U.   S.   Dist.   Ct.),    173  Fed.    103, 

23,  30.  §  181. 

St.  Louis  &  San  Francisco  Ry.  Co.  v.  Standard  Oil  Co.  v.  Commonwealth, 

Stone,  78  Kan.  505,  §  243.  107  Ky.  606,  §  446. 

St.  Louis  &  San  Francisco  Rd.  Co.  v.  Standard  Oil  Co.  v.  Commonwealth, 

Wyatt,  84  Ark.  193,  §§  317,  331.  29  Ky.  L.  Rep.  5,  §  457. 

St.  Louis,  C,  G.  &  Ft.  Smith  R.  Co.  Stanislaus  County  v.  San  Joaquin  & 

V.  Merriam,  156  U.  S.  478,  §  209.  King's  River  Canal   &  Irrig.  Co., 

St.  Louis,  Iron  Mountain  &  Southern  192  U.  S.  201,  204,  §§  36,  37,  95. 

Ry.  Co.  v.  Berry,  113  U.  S.  465,  Stanton  v.  New  York  &  E.  Co.,  59 

§§79,  180.  Conn.  272,   §259. 

St.  Louis,  I.  M.  &  S.  R.  Co.  v.  Biggs,  Stanwood  v.  Sterling  Metal  Co.,  107 

50  Ark.  169,  §  242.  111.  App.  569,  §§  246,  247. 


Ixxx 


TABLE    OF   CASES   CITED 


Star  Co.  V.  Colver  Pub.  House  (U.  S. 

C.  ('..),  141  Fed.  129,  §  421. 
Starr    v.    Shepard,    145    Mich.    302, 

§301. 
Starr    v.    Trustees    of    Rochester,    6 

WcikI.  (N.  Y.)  564,  §  154. 
State.     See  name  of. 
State     (ex    rel.     Railroad    Commis- 
sioner)    V.     Adams     Express    Co. 

(Ind.,  1908),  83  N.  E.  337,  85  N.  E. 

966,  §§  2,  43,  48. 
State  (ex  rel.  Railroad  &  Warehouse 

Commission)    v.    Adams    Express 

Co.,  66  Minn.  271,  §§  110,  139. 
State  (Crow)  v.  ^Etna  Ins.  Co.,  150 

Mo.  113,  §  16. 
State  V.  American  Book  Co.,  69  Kan. 

1,  §  236. 
State  (Childs)  v.  American  Sav.  &  L. 

Assoc,  64  Minn.  349,  §  251. 
State  V.  Association,  35  Ohio  St.  258, 

§387. 
State  V.  Association,  42  Ohio  St.  579, 

§387. 
State  (ex  inf.)  v.  Atchison,  Topeka  & 

Santa  Fe  Ry.  Co.,   176  Mo.  687, 

§§  382,  384,  386,  390. 
State  V.  Atkins,  64  Kan.  174,  §§  6,  27. 
State  V.  Atlantic  Coast  Line  Rd.  Co. 

(Fla.),  40  So.  875,  §  113. 
State  V.  Baltimore,  Ohio  &  Chicago 

Rd.  Co.,  120  Ind.  298,  §  447. 
State  (ex.  rel.  St.  Amand)  v.  Bank  of 

Commerce,  49  La.  Ann.  1060,  §  320. 
State  V.  Barron,  57  N.  H.  498,  §  387. 
State    (ex    rel.    Baltimore    &    Ohio 

Teleg.  Co.)  v.  Bell  Teleph.  Co.,  23 

Fed.  539,  §  371. 
State  (Lewis)  v.  Board  of  Freeholders 

of  Cumberland,  56  N.  J.  L.  416, 
§258. 
State  (ex  rel.  Hathaway)  v.  Board  of 

Health,  103  Mo.  22,  §  356. 
State  (ex  rel.  Norcross)  v.  Board  of 
Medical  Examiners,  10  Mont.  162, 
§348. 
State  V.  Boston  C.  &  M.  Rd.  Co.,  25 
Vt.  433,  §  386. 


State  V.  Boston  Rd.  Co.  (N.  H.),  74 

Atl.  542,  §  387. 
State  (Ranch)  v.  Bowles  Milling  Co., 

80  Fed.  161,  §  186. 
State   V.    Bridge    Co.,    85    Me.    17, 

§  387. 
State  (ex  rel.  Bridgeton)  v.  Bridge- 
ton  &  M.  Tract.  Co.,  63  N.  J.  L. 

592,  §  369. 
State   (ex  rel.  Oshkosh  A.  &  B.  R. 

Co.)    V.    Burnell,    104    Wis.    246, 

§370. 
State  V.  Canal  Co.,  23  Ohio  St.  121, 

§  387. 
State     V.     Chicago,     Burlington     & 

Quincy  Rd.  Co.,  71  Neb.  5,  §  368. 
State  (ex  rel.  Railroad  &  Warehouse 

Commission)   v.  Chicago,   Milwau- 
kee &  St.  Paul  Ry.  Co.,  38  Minn. 

281,  §§  113,  365. 
State   V.    Chicago    Northwestern   R. 

Co.,  83  Neb.  524,  §  368. 
State    (ex    inf.)    v.    Chicago,    Rock 

Island  &  Pacific  Ry.  Co.,  176  Mo. 

721,  §390. 
State    (ex    rel.    Milwaukee    Medical 

College)    V.   Chittenden,    127   Wis. 

468,  §§  8,  9,  92. 
State    (ex    rel.    Burke)    v.    Citizens' 

Bank,  51  La.  Ann.  426,  §  441. 
State    (ex  rel.   Gwynn)    v.   Citizens' 

Tel.  Co.,  61  S.  C.  98,  §  373. 
State  (ex  rel.  Crescent  City  Rd.  Co.) 

V.  City  Engineer,  49  La.  Ann.  676, 

§§  355,  357. 
State  V.  City  of  Topeka,  30  Kan.  653, 

§385. 
State  V.  Clark,  30  Wash.  439,  §  3. 
State  (ex  rel.  Thicbaud)  v.  Conners- 

ville  Natural  Gas  Co.,  163  Ind.  563, 

§§  354,  381. 
State  (ex  rel.  Burnham)  v.  Cornwall, 

97  Wis.  565,  §  379. 
State  V.  Cramer,  96  Mo.  75,  §  356. 
State  V.  Cronan,  23  Nev.  437,  §§  382, 

391. 
State    (ex  rel.   Kellogg)   v.  Currens, 
111  Wis.  431,  §  121. 


TABLE   OF  CASES   CITED 


Ixxxi 


State    (ex    rel.    Postal   Teleg.    Cable 

Co.)  V.  Delaware  &  Atl.  Tclcg.  & 

Teleph.  Co.,  47  Fed.  ()77,  §  371. 
State  V.  Denny,  118  Ind.  449,  §  3. 
State  (ex  rel.   Drake)   v.  Doyle,  40 

Wis.  175,  §  374. 
State  V.  Eastern  Coal  Co.  (R.  I.),  70 

Atl.  1,  §  432. 
State  V.  Elliott,  13  Utah,  200,  §§  382, 

389. 
State  (ex  rel.  Walker)  v.  Equitable 

Loan  &  Inv.  Assoc,  142  Mo.  325, 

§393. 
State  (ex  rel.  Phillips)  v.  Fidelity  & 

C.  Co.,  77  Iowa,  648,  §  386. 
State  (ex  rel.  Atty.  Gen.)  v.  Fidelity 

&  r.   Ins.   Co.,  49  Ohio  St.  440, 

§§386,  394. 
State  (ex  inf.)  Fireman's  Fund  Ins. 

Co.,  152  Mo.  1,  §§  444,  448.  452. 
State  V.   Fountain   (Del.,    1908),   69 

Atl.  926,  §  3. 
State  V.  Fremont,  Elkhorn  &  Missouri 

Valley  R.  Co.,  22  Neb.  313,  §  374. 
State  (ex  rel.)  v.  French  Lick  Springs 

Hotel,  42  Ind.  App.  282,  §  446. 
State  V.  Gas  Co.,  153  Ind.  483,  §  387. 
State    (ex   rel.    Pope)    v.    Germania 

Bank  of  St.  Paul,  106  Minn.  446, 

§312. 
State   V.    Gold-hait   (Ind.,    1909),   87 

N.  E.  133,  §  3. 
State    (ex    rel.    Great    Falls    Water 

works)  V.  Great  Falls  City  Coun- 
cil, 19  Mont.  518,  §§  343,  355. 
State  V.  Great  Northern  Ry.  Co.,  100 

Minn.  445,  §  116. 
State  (ex  rel.  Union  Elec.  Light  & 

Power  Co.)  v.  Grimm,  220  Mo.  483, 

§§389,  393. 
State  V.  Hartford  &  New  Haven  Rd. 

Co.,  29  Conn.  538,  §  432. 
State  (ex  rel.  Howard)  v.  Hartford 

St.  Ry.  Co.,  76  Conn.  174,  §§  354, 

369. 
State  (ex  rel.  St.  Louis  &  K.  R.  Co.) 

V.    Hirzel,    137    Mo.    435,    §§395, 

399,  401. 

P 


State  V.  Holden  (Holden  v.  Hardy), 

14  Utah,  71,  §  18. 
State  V.  Holmes,  60  Neb.  39,  §  301. 
State  V.  Hood,   15  Rich.  L.  (S.  C.) 

177,  §  224. 
State  (ex  rel.  Durner)  v.  Huegin,  110 

Wis.  189,  §  432. 
State  V.  International  &  G.   N.  R. 

Co.,  89  Tex.  562,  §  390. 
State  V.   Jacksonville  Terminal  Co., 

41  Fla.  377,  §§  348,  349,  377,  378, 

381. 
State  (ex  rel.  Smart)  v.  Kansas  City, 

S.  &  G.  R.  Co.,  51  La.  Ann.  200, 

§  368. 
State  (ex  rel.  Hershisher)  v.  Kincaid, 

23  Neb.  641,  §  356. 
State  (ex  rel.  Payne)  v.  Kinloch,  93 

Mo.  App.  349,  §  371. 
State  V.  Lancashire  Fire  Ins.  Co.,  66 

Ark.  466,  §  455. 
State   (ex  rel.   Baltimore,  Canton  & 

P.  B.  Ry.  Co.)  V.  Latrobe,  81  Md. 

222,  §§  343,  345,  355,  356,  357,  370. 
State  V.  Leischer,  117  Wis.  475,  §  391. 
State  V.  Lewis,  26  Utah,  120,  §  3. 
State  (ex  rel.  Crow)  v.  Lincoln  Trust 

Co.,  144  Mo.  562,  §  390. 
State  (ex  rel.  Chappens)  v.  Marmou- 

get,  104  La.  1,  §  398. 
State  V.  Mason  City  &  Fort  Dodge 

Ry.  Co.,  85  Iowa,  516,  §  349. 
State  V.  McKinney,  5  Nev.  194,  §  91. 
State    (ex  rel.    Burg)    v.   Milwaukee 

Medical  College,  128  Wis.  7,  §  355. 
State  (ex  rel.  Benedict)   v.   Mineral 

&   Land   Imp.   Co.,    108   La.    24), 

§364. 
State   (ex  rel.   Clapp)    v.   Minnesota 

Thresher  Mfg.  Co.,  40  Minn.  213, 

§382. 
State  (ex  inf.)  v.  Missouri  Pacific  Ry. 

Co.,  176  Mo.  718,  §  390. 
State  V.  Moore,  40  Neb.  854,  §  3. 
State  V.  Moore,  39  Ohio  St.  486,  §  358. 
State  V.  Moore,  23  Wash.  778,  §  397. 
State  (ex  rel.  Laclede  Gaslight  Co.)  v. 

Murphy,  130  Mo.  10,  §  357. 


Ixxxii  TABLE    OF   CASES   CITED 

State  V.  Nebraska  Teleph.  Co.,   127  State  v.  Republican  Valley  R.  Co., 

Iowa,   194,   §  394.  17  Neb.  647,  §§  353,  355. 

State  V.  Nebraska  Tel.  Co.,  17  Neb.  State     (ex    rel.    Immanuel    Presby. 

126,  §§  365,  442.  Church  v.  Riedy,  59  La.  Ann.  274, 

State  V.  Nelson,  52  Ohio  St.  88,  §§13,  §  363. 

14.  State  (ex  rel.  Mayer)  v.  Rightor,  40 

State  V.  New  York,  New  Haven  &  La.  Ann.  837,  §  396. 

Hartford   Ry.   Co.,   71    Conn.   43,  State    (ex  rel.   Fidelity   &  Casualty 

§  349.  Co.)     V.    Rotwitt,     18    Mont.    92, 

State    (ex   rel.    Waterbury)    v.    New  §  358. 

York,  New  Haven  &  Hartford  Ry.  State  v.  Seattle  Gas  &  Electric  Co., 

Co.,  81  Conn.  645,  §  369.  28  Wash.  488,  §§  385,  390. 

State    (ex    rel.   Watkins)    v.    North  State    (ex    rel.    Missouri    Pacific    R. 

American  Land  &  Timber  Co.,  106  Co.)    v.   Seay,    23   Mo.   App.   623, 

La.  621,  §  S3.  §  397. 

State  (ex  rel.  Atkinson)  v.  Northern  State  (ex  rel.  Henscn)  v.  Sheppard, 

Pac.  Ry.  Co.,  53  Wash.  673,  §  26.  192  Mo.  497,  §  3. 

State  v.  Pacific  Brewing  &  Malting  State  v.  Sioux  City  &  P.  Rd.  Co.,  7 

Co.,  21  Wash.  451,  §  441.  Neb.  357,  §  345. 

State  (ex  rel.  Dawson)  v.  Parsons  St.  State  v.  Skeggs  (Ala.,  1908),  46  So. 

Ry.  &  Electrical  Co.  (Kan.),  105  268,  §3. 

Pac.  704,  §  369.  State  (ex  rel.  Vannata)  v.  Smith,  61 

State  V.   Paterson,   etc.,   R.   Co.,   43  N.  J.  L.  188,  §  361. 

N.  J.  L.  505,  §§  348,  355.  State  v.  Southern  Ry.  Co.,  141  N.  C. 

State    (ex    rel.    Richards)    v.    Pitts-  846,  §  99. 

burg,    Chicago,    Cincinnati    &    St.  State   (ex  rel.   North  Carolina  Corp. 

Louis  Rd.  Co.,  52  Ohio  St.  1,  §  385.  Commission   &   Hart-Ward   Hard- 
State  V.  Portage  City  Water  Co.,  107  ware  Co.)  v.  Southern  Ry.  Co.,  147 

Wis.  441,  §  384.  N.  C.  483,  §  140. 

State   (ex  rel.  Snyder)    v.   Portland  State  (ex  rel.  Grinsfelder)  v.  Spokane 

Natural  Gas  &  Oil  Co.,  153  Ind.  Street    R.    Co.,     19    Wash.    518, 

483,  §432.  §§369,  376. 

State  (ex  rel.  Minneapolis,  St.  Paul  &  State  v.  Standard  Oil  Co.,  218  Mo.  1, 

Sault  Ste.  Marie  Ry.  Co.)  v.  Rail-  §§  389,  391,  393. 

road   Commission,    137    Wis.    117,  State  v.  Standard  Oil  Co.,  49  Ohio 

§§  111,  116,  121,  141.  St.  137,  §§  224,  225,  432. 

State  (ex  rel.  Northern  Pac.  Ry.  Co.)  State  v.   Standard   Oil  Co.   of   Ky., 

V.    Railroad    Commission    (Wis.),  120  Tenn.  86,  §  384. 

121  N.  W.  919,  §§  7,  25,  121,  141.  State  v.  Stearns,  11  Neb.  104,  §  368. 

State  V.  Railway,  36  Minn.  246,  §  387.  State  v.  Stebbins,  1  Stew.  (Ala.)  20, 

State  V.  Real  Estate  Bank,  5  Ark.  §  224. 

595,  §  386.  State   v.   Superior  Court,   50  Wash. 

State  (ex  rel.   Morgan,  Assessor)  v.  650,  §  397. 

Real  Estate  Bldg.  &  Loan  Assoc,  State  v.  Superior  Court,   51   Wash. 

151  Ind.  502,  §§  348,  362,  375,  378.  572,  §  397. 

State  v.  Redinon,  134  Wis.  89,  §  3.  State    (ex    rel.    Stcubenville    Gas    & 

State    V.    Republican    River    Bridge  Elec.  Co.)  v.  Taylor,  55  Ohio  St. 

Co.,  20  Kan.  404,  §  355.  61,  §§  356,  358. 


TABLE   OF  CASES   CITED 


Ixxxiii 


State  V.  Teal,  72  Minn.  37,  §  356. 
State   (ex  rel.   McNamee)   v.  Tobie, 

194  Mo.  14,  §  35)7. 
State  V.  Toledo  &  Lucas  County  Bur- 
ial Assoc,  28  Ohio  Cir.  Ct.  R.  397, 

§246. 
State   V.   Toledo   Railway   &    Light 

Co.,    23    Ohio    Cir.    Ct.    R.    603, 

§388. 
State  V.  Tower,  185  Mo.  79,  §  13. 
State  (ex  rel.  Hinde)  v.  United  States 

Fidelity  &  Guaranty  Co.,  135  Mo. 

App.  160,  §  320. 
State  V.  Vermont  Cent.  Rd.  Co.,  27 

Vt.  103,  §§446,447. 
State  (Brousard)  v.  Voorhies,  51  La. 

Ann.  500,  §  399. 
State  (ex  rel.  Townsend)  v.  Ward,  70 

Minn.  58,  72  N.  W.  S25,  §  397. 
State  (ex  rel.  Krutz)  v.  Washington 

Irrig.  Co.,  41  Wash.  283,  §  348. 
State    V.    Western    North    Carolina 

Rd.  Co.,  95  N.  C.  602,  §  447. 
State  (ex  rel.  Gottlieb)   v.  Western 

Union  Teleg.   Co.,    165    Me.    502, 

§442. 
State  V.  West  Jersey  Traction  Co., 

62  N.  J.  L.  386,  §  93. 
State  (ex  rel.  Buckley)  v.  Whited  & 

Whiless,  104  La.  125,  §  441. 
State   (ex  rel.   Missouri  Pacific   Ry. 

Co.)    V.    Williams,    221    Mo.    227, 

§399. 
State  (ex  rel.  Jones)  v.  Williams,  54 

Neb.   154,   §§  348,  363. 
State  (ex  rel.  Board  of  Ry.  Commrs.) 

V.  Wilmington  &  Weldon  Ry.  Co., 

122  N.  C.  877,  §§  112,  140. 
State   (ex  rel.  Caldwell)   v.   Wilson, 

121  N.  C.  425,  §  140. 
State  V.  Wrightsville  &  T.  Rd.  Co., 

104  Ga.  437,  §  110. 
State  (ex  rel.)  v.  Zanesville,  etc.,  T. 

P.  Co.,  16  Ohio  St.  308,  §  355. 
State   Freight   Tax   Case,    15   Wall. 

(82  U.  S.)  232,  §§  44,  61. 
State  Railroad   Commission  v.  Wil- 
mington, 122  N.  C.  877,  §  140. 


State  Railroad  Tax  Cases,  92  U.  S. 

575,  §  123. 
State  Security  Bank  v.  Hoskins,  130 

Iowa,  339,  §  247. 
Steamship  C-o.  v.  Tugman,  106  U.  S. 

122,  §  218. 
Stearns  v.  Minnesota,  179  U.  S.  223, 

§  23. 
Steljbins   v.    Perry  County,    167   111. 

567,  §§  303,  436. 
Steel  V.  Smelting  Co.,  106  U.  S.  447, 

§  129. 
Steenerson  v.  Great  Northern  R.  Co., 

69  Minn.  353,  §§5,  145. 
Stehmeyer  v.   Charleston,    53  S.    C. 

259,  §§  7,  8. 
Steigleder  v.  McQuestin,    198  U.  S. 

141,  §  195. 
Steinhauer  v.  Colmar,  11  Colo.  App. 

494,  §  239. 
Stein  way.    In    re,     159    N.    Y.  205, 

§441. 
Stevenson    v.    Marble,    84    Fed.    23, 

§  436. 
Stewart  v.  Northern  Assur.  Co.,  45 

W.  Va.  734,  §  88. 
Stewart  v.  Railroad  Commissioners, 

160  N.  Y.  202,  §  154. 
Stewart  v.  Sonneborn,  98  U.  S.  187, 

§336. 
Stewart    v.    Washington    &    Alaska 

Min.  Co.,  187  U.  S.  466,  §  404. 
Stockton  V.  Atlantic  Highlands,   R. 

B.  &  L.  B.  E.  R.  Co.,  53  N.  J.  Eq. 

418,  §§  242,  251. 
Stoddard  v.   Lurn,    159   N.  Y.   265, 

§§  284,  286. 
Stone  V.  Crocker,  24  Pick.  81,  §  336. 
Stone  V.  Kellogg,  165  111.  192,  §  441. 
Stone  V.  South  Carolina,   117  U.  S. 

432,  §  220. 
Stone    V.    Southern    Illinois    Bridge 

Co.,  206  U.  S.  267,  §  56. 
Stonega  Coal  &  Coke  Co.  v.  Louis- 
ville &  N.  R.  Co.,   139  Fed.  271, 

§178. 
Stout   V.    Hubbell,    104    Iowa,    499, 

§297. 


Ixxxiv 


TABLE   OF   CAS£}S   CITED 


Strain  v.  Chicago  Portrait  Co.,   126 

U.  S.  831,  §  181. 
Strang  v.  Richmond,  P.  &  C.  R.  Co., 

93  Fed.  71,  §  406. 
Stranahan  Brothers  Catering  Co.  v. 

Colt,  55  Ohio  St.  398,  §  317. 
Strasburg,  Town  of,  v.  Winchester  & 

Strasburg    R.    Co.,    94    Va.    647, 

§347. 
Stratton  v.  Morris,  5  Pick.  (89  Tenn.) 

497,  §  3. 
Stratton's    Independence    v.    Dines, 

135  Fed.  449,   §  339. 
Strunk   v.    Owen,    199    Pa.    St.    73, 

§263. 
Stuart  V.  Hayden,  169  U.  S.  1,  §  277. 
Su'uurban    Light    &    Power    Co.    v. 

15oard  of  Aldermen  of  Boston,  153 

Mass.  200,  §  358. 
Sullivan  V.  Ayer,  174  Fed.  199,  §  189. 
Sullivan  v.  Hall,  86  Mich.  7,  §  91. 
Sullivan  v.  Sullivan  Timber  Co.,  103 

Ala.  11,  §  181. 
Sullivan    County    Railroad    v.    Con- 
necticut   River    Lumber    Co.,    76 

Conn.  464,  §  239. 
Sulphur  Mines  Co.  v.  Thompson,  93 

Va.  293,  §  315. 
Summers  v.  Railroad,  138  N.  C.  295, 

§110. 
Sunderland   Bros.   v.  Chicago,   R.   I. 

&  P.  Ry.  Co.,  158  Fed.  877,  §  209. 
Sun  Printing  &  Publishing  Assoc,  v. 

Edwards,  194  U.  S.  377,  §  178. 
Supervisors  of  Niagara  v.  People,  7 

Hill  (N.  Y.),  504,  §  224. 
Supreme    Lodge    Knights    of    P.    v. 

Hill,  76  Fed.  468,  §211. 
Supreme    Lodge    Knights    of    P.    v. 

Weller,  93  Va.  605,  §  254. 
Supreme   Sitting    of    Order    of    Iron 

Hall  V.  Baker,  134  Ind.  293,  §  302. 
Sutherland-Innes  Co.  v.  Chaney,  72 

Ark.  327,  §  236. 
Swan  Land  &  Cattle  Co.  v.  Frank, 

148  U.  S.  603,  §§  228,  307. 
Swartz    V.    Christie    Grain    &    Stock 

Co..  166  Fed.  338,  §  181. 


Sweeney  v.  Carter  Oil  Co.,  199  U.  S. 

252,  §  183. 
Sweet  V.  Barney,  23  N.  Y.  335,  §  243. 
Swift  V.  Little,  28  R.  I.  108,  §  236. 
Swift  &  Co.   V.   United  States,   196 

U.  S.  375,  §  457. 
Swing  V.   Weston  Lumber  Co.,  205 

U.  S.  275,  §§  16,  19. 


Tabor  v.  Goss  &  P.  Mfg.  Co.,  11  Colo. 

419,  §  290. 
Tacoma  Hotel  Co.  v.  Tacema  Land 

Co.,  3  Wash.  316,  §  373. 
Taff  Vale  Ry.  Co.,  In  re,  11  Ry.  & 

Can.  Traff.  Cas.  89,  §  113. 
Taggart  v.  Newport  St.  Ry.  Co.,  16 

R.  I.  668,  §  242. 
Tallasee  Falls   Mfg.   Co.   v.   Western 

Ry.    of    Alabama,    117    Ala.    520, 

§  319. 
Tampa  Water  Works  v.  Tampa,  199 

U.  S.  241,  §  37. 
Tanner  v.  Nichols,  25  Ky.  1,  §  247. 
Taylor  v.  Cummings   (U.  S.  C.  C), 

127  Fed.  108,  §§  288,  295. 
Taylor   v.    Holmes,    127   U.   S.   489, 

§§  302,  305. 
Taylor  v.  Illinois  Cent.   R.  Co.,  89 

Fed.  119,  §  198. 
Taylor  v.  Louisville  &  Nashville  R. 

Co.,  88  Fed.  350,  §  198. 
Taylor  v.  Portsmouth,  K.  &  Y.  St. 

Ry.  Co.,  91  Me.  193,  §§  242,  247, 

249. 
Teachout     v.     Des     Moines     Broad 

Gauge  Street   Rd.   Co.,   75   Iowa, 

722,  §  268. 
Tehan     v.     Brown,     191     Mass.    92, 

§  399. 
Telegram    Newspaper    Co.    v.    Com- 
monwealth,  172  Mass.  294,   §  444. 
Telegraph   Co.   v.   Texas,    105  U.  S. 

460,  §  442. 
Telluride  Power  Transmission  Co.  v. 

Rio  Grande  Western  Ry.  Co.,  175 

U.  S.  639,  §§158,  209. 


TABLE    OF   CASES   CITED 


Ixxxv 


Telluridc   Power  Trans.   Co.    v.    Rio 

Grande     Western     Ky.     Co.,     1S7 

U.  S.  5(j'J,  §  21'J. 
Telzer    v.    Brooklyn    Elevated    lid. 

Co.,  113  N.  Y.  Supp.  18,  §8U. 
Ten  Eyck  v.  Pontiac  O.  &  P.  A.  R. 

Co.,  114  Mich.  494,  §417. 
Tennessee    v.     Union     &    Planters' 

Bank,  152  U.  S.  454,  §  205. 
Tennessee  v.  Whitworth,   117  U.  S. 

139,  §  79. 
Tennessee  Automatic  Lighting  Co.  v. 

Massey  (Tenn.  Ch.  App.,  1899),  56 

S.  W.  35,  §  246. 
Terre  Haute  &  I.  R.  Co.  v.  Peoria  & 

P.  M.  R.  Co.,  167  111.  296,  §  249. 
Territoiy  (ex  rel.  Crosby)  v.  Crum, 

13  Okla.  9,  §  348. 
Terry  v.  Little,  101  U.  S.  216,  §  278. 
Texas   &   New   Orleans   Rd.   Co.   v. 

Sabine  Tram.  Co.  (Tex.  Civ.  App., 

1909),  121  S.  W   256,  §  151. 
Texas  &  Pacific  Ry.  Co.  v.  .\bilene 

Cotton  Oil  Co.,  204  U.  S.  426,  §  133. 
Texas  &  Pacific  Ry.  Co.  v.  Bloom, 

164  U.  S.  636,  §  318. 
Texas   &   Pacific   Ry.   Co.    v.   Cisco 

Oil  Mill  Co.,  204  U.  S.  449,  §  46. 
Texas  &  Pacific  Ry.  Co.  v.  Cox,  145 

U.  S.  593,  §  201. 
Texas  &  Pacific  Ry.  Co.  v.  Eastin  & 
'  Knox,  214  U.  S.  153,  §§  218,  220. 
Texas  &   Pacific   Ry.   Co.   v.   Inter- 
state Commerce  Commission,    162 

U.  S.  197,  §§  103,  106. 
Texas  &  Pacific  Ry.  Co.  v.  Johnson, 

151  U.  S.  81,  §  318. 
Texas   &   Pacific   Ry.   Co.    v.    Kirk, 

115  U.  S.  1,  §  205. 
Thomas    v.    Board    of    Trustees    of 

Ohio  State  University,   195  U.  S. 

207,   §§  174,   175,  177,  200,  200. 
Thomas  v.  Cincinnati,   N.   O.   &  T. 

P.  R.  Co.,  91  Fed.  195,  §  417. 
Thomas  v.  Dakin,  22  Wend.  (N.  Y.) 

9,  §  227. 
Thomas    v.    Inter-County    St.    Ry. 

Co.,  167  Pa.  St.  120,  §  242. 


Thomas  v.   Railroad  Co.,   101   U.  S. 

71,  §223. 
Thomas    &    Barton   Co.    v.    Thomas 

(U.    S.    C.    C.    A.),    165   Fed.    29, 

§266. 
Thompson     v.     Allen    County,     115 

U.  S.  550,  §  123. 
Thompson  v.  Knight,  77  N.  Y.  Supp. 

599,  §  278. 
Thompson    v.    Lewiston    Daily   Sun 

Pub.  Co.,  91  Me.  203,  §  335. 
Thompson  v.   Pfeifer,   60  Kan.  409, 

§  307. 
Thompson  v.  Phcenix  Ins.  Co.,   L36 

U.  S.  287,  §  412. 
Thompson    v.    Whittaker    Iron    Co., 

41  W.  Va.  574,  §  163. 
Thompson    Co.    v.    Whitehead,    185 

111.  454,  §  236. 
Thorpe  v.  Rutland  &  B.  R.  Co.,  27 

Vt.  140,  §  3. 
Tide  Water  Pipe  Co.  v.  State  Board 

of    .\ssessors,    57    N.    J.    L.    516, 

§  175. 
Tide  Water  Quarry  Co.  v.  Scott,  105 

Va.  160,  §  319. 
Tide   Water  Ry.   Co.    v.    Hurt,    109 

Va.  204,  §§437,  438. 
Tift  v.  Quaker  City  National  Bank, 

141  Pa.  St.  550,  §  259. 
Tift  V.  Southern  Ry.  Co.,   138  Fed. 

753,  §  106. 
Tift  V.  Southern  Ry.  Co.,  123  Fed. 

789,  §  209. 
Tindal   v.    Wesley,    107    U.   S.    204, 

§  155. 
Tobias  v.  Perry,  54  N.  Y.  Supp.  716, 

§89. 
Todd's  Case,  13  How.  (54  U.  S.)  52, 

§137. 
Toledo,  A.  A.  &  N.  M.  Ry.  Co.  v. 

Pennsylvania    Co.,    54    Fed.    730, 

§209. 
Toledo    &    Ohio    Cent.    Ry.    Co.    v. 

Marsh,   17  Ohio  Cir.   Ct.   R.   379, 

§319. 
Toledo     Computing     Scale     Co.     v. 

Young,  16  Idaho,  187,  §  24S. 


Ixxxvi 


TABLE    OF   CASES    CITED 


Toledo,  S.  &  M.  R.  Co.  V.  East,  Sa- 

inaw  &  St.  C.  R.  Co.,  72  Mich.  20G, 

§127. 
Toledo,  St.  Louis  &  K.  C.  R.  Co.  v. 

Continental    Trust    Co.,    95    Fed. 

497,  §415. 
Toledo,  Wabash  &  Western  Ry.  Co. 

V.  Harmon,  47  III.  298,  §  317. 
Tomlinson  v.  Branch,   15  Wall.   (S2 

U.  S.)  460,  §  79. 
Tomlinson  v.   Jessup,    15   Wall.    (S2 

U.  S.)  454,  §  23. 
Tompkins  v.  Sperry,  Jones  &  Co.,  96 

Md.  500,  §  259. 
Topeka,  City  of,  v.  Topeka  Water 

Co.,  58  Kan.  349,  §  373. 
Town.     See  name  of. 
Town  of  Harlem  v.  Emmert,  41  111. 

319,  §  332. 
Trammell  v.  Dinsmore,  102  Fed.  794, 

§  149. 
Transportation  Co.   v.   Parkersburg, 

107  U.  S.  691,  §  421. 
Trapp  V.  Du  Bois,  78  N.  Y.  Supp. 

505,  §  335. 
Tri.sconi  v.  Winship,  43  La.  Ann.  45, 

§  266. 
Troutman  v.  Council  Bluffs  St.  Fair 

&  Carnival  Co.  (Iowa,  1909),  120 

N.  W.  730,  §  302. 
Truckee  &  Tahoe  Turnpike  R.  Co.  v. 

Campbell,  44  Cal.  89,  §  247. 
Trust  Company  v.  Floyd,  47  Ohio  St. 

525,  §  261. 
Tucker   v.    Fergu.son,    22   Wall.    (89 

U.  S.)  527,  §  23. 
Tulare  Irrigation  District  v.  Shepard, 

185  U.  S.  1,  §  245. 
TuUis  V.  Lake  Erie  &  Western  Ry. 

Co.,  175  U.  S.  348,  §§  14,  26. 
Tully,  In  re,  156  Fed.  634,  §  82. 
TurnbuU  v.  Ross,  141  Fed.  649,  §  195. 
Turner   v.    Revere    Water   Co.,    171 

Mass.  329,  §  373. 
Turnpike  Co.  v.  State,  3  Wall.   (70 

U.  S.)  210,  §  421. 
Tu.scaloosa  Mfg.  Co.  v.  Williams,  127 

Ala.  110,  §432. 


Twelfth  St.  Market  Co.  v.  Phila- 
delphia &  Reading  R.  Co.,  142  Pa. 
St.  580,  §  247. 

Twenty-Third  St.  Ry.  Co.  v.  New 
York  State  Board  Tax  Commrs., 
199  U.  S.  53,  §§  23,  79. 

Tyroler  v.  Gummersback,  59  N.  Y. 
Supp.  319,  §  200. 

U 

Ulmer  v.  Lime  Rock  R.  Co.,  98  Me. 

579,  §  224. 
Underwood  v.   Newport  Lyceum,   I 

Fla.  129,  §§  .321,  328. 
Union  Bridge  Co.  v.  United  States, 

204  U.  S.  364,  §§44,  121. 
Union    Iron    Works    Co.    v.    Union 

Naval   Stores  Co.,    157   Ala.   645, 

§340. 
Union     Mutual     Life     Ins.     Co.     v. 

Thomas  (U.  S.  C.  C.  A.),  83  Fed. 

803,  §  335. 
Union  Pacific  R.  Co.  v.  Cheyenne, 

113  U.  S.  516,  §§  123,  167. 
Union  Pacific  R.  Co.  v.  Denver  & 

Rio  Grande  Rd.  Co.,  37  Fed.  179, 

§421. 
Union  Pac.  Rd.  Co.  v.  Hall,  91  U.  S. 

343,  §§  345,  368,  376. 
Union  Pac.  Rd.  Co.  v.  Mason  City  & 

Ft.  Dodge  Rd.  Co.,  199  U.  S.  166, 

§§  155,  419. 
Union   Pac.    Rd.   Co.    v.   Oregon   & 

Washington  Lumber  Mfg.'s  Assn., 

165  Fed.  13,  §  187. 
Union  Stock  Yards  National  Bank  v. 

Gillespie,  1.37  U.  S.  411,  §  163. 
Union  Transportation  Co.  v.  Bassett, 

118  Cal.  604,  §  125. 
Union  Trust  Co.  v.  Atchison,  Topeka 

&  S.  F.  R.  Co.,  8  N.  Mex.  327,  §  4 16. 
United  Glass  Co.  v.  Vary,  152  N.  Y. 

121,  §  307. 
United   Growers'   Co.  v.   Eisner,   47 

N.  Y.  Supp.  906,  §  247. 
United  Lead  Co.  v.  Reedy  Elevator 

Manuf.  Co.,  222  111.  199,  §  236. 


TABLE    OF   CASES   CITED 


Ixxxvii 


United  States  v.  Addyston  Pipe  & 

Steel  Co.,  83  Fed.  271,  §  403. 
United  States  v.  Ady,  76  Fed.  360, 

§  159. 
United    States    v.    Alaska    Packers' 

Assn.,  1  Alaska  R.  217,  §  446. 
United     States     v.     American     Bell 

Teleph.  Co.,  12S  U.  S.  315,  §  130. 
United  States  v.  Arredondo,  6  Pet. 

(31  U.  S.)  691,  §§  81,  82. 
United  States  v.  Beebe,  117  Fed.  670, 

§129. 
United  States  v.  Bell,  81  Fed.  830, 

§137. 
United  States  v.  Bitter  Root  Co.,  200 

U.  S.  451,  §§  163,  276. 
United  States  v.  California  &  Oregon 

Land  Co.,  148  U.  S.  31,  §  129. 
United   States   v.   Coombs,    12   Pet. 

(37  U.  S.)  72,  §  56. 
United  States  v.  Delaware  &  Hudson 

Co.,  213  U.  S.  366,  §§  14,  45,  49. 
United  States  v.  Duell,  172  U.  S.  576, 

§137. 
United  States  v.  Eaton,   144  U.  S. 

677,  §443. 
United  States  v.   Erie  R.  Co.,    166 

Fed.  352,  §42. 
United  States  v.  Ferreira,  13  How. 

(54  U.  S.)  40,  §  137. 
United  States  v.  Hoffman,  4  Wall. 

(71  U.  S.)  158,  §  398. 
United  States  v.  John  Kelso  Co.,  86 

Fed.  305,  §  446. 
United  States  v.  Joint  Traffic  Assoc, 

171  U.  S.  505,  §  137. 
United  States  v.  Lee,  106  U.  S.  196, 

§§  155,  250. 
United  States  v.  Lehigh  Valley  R. 

Co.,  115  Fed.  373,  §  137. 
United  States  v.  Marshall  Silver  Min. 

Co.,  129  U.  S.  579,  §  130. 
United  States  v.  Milliken  Imprinting 

Co.,  202  U.  S.  168,  §  412. 
United    States    v.     Milwaukee    Re- 
frigerator Co.,  142  Fed.  247,  §  225. 
United  States  v.  Minor,   114  U.  S. 

233,  §  129. 


United  States  v.  Missouri,  Kansas  & 

Texas  Ry.  Co.,  141  U.  S.  358,  §  130. 
United  States  v.  National  Exchange 

Bank  of  Providence,  214  U.  S.  302, 

§252. 
United     States     v.     New     Bedford 

Bridge,  1   Woodb.  &  Min.   (U.  S. 

C.  C.)  401,  Fed.  Cas.  No.  15,867, 

§197. 
United  States  v.  Oregon  R.  &  Nav. 

Co.,  163  Fed.  640,  §  28. 
United  States  v.  Rickert,  188  U.  S. 

438,  §  2. 
United  States  v.  Schura,   102  U.  S. 

378,  §§  130,  374. 
United  States  v.  Southern  Ry.  Co., 

104  Fed.  347,  §  26. 
United  States  v.  Standard  Oil  Co., 

148  Fed.  719,  §  244. 
United  States  v.  Sweeney,  95  Fed. 

434,  §  137. 
United  States  v.  Union  Bridge  Co., 

143  U.  S.  377,  §  92. 
United  States  v.  Union  Pacific  R.  R. 

Co.,  98  U.  S.  569,  §  252. 
United  States  v.  Wheeling  &  L.  E. 

R.  Co.,  167  Fed.  377,  §  26. 
United  States   (ex  rel.   Redfield)   v. 

Windom,  137  U.  S.  636,  §  348. 
United  States  Bank  v.  Lyon  County, 

46  Fed.  514,  §  163. 
United  States  Glass  Co.  v.   Levett, 

53  N.  Y.  Supp.  688,  §  307. 
United  States  Mortgage  Co.  v.  Mc- 

Clure,  42  Oreg.  190,  §  246. 
Utah- Nevada  Co.  v.  De  Lamar,  113 

Fed.  113,  §§  174,  181. 


Valcalda  v.  Silver  Peak  Mines  (U.  S. 

C.  C.  A.),  86  Fed.  90,  §  315. 
Valentine    v.    Police    Court    of    San 

Francisco,  141  Cal.  615,  §  39.). 
Vance  v.  Burbank,   101   U.  S.   514, 

§129. 
Vance  v.  Erie  Ry.,  32  N.  J.  L.  334, 

§336. 


Ixxxviii 


TABLE    OF   CASES    CITED 


Vance  v.  Vanderhook  Co.,  170  U.  S. 

438,  §§  11,  51,  53. 
Van  Cleve  v.  Berkey,  143  Mo.  109, 

§  294. 
Van  Cott  V.  Van  Brunt,  82  N.  Y.  535, 

§293. 
Van  Dresser  v.   Oregon  R.  &  Nav. 

Co.,  48  Fed.  202,  §  181. 
Van  Frank  v.  St.  Louis,  C,  G.  &  Ft. 

S.    Ry.    Co.,    93    Mo.    App.    412, 

§§416,  417. 
Van  Leuven  v.  First  Nat.  Bank  of 

Kingston,  54  N.  Y.  651,  §  340. 
Van    Sicklen    v.    Jamaica    Electric 

Light  Co.,  61  N.  Y.  Supp.  210,  §  317. 
Vara  v.  R.  M.  Quigley  Construction 

Co.,  114  La.  261,  §  217. 
Vardeman  v.   Penn.   Mut.   Ins.  Co., 

125  Ga.  117,  §  412. 
Veazie  v.  Moor,  14  How.  (55  U.  S.) 

568,  §  56. 
Venner  v.  Fitzgerald  (U.  S.  C.  C),  91 

Fed.  335,  §  253. 
Vermont  Mut.  Life  Ins.  Co.  v.  Cum- 

mings,  11  Vt.  503,  §  326. 
Village.     See  name  of. 
Vinas  v.  Merchants'  Mutual  Ins.  Co. 

of  New  Orleans,  27  La.  Ann.  367, 

§335. 
Virginia  Coupon  Cases,  114  U.  S.  270, 

§§  123,  155. 
Virginia  Passenger  &  Power  Co.  v. 

Fisher,  104  Va.  121,  §  302. 
Vitagraph  Co.  of  America  v.  Twenti- 
eth   Century    Optiscope    Co.,    157 

Fed.  699,  §  236. 
Vogt  V.  Vogt,  104  N.  Y.  Supp.  164, 

§339. 
Von  Au  V.  Magenheimer,  110  N.  Y. 

Supp.  629,  §§261,  263. 
Vose  V.  Bronson,  6  Wall.  (73  U.  S.) 

452,  §417. 

W 

Waaler  v.  Great  Northern  Ry.  Co., 

18  S.  Dak.  420,  §  317. 
Wabash   Ry.    Co.    v.    Defiance,    167 

U.  S.  88,  §§  21,  24. 


Wabash  Ry.  Co.  v.  Lumley,  96  Fed. 

773,  §412. 
Wabash,  tit.  Louis  &  Pac.  Ry.  Co.  v. 

lUinois,  118  U.  S.  557,  §§  40,  43, 

44,  46,  47. 
Wabash  Western  Ry.  Co.  v.  Brow, 

164  U.  S.  271,  §  201. 
Waite    V.    Dowley,    94    U.    S.    527, 

§§  65,  71. 
Waite  V.  Santa  Cruz,  184  U.  S.  302, 

§§  194,  195. 
Waldron  v.  Harvey,  54  W.  Va.  608, 

§167. 
Walker  v.  Bacon,  11  Idaho,  127,  §  7. 
Walker  v.  Brown,  63  Fed.  204,  §  239. 
Walker  v.  Devereaux,  4  Paige  (N.  Y.), 

225,  §402. 
Walker  v.   Equitable   Loan   &   Inv. 

A.SSOC.,  142  Mo.  325,  §  389. 
Walker  v.  Hannibal  &  St.  Joseph  Rd. 

Co.,  121  Mo.  575,  §  317. 
Walker    v.    Southeastern    Railway, 

L.  R.  5  C.  P.  640,  §  336. 
Wall  V.  Chesapeake  &  Ohio  Ry.  Co., 

95  Fed.  398,  §  182. 
Wallace  v.  City  of  Reno,  27  Nev.  71, 

§3. 
Wallace  v.  John  Casey  Co.,  116  N.  Y. 

Supp.  394,  §  317. 
Wallace   v.    Lincoln   Savings    Bank, 

89  Tenn.  630,  §§  261,  263,  301,  302, 

304. 
Walling  V.  Michigan,  116  U.  S.  446, 

§§  S,  44. 
Walpole  V.  Smith,  4  Blackf.   (Ind.) 

304,  §  341. 
Walston  V.  Nevin,  128  U.  S.  578,  §  13. 
Walton  V.  Coe,  110  N.  Y.  109,  §  307. 
Walton  V.  Oliver,  49  Kan.  107,  §  265. 
Ward   V.    Hotel   Randolph  Co.    (W. 

Va.,  1909),  63  S.  E.  613,  §  302. 
Ward  V.  Joslin,  186  U.  S.  142,  §  284. 
Warden  v.  R.  R.  Co.,  103  U.  S.  651, 

§271. 
War  Eagle  Con.  Min.  Co.  v.  Dickie, 

14  Idaho,  534,  §  236. 
Waring  v.  Catawba  Co.,  2  Bay  (S.  C), 

109,  §321. 


TABLE   OF  CASES   CITED 


Ixxxix 


Warren,  In  re,  52  Mich.  557,  §  284. 
Warren  v.  Van  Brunt,  10  Wall.  (86 

U.  S.)  646,  §  129. 
Washer  v.  Bullitt  County,  110  U.  S. 

558,  §56. 
Washington  Light  Gas  Co.  v.  Lans- 

den,  172  U.  S.  534,  §  444. 
Washington  Market  Co.   v.  District 

of    Columbia,     172     U.     S.     361, 

§163. 
Washington     Star     Mining     Co.     v. 

P'ulton,  205  U.  S.  60,  §  18. 
Waterman  v.  Canal-Louisiana  Bank 

&  Trust  Co.,  215  U.  S.  33,  §§  162, 

166,  169,  198. 
WateKs  V.  Mobile  &  Ohio  Rd.  Co.,  74 

Miss.  534,  §  319. 
Waters  v.  Waters  &  Co.,  115  N.  Y. 

Supp.  432,  §  268. 
Waters-Pierce  Oil  Co.  v.  Texas,  177 

U.  S.  28,  §  19. 
Waters-Pierce  Oil  Co.  v.  Texas,  212 

U.   S.   86,    §§  158,    209,   444,   454, 

455,  456. 
Water  town    Paper   Co.,    In    re,    169 

Fed.  (C.  C.  A.)  252,  §  226. 
Watkins,  Ex  parte,  3  Pet.  (28  U.  S.) 

193,  §  82. 
Watson    V.    Fairmont    &    Suburban 

Ry.  Co.,  49  W.  Va.  528,  §  426. 
Watson  V.  St.  Louis,  I.  M.  &  S.  Ry. 

Co.   (U.  S.  C.  C),   169  Fed.  942, 

§26. 
Watson,  In  re,  17  S.  Dak.  486,  §  3. 
Weatherford  Mineral  Wells  &  North- 
western  Rd.    Co.    V.    Granger,   86 

Tex.  350,   §  259. 
Webb  V.  Ridgely,  38  Md.  364,  §  402. 
Webster  v.  Columbian  Nat.  Life  Ins. 

Co.,  116  N.  Y.  Supp.  404,  131  App. 

Div.  837,  §423. 
Webster  v.  Common  Council  of  City 

of  San  Diego,  8  Cal.  C.  App.  480, 

§376. 
Webster  v.  Oliver  Ditson  Co.,   171 

Fed.  895,  §  413. 
Webster   Telephone   Case,    17    Neb. 

126,  §  442. 


Wechselberg  v.  Flour  City  Bank,  64 

Fed.  90,  §  265. 
Wechselberg  v.  Flour  City  National 

Bank,  65  Fed.  94,  §  278. 
Wecker    v.    National    Enameling    & 

Stamping    Co.,    204    U.    S.    176, 

§215. 
Weems   Steamboat   Co.    v.    People's 

Co.,  214  U.  S.  345,  §421. 
Weetjen  v.  St.  Paul  &  P.  R.  Co.,  4 

Hun  (N.  Y.),  529,  §  416. 
Weidman  v.  Sibley,  44  N.  Y.  Supp. 

1057,  §  89. 
Weihenmeyer  v.  Bitner,  88  Md.  325, 

§§  362,  441. 
Weinburgh  v.  Union  St.  Ry.  A.  Co., 

55  N.  J.  Eq.  640,  §  402. 
Weir  V.  Bay  State  Gas  Co.   (U.  S. 

C.  C),  91  Fed.  940,  §  310. 
Weir     Furnace     Co.     v.     Aushutz- 

Bradberry  Co.,  10  Pa.  Dist.  Rep. 

St.,  31  Pitts.  Leg.  J.   (N.  S.)  200, 

§304. 
Weiss  V.   Musical  Protective  Union 

(Pa.),   29  Pitts.   L.   J.    (N.  S.)    1, 

§361. 
Welch  V.  Concord  Railroad,  68  N.  II. 

206,  §  332. 
Welch  V.  Passaic  Hospital,  59  N.  J. 

L.  142,  §  361. 
Wells  V.  Dane,  101  Mo.  67,   §§  263, 

301. 
Wells  Co.   V.   Gastonia  Cotton  Mfg. 

Co.,  198  U.  S.  177,  §  246. 
Welston  Coal  Co.  v.  Franklin  Paper 

Co.,  57  Ohio  St.  182,  §  321. 
Welton  V.   Missouri,   91    U.  S.   275, 

§44. 
Wertheimer  v.  Wells,  Fargo  &  Co., 

112  N.  Y.  Supp.  1062,  §  243. 
West    Chicago    Street    Rd.    Co.    v. 

Chicago,  201  U.  S.  506,  §§  22,  25. 
Westerly  v.  Westerly  Water  Works, 

76  Fed.  467,  §  160. 
Western  v.  Genesee  Mutual  Ins.  Co., 

12  N.  Y.  258,  §  17. 
Western    Assur.    Co.    v.    Ward,    75 

Fed.  338,  §  163. 


xc 


TABLE    OF   CASES    CITED 


Western  Bank  &  Trust  Co.,  In  re 
(U.  S.  D.  C),  163  Fed.  7i;i,  §247. 

Western  Loan  &  Sav.  Co.  v.  Butte  & 
Boston  Mining  Co.,  210  U.  S.  3(jS, 
§§201,  202,  200. 

Western  Maryland  Co.  v.  Hchawn, 
97  Md.  503,  §319. 

Western  Mass.  F.  Ins.  Co.  v.  Hilton, 
58  N.  Y.  Supp.  996,  §  17. 

Western  Meat  ('o.  v.  Superior  Court, 
9  Cal.  App.  538,  §  397. 

Western  National  Bank  of  N.  Y.  v. 
Lawrence,  117  Mich.  669,  §  286. 

Western  News  Co.  v.  Wilmarth,  33 
Kan.  510,  §  337. 

Western  New  York  &  Pennsylvania 
Rd.  Co.  V.  Penn  Refining  Co.,  137 
Fed.  343,  §  137. 

Western  Turf  Assoc,  v.  Grienberg, 
204  U.  S.  359,  §  208. 

Western  Union  Teleg.  Co.  v.  Amer- 
ican Union  Teleg.  Co.,  65  Ga.  160, 
§427. 

Western  Union  Teleg.  Co.  v.  Andrews, 
216  U.  S.  165,  §§250,  430. 

Western  Union  Teleg.  Co.  v.  Attor- 
ney General  of  Mass.,  125  U.  S. 
530,  §427. 

Western  Union  Teleg.  Co.  v.  Austin, 
67  Kan.  208,  §  98. 

Western  Union  Teleg.  Co.  v.  Balti- 
more &  Ohio  Rd.  Co.,  23  Fed. 
12,  §  427. 

Western  Union  Teleg.  Co.  v.  Call 
Pub.  Co.,  181  U.  S.  92,  §§  46,  442. 

Western  Union  Teleg.  Co.  v.  Call 
Pub.  Co.,  44  Neb.  326,  §  356: 

Western  Union  Teleg.  Co.  v.  City 
Council  of  Charleston,  56  Fed. 
419,  §442. 

Western  Union  Teleg.  Co.  v.  Clark, 
14  Tex.  Civ.  App.  563,  §  181. 

Western  Union  Teleg.  Co.  v.  James, 
162  U.  S.  650,  §§  8,  31,  55. 

Western  Union  Teleg.  Co.  v.  Kansas, 
216  U.  S.  1,  §75. 

Western  Union  Teleg.  Co.  v.  Massa- 
chusetts, 125  U.  S.  530,  §  75. 


Western  Union  Teleg.  Co.  v.  Mayor 
of  New  York,  38  Fed.  552,  §§8,  442. 

Western  Union  Teleg.  Co.  v.  Mc- 
Clelland (Ind.  App.,  1906),  78 
N.  E.  672,  §  442. 

Western  Union  Teleg.  Co.  v.  Missis- 
sippi Rd.  Commission,  74  Miss. 
80,  §  140. 

Western  Union  Teleg.  Co.  v.  Mis- 
souri ex  rel.  Gottlieb,  190  U.  S. 
412,  §  123. 

Western  Union  Teleg.  Co.  v.  Myatt, 
98  U.  S.  335,  §§  33,  97,  145,  155. 

Western  Union  Teleg.  C'o.  v.  New 
Brunswick  Ry.  C^o.,  N.  B.  Eq.  Cas. 
338,  §  427. 

Western  Union  Teleg.  Co.  v.  Pa- 
ducah  R.  Co.,  86  111.  246,  §  427. 

Western  Union  Teleg.  Co.  v.  Pen- 
dleton, 122  U.  S.  347,  §  31. 

Western  Union  Teleg.  Co.  v.  Penn- 
sylvania Rd.  Co.,  105  U.  S.  540, 
§46. 

Western  Union  Teleg.  Co.  v.  Rosen- 
treter,  80  Tex.  406,  §  442. 

Western  Union  Teleg.  Co.  v.  State, 
146  Ind.  54,  §  251. 

Western  Union  Teleg.  Co.  v.  State 
of  Mi.ssouri,   190  U.  S.  412,  §  442. 

Western  Union  Teleg.  Co.  v.  Wilson, 

213  U.  S.  52,  §§  55,  210. 
Western  Union  Trust  Co.  v.  Chiles, 

214  U.  S.  274,  §  208. 

West  Ham  Corp.  v.  Great  Eastern 
Ry.  Co.,  9  Ry.  &  Can.  Traff.  Cas. 
7,  §  120. 

Westinghouse  Air  Brake  Co.  v. 
Great  Northern  Ry.  Co.,  88  Fed. 
260,  §  182. 

West  Missouri  Land  Co.  v.  Kansas 
City  S.  B.  Co.,  161  Mo.  595,  §  247. 

Weston  V.  Charleston,  2  Pet.  (27 
U.  S.)  449,  §§  69,  72,  73. 

Weston  V.  City  Council  of  Charles- 
ton, 12  Wheat.  (27  U.  S.)  449, 
§§  69,  72. 

Wetzel  &  Tyler  Railway  v.  Tennis 
Bros.  Co.,  145  Fed.  458,  §  236. 


TABLE    OF   CASES   CITED 


XCl 


Weyeth    Hardware    &    M.    Co.    v. 

James-Spencer-Batcman     Co.,     15 

Utah,  110,  §  223. 
Whalcy    v.    Bankers'    Union    (Tex. 

Civ.   App.,   1905),  88   S.    W.    250, 

§246. 
Wheeler  v.  New  York,  New  Haven  & 

Hartford  Ry.  Co.,  178  U.  S.  321, 

§23. 
Wheeling    Bridge    &    T.    R.    Co.    v. 

Cilmore,  8  Ohio  C.  C.  658,  §  18. 
Whcclock    V.    Lee,    74    N.    Y.    495, 

§  200. 
Wheelwright  v.  St.  Louis,   N.  O.   & 

O.  Canal  &  T.  Co.,  50  Fed.  709, 

§415. 
Wheless    v.    Second    Nat.    Bank,    1 

Baxter  (Tenn.),  469,   §§  336,  337. 
Whitcomb  v.   Robbins,  69  Vt.  477, 

§  181. 
Whitcomb  v.  Smithson,    175   U.   S. 

635,  §  215. 
Whitcomb  v.  White,  214  U.  S.   15, 

§  129. 
White  V.  Green,  105  Iowa,  176,  §  282. 
White  V.  Hook,  87  xMd.  733,  §  291. 
White,  Corbin  &  Co.  v.  Jones,   167 

N.  Y.  158,  §  297. 
Whitehead     v.     Farmers'     Loan     & 

Trust  Co.,  98  Fed.  12,  §  123. 
Whiteman    v.    Wilmington    &    Sus- 
quehanna Rd.  Co.,  2  Harr.  (Del.) 

514,  §  330. 
Whitfield  v.  Mtna  Life  Ins.  Co.,  205 

U.  S.  489,  §§  16,  17,  19,  20. 
Whitfield  v.  Southeastern  Ry.,  Ell. 

B.  &  E.  115,  §  336. 
Whitlock  v.  Hawkins,  105  Va.  242, 

§3. 
Whitman  v.  Citizens'  Bank,  110  Fed. 

506,  §§  284,  286. 
Whitman  v.  Cox,  26  Me.  335,  §  257. 
Whitman  v.  Oxford  Nat.  Bank,  176 

U.  S.  559,  §  284. 
Whitney  v.  Hazard,  18  S.  Dak.  490, 

§301. 
Whitney  v.  Wyman,  101  U.  S.  392, 

§  265. 


Wichita  Nat.  Bank  v.  Smith,  72  Fed. 

568,  §  212. 
Wicjersha  v.  Crittenden,  93  Cal.  17, 

§  303. 
Wilcox  V.  Continental  Life  Ins.  Co., 

56  Conn.  468,  469,  §  239. 
Wilcox    &    Gibbes     Guano    Co.     v. 

Phcenix    Ins.    Co.,    60    Fed.    929, 

§218. 
Wilder    v.    McCormick,    2    Blatchf. 

(U.  S.  C.  C.)  31,  §  129. 
Willamette  Iron  Bridge  Co.  v.  Hatch, 

125  U.  S.  131,  §§  56,  445. 
Willcox    v.    Consolidated    Gas    Co., 

212  U.  S.    19,    §§  14,   33,   34,   36, 

38,  147,  148,  425. 
William    Deering    &   Co.    v.    Venne, 

7  N.  Dak.  576,  §  201. 
William  Grace  Co.  v.  Henry  Martin 

Brick   Mach.    Mfg.   Co.,    174   Fed. 

131,  §  182. 
Williams  v.  Chamberlain,  29  Ky.  L. 

Rep.  606,   §§  290,  308,  311. 
Williams    v.    Maysville    Telep.    Co., 

119  Ky.  33,  §  354. 
Williams    v.    Planters'    Ins.    Co.,    57 

Miss.  759,  §  336. 
Williamson  v.  Krohn,  66  Fed.  655, 

§180. 
Willis  V.  Kalmbach  (Va.,  1909),  64 

S.  E.  342,  §  3. 
Willis  V.  Mabon,  48  Minn.  140,  §  282. 
Willow  Springs  Irrig.   Dist.   v.   Wil- 
son, 74  Neb.  269,  §  321. 
Wills    V.    Nehalem    Coal    Co.    (Ore., 

1908),  96  Pac.  528,  §  259. 
Wilmington  &  W.  Rd.  Co.  v.  Als- 

brook,  146  U.  S.  279,  §  23. 
Wilmington,  City  of,  v.  Addicks,  7 

Del.  Ch.  56,  §  247. 
Wilmington   City    Ry.    Co.    v.    Wil- 
mington &  B.  S.  Ry.  Co.  (Del.  Ch., 

1900),  46  Atl.  12,  §  247. 
Wilmington    Mining   Co.    v.    Fulton, 

205  U.  S.  60,  §  26. 
Wilson     V.     Atlanta,     Knoxville     & 

Northern   Ry.   Co.,    115   Ga.    171, 

§82. 


XCll 


TABLE    OF   CASES    CITED 


Wilson    V.    Blackliird    Creek    Marsh 

Co.,  2  Pet.  (27  U.  8.)  245,  §  56. 
Wilson  V.   First  State  Bank  of  Jet- 
more,  77  Kan.  5S9,  §  240. 
Wilson     V.     Hundley,     96     Va.     96, 

§  283. 
Wilson  V.   Kings  Co.   Elevated  Rd. 

Co.,  114  N.  Y.  487,  §  320. 
Wiltse    V.    State    Road    Bridge   Co., 

63  Mich.  639,  §  317. 
Winch  V.  Tobin,  107  111.  212,  §  3. 
Winchester   v.    Corinna,    55    Me.    9, 

§3. 
Winchester  &  Strasburg  Rd.  Co.  v. 

Commonwealth,      106     Va.     264, 

§§  108,  111,381. 
Windsor  v.  McVeigh,  93  U.  S.  274, 

§156. 
Windsor  Glass  Co.  v.  Carnegie  Co., 

204  Pa.  St.  459,  §  247. 
Winfield  Nat.  Bank  v.  Railroad  Loan 

&    Savings    Assoc,    71    Kan.    58, 

§  319. 
Winn  V.  Wabash  R.  Co.,  118  Fed.  55, 

§180. 
Winn,  In  re,  213  U.  S.  458,  §§  201, 

206,  207,  346,  348,  374. 
Winnebago    Furniture    Mfg.    Co.    v. 

Wisconsin  Midland  R.  Co.,  81  Wis. 

389,  §  81. 
Winslow  V.   Baltimore  &  Ohio  Rd. 

Co.,  208  U.  S.  59,  §  127. 
Winters  v.  Hub.  Min.  Co.,  57  Fed. 

287,  §259. 
Wisconsin   &   Michigan   Ry.   Co.   v. 

Powers,  191  U.  S.  379,  §  23. 
Wisconsin  Marine  &  F.  Ins.  Co.  Bank 

v.  Mann,  100  Wis.  596,  §  412. 
Wishard   v.   Hansen,   99   Iowa,   307, 

§  294. 
Wishek  v.  Becker,   10  N.  Dak.  63, 

§384. 
Wisner,   Ex   parte,    203  U.   S.   449, 

§§201,  207. 
W.  L.  Wells  Co.  v.  Avon  Mills,  118 

Fed.  190,  §  247. 
Wolf  V.  Pennsylvania  Rd.  Co.,  195 

Pa.  St.  91,  §  302. 


Wong   Wing   v.   United   States,    163 

U.  S.  228,  §  100. 
Wood  V.  City  of  Auburn,  87  Me.  287, 

§373. 
Wood   V.   Detroit  City  Ry.   Co.,   52 

Mich.  402,  §  317. 
Wood  Co.  V.  Caldwell,  54  Ind.  270, 

§  236. 
Woodruff    V.    Howes,    88    Cal.    184, 

§268. 
Woods'  Sons  v.  Carl,  203  U.  S.  358, 

§18. 
Woodstock,  Hardwood  &  Spool  Mfg. 

Co.  v.  Charlestown  Light  &  Water 

Co.    (S.   C,    1909),   63   S.   E.   548, 

§334. 
Woodward   Lumber   Co.   v.    General 

Supply    &   Construction   Co.,    113 

N.  Y.  Supp.  628,  §  89. 
Woodworth  v.   Blair,    112  U.   S.  8, 

§  418. 
Woolfort   V.    Dixie   Cotton    Oil   Co., 

77  Ark.  203,  §  236. 
Worthington  v.  London  Guarantee  & 

Accident  Co.,  164  N.  Y.  81,  §  89. 
Wright  v.  Central  California  Water 

Co.,  67  Cal.  532,  §  402. 
Wright  V.   Cunningham,    115  Tenn. 

445,  §  3. 
Wright  V.  Floyd  (Ind.  App.,  1909), 

86  N.  E.  971,  §§302,  305. 
Wright   V.    Glen   Telephone   Co.,   95 

N.  Y.  Supp.  101,  §  146. 
Wright  V.  Nagle,  101  U.  S.  791,  §  56. 
Wright  V.  Roseberry,  121  U.  S.  570, 

§  129. 
Wyandotte  Electric  Co.   v.  City  of 

Wyandotte,  124  Mich.  43,  §  247. 
Wyckoff,    Seamans    &    Benedict    v. 

Wagner  Typewriter  Co.,  99  Fed. 
158,  §  137. 
Wyman  v.  Bowman  (U.  S.  C.  C.  A.), 
127  Fed.  257,  §§  282,  284,  288. 


Tazoo  &  Mississippi  Valley  Rd.  Co. 
V.  Vicksburg,  209  U.  S.  358,  §  79. 


TABLE    OF   CASES   CITED  Xciii 

Yonley  v.   Lavcndt-r,   21    Wall.   276,  Z 

§239. 
Young,    Ex   parte,    209    U.    S.    123,    Zartman   v.    First    Nat.    Bank,    21G 

§§  144,  155,  423,  430,  445,  456.  U.  S.  134,  §  412. 

Young  ex   rel.  Attorney   General   v.    Ziegenliein   v.   Smith,    116   111.   App. 

Robinson  (1907),  112  N.  W.  Rep.        SO,  §  317. 

269,  §  155.  Ziegler  v.  Corwin,  42   N.   Y.  Supp. 

855,  §  89. 


JOYCE  ON  ACTIONS 

BY  AND  AGAINST  COllPORATIONS 

AT  LAW  AND  IN  EQUITY 

EMBRACING    ALSO    CRIMINAL    OFFENSES   AND    TIIK    CONSTITUTIONAI, 
BASIS    OF   CORPORATION    ACTIONS   AND   DEFENSES 

CHAPTER  I 

CONSTITUTIONAL     BASIS    OF    ACTIONS    AND    DEFENSES — FUNDA- 
MENTAL  GOVERNMENTAL    POWERS 

§  1.  Preliminary  Statement.  Governments  Distinguished— 

2.  Constitution  and  Laws  of  United  Territories. 

States  Supreme  Law  of  Land.    §  4.  Judicial  and  Legislative  Powers. 

3.  Powers   of    Federal   and    State        5.  Same  Subject. 

Section  1.  Preliminary  Statement. 

Inasmuch  as  one  of  the  great  causes  or  grounds  of  action 
or  defenses  in  the  case  of  corporations  is  that  arising  from 
some  infringement  or  claimed  infringement  of  their  constitu- 
tional rights,  we  shall  consider  briefly  the  decisions  and  general 
governing  principles  based  upon  constitutional  guarantees  or 
the  protection  afforded  by  the  Constitution,  embracing  gen- 
erally the  powers  of  the  Nation  and  State,  of  Congress  and  of 
State  legislatures,  and  the  constitutionality  of  laws  affecting 
corporations  or  their  rights  and  remedies.  In  determining 
these  points  we  are  able  to  ascertain  whether  certain  actions 
can  or  cannot  be  sustained  against  or  by  corporations,  what 
causes  of  action  exist  and  what  defenses  may  be  availed  of. 
Again,  the  determination  of  the  extent  of  the  constitutional 
and  legislative  powers  of  States,  not  only  in  granting  franchises 
but  also  in  the  matter  of  regulation  and  control  of  corpora- 
1  (1) 


§  2     CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DKFENSES 

tions/  lies,  in  numerous  cases,  at  the  basis  of  cori)orate  rights, 
remedies,  actions  and  defenses,  or  is  essential  to  the  ascer- 
tainment thereof. 

§  2.  Constitution  and  Laws  of  United  States  Supreme  Law 
of  Land. 

The  Constitution  of  the  United  States  provides  that:  "The 
Constitution  and  the  Laws  of  the  United  States  which  shall 
be  made  in  pursuance  thereof,  *  *  *  ghall  be  the  supreme 
law  of  the  land;  and  the  judges  in  every  State  shall  be  bound 
thereby,  anything  in  the  Constitution  or  laws  of  any  State  to 
the  contrary  notwithstanding."  ^ 

It  is  a  general  rule  that,  in  so  far  as  laws  passed  by  Congress 
are  constitutional  and  are  enacted  to  carry  out  the  powers 
vested  in  the  Government  of  the  United  States,  the  States  are 
not  empowered  to  retard,  burden  or  control  the  operations  of 
such  constitutional  laws.^  So  it  necessarily  follows  from  the 
position  given  by  the  Constitution  to  legislation  in  pursuance 
of  it  as  the  supreme  law  of  the  land,  that  where  the  power  of 
the  State  and  that  of  the  Federal  Government  come  in  conflict 
the  latter  must  control  and  the  former  yield.  But  on  certain 
subjects  the  power  of  the  State  over  them  is  plenary  until 
Congress  acts  upon  the  subject,  and  the  States  also  have,  as 
will  appear  hereafter,  full  power  within  their  limits  to  regulate 
matters  of  internal  police.^    Again,  when  a  State  statute  and  a 

1  See  Joyce  on  Franchises,  §§  132  et  seq.,  364  et  seq. 

2  Art.  VI,  par.  2,  Const.  U.  S.  See  list  of  citations  in  Vol.  I,  Comp.  Stat. 
U.  S.,  1901,  under  this  article  of  the  Constitution  of  the  United  States. 
Applied  also  per  Mr.  Chief  Justice  Waite  in  Pensacola  Teleg.  Co.  v.  Western 
Union  Teleg.  Co.,  96  U.  S.  1,  24  L.  ed.  708,  1  Am.  Elec.  Cas.  253. 

The  Government  of  the  Union,  though  limited  in  its  powers,  is  supreme 
within  the  sphere  of  its  action,  and  its  laws,  when  made  in  pursuance  of  the 
Constitution,  form  the  supreme  law  of  the  land.  McCulloch  v.  Maryland, 
4  Wheat.  (17  U.  S.)  316,  4  L.  ed.  579. 

3  McCulloch  V.  State  of  Maryland,  4  Wheat.  (17  U.  S.)  316,  4  L.  ed.  579, 
cited  and  quoted  from  in  United  States  v.  Rickert,  188  U.  S.  438,  439,  23 
Sup.  Ct.  480,  481,  47  L.  ed.  536,  537,  cited  in  South  Carolina  v.  United 
States,  199  U.  S.  437,  452,  24  Sup.  Ct.  110,  50  L.  ed.  261. 

4  Escanaba  Company  v.  Chicago,  107  U.  S.  678,  683,  27  L.  ed.  442,  2  Sup. 
Ct.  185,  aff'g  12  Fed.  777.  In  this  case  a  corporation  owning  steam  vessels, 
and  engaged  in  the  carrying  trade  on  Lake  Michigan  and  navigable  waters 

2 


FUNDAMENTAL  GOVERNMENTAL  POWERS         §  2 

Federal  statute  operate  upon  the  same  subject-matter,  and 
prescribe  different  rules  concerning  it,  and  the  Federal  statute 
is  one  within  the  competency  of  Congress  to  enact,  the  State 
statute  must  give  away.^  So,  although  legislation  may  be  an 
exercise  of  the  police  power,  which  generally  si)eaking  belongs 
to  the  State,  yet  if  it  is  an  attempt  in  virtue  of  that  power,  to 
directly  regulate  commerce,  so  that  there  is  a  conflict  between 
the  powers  claimed  by  the  State  and  those  which  belong  ex- 
clusively to  Congress,  the  former  must  yield,  by  reason  of  the 
above  constitutional  provision.^  Again,  in  a  case  of  a  bill  for 
an  injunction  to  restrain  the  maintenance  and  use  of  a  tele- 
graph line,  a  State  statute  granting  an  exclusive  right  to  main- 
tain another  telegraph  line  within  a  State  was  held  in  conflict 
with  the  Post  Roads  Act  of  Congress  and  Mr.  Chief  Justice 
Waite  who  deUvered  the  opinion  of  the  court  declared  that: 
"The  government  of  the  United  States,  within  the  scope  of  its 
powers,  operates  upon  every  foot  of  territory  within  its  juris- 
diction. It  legislates  for  the  whole  nation  and  is  not  embar- 
rassed by  State  lines.  Its  peculiar  duty  is  to  protect  one  part 
of  the  country  from  encroachments  by  another  upon  the  na- 
tional rights  which  belong  to  all."  ^ 

connected  with  it,  claimed  to  be  impeded  by  obstructions,  caused  by  the 
closing  of  draws  of  bridges  imder  an  ordinance  of  the  city  of  Chicago  at 
certain  times  and  insisted  that  its  navigation  of  the  river  should  not  be 
delayed  as  the  rights  of  commerce  by  vessels  were  paramoimt  to  rights  of 
commerce  in  other  ways,  and  it  was  held  that  the  waters  in  question,  so 
obstructed  as  to  their  navigation,  were  navigable  waters  of  the  United 
States  under  control  of  Congress,  in  the  exercise  of  its  power  under  the 
commerce  clause,  but  that  until  that  body  acted  the  State  had  plenary 
authority  over  bridges  across  them,  and  could  vest  in  Chicago  jurisdiction 
over  their  construction,  repair  and  use  within  the  city. 

5  Gulf,  Colorado  &  Santa  Fe  Ry.  Co.  v.  Hefley,  158  U.  S.  98,  30  L.  ed.  910, 
15  Sup.  Ct.  802. 

6  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  222,  29  Sup.  Ct.  633, 
634,  a  case  of  a  statute  relating  to  intoxicating  liquors  which  was  held  in 
conflict  with  the  Federal  constitutional  provision  as  to  regulation  of  com- 
merce.   Ky.  Stat.,  1903,  §  1307. 

7  Pensacola  Telegraph  Co.  v.  Western  Union  Teleg.  Co.,  96  U.  S.  1,  24 
L.  ed.  708,  1  Am.  Elec.  Cas.  253. 

As  to  Post  Roads  Act  and  hostile  legislation  see  Joyce  on  Electric  Law 
(2d  ed.),  §§  65,  67. 

3 


§  3     CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

The  above  constitutional  provision  is  not  as  to  a  State  Su- 
})rcine  Court  the  law  of  a  foreign  jurisdiction  in  its  application 
to  the  effect  of  a  State  statute  affecting  the  right  of  carriers  by- 
express  to  establish  reasonable  delivery  limits  and  to  fix  rea- 
sonable tolls,  and  the  construction  of  a  regulating  statute  as  to 
interstate  and  intrastate  shipments.* 

§  3.  Powers  of  Federal  and  State  Governments  Distin- 
guished — Territories. 

The  Government  of  the  United  States  is  one  of  enumerated 
powers.  It  has  no  inherent  powers  of  sovereignty.  The  enu- 
meration of  the  powers  granted  is  to  be  found  in  the  Consti- 
tution of  the  United  States  and  in  that  alone.  The  manifest 
]3urpose  of  the  Tenth  Amendment  to  the  Constitution  is  to  put 
beyond  dispute  the  proposition  that  all  powers  not  granted 
are  reserved  to  the  people.**  A  power  enumerated  and  dele- 
gated by  the  Constitution  to  Congress  is  comprehensive  and 
complete,  without  other  limitations  than  those  found  in  the 
Constitution  itself.  To  preserve  the  even  balance  between  the 
National  and  State  Governments  and  to  hold  each  in  its  separate 
sphere  is  the  duty  of  all  courts,  and  pre-eminently  of  the  Federal 
Supreme  Court.  That  which  is  implied  is  as  much  a  part  of  the 
Constitution  as  that  which  is  expressed,  and  amongst  the  im- 
plied matters  is  that  the  Nation  may  not  prevent  a  State  from 
discharging  the  ordinary  functions  of  government,  and  no  State 
can  interfere  with  the  National  Government  in  the  free  exercise 
of  the  powers  conferred  upon  it.^°  While  the  Federal  Govern- 
ment is  one  of  enumerated  powers  specified  in  its  Constitution, 
State  Constitutions  are  limitations  upon  and  not  grants  of 
legislative  power.^^     And  it  may  also  be  generally  stated,  in 

8  State  ex  rel.  Railroad  Commissioner  v.  Adams  Express  Co.  (Ind.,  1908), 
85  N.  E.  966,  83  N.  E.  337. 

9  Kansas  v.  Colorado,  206  U.  S.  46,  51  L.  ed.  956,  27  Sup.  Ct.  655;  South 
Carolina  v.  United  States,  199  U.  S.  437,  50  L.  ed.  261,  26  Sup.  Ct.  110. 

10  South  Carohna  v.  United  States,  199  U.  S.  437,  50  L.  ed.  261,  26  Sup. 
Ct.  110. 

11  Alabama:  State  v.  Skeggs  (Ala.,  1908),  46  So.  268,  270;  Ensley  Develop- 
ment Co.  V.  Powell,  147  Ala.  .300,  40  So.  137;  Dorsey,  In  re,  7  Port  (Ala.),  293. 

California:  City  St.  Improvement  Co.  v.  Regents'  University  of  Cali- 

4 


FUNDAMENTAL  GOVERNMENTAL  POWERS         §  3 

view  of  our  Republican  form  of  governnient  and  of  the  powers 
reserved  to  the  States  or  to  the  people  under  the  Tenth  Amend- 
ment to  the  Federal  Constitution,  that  the  legislative  powers  of 
a  State  in  all  matters  of  government  are  sovereign  over  all  sub- 
jects and  embrace  all  that  are  not  forbidden  by  the  Constitution 
of  the  State  and  of  the  United  States.^'     In  a  Connecticut  case 

fomia,  158  Cal.  776,  778,  96  Pac.  801  (the  Constitution  of  the  State  being 
but  a  restriction  upon  the  power  of  the  legislature,  the  limitations  therein 
contained  will  not  be  extended  beyond  the  legitimate  meaning  and  use  of 
the  terms  employed,  per  Henshaw,  J.);  Beals  v.  Amador  County  Super- 
visors, 35  Cal.  624;  McCarthy,  Ex  parte,  29  Cal.  395. 

Colorado:  People  ex  rel.  Rhodes  v.  Fleming,  10  Colo.  553,  16  Pac.  298. 

Florida:  Cotten  v.  Ponder,  6  Fla.  610. 

Illinois:  Harder's  Fireproof  Storage  &  Van  Co.  v.  Chicago,  235  111.  58, 
85  N.  E.  245;  Winch  v.  Tobin,  107  111.  212. 

Indiana:  Hovey  v.  State,  119  Ind.  395,  21  N.  E.  21.  Compare  State  v. 
Denny,  118  Ind.  449,  21  N.  E.  274. 

loiva:  Eckerson  v.  City  of  Des  Moines,  137  Iowa,  452,  465,  115  N.  VV.  177; 
Purczell  V.  Smidt,  21  Iowa,  54. 

Kentucky:  BuHitt,  Sheriff,  v.  Sturgeon,  32  Ky.  L.  Rep.  215,  105  S.  W.  468; 
Griswold  v.  Hepburn,  2  Duv.  (63  Ky.)  20. 

Louisiana:  Hughes  v.  Murdock,  45  La.  Ann.  935,  13  So.  182. 

Maine:  Winchester  v.  Corinna,  55  Me.  9. 

Michigan:  Attorney  General  v.  Preston,  56  Mich.  177,  22  N.  W.  261. 

Montana:  Evers  v.  Hudson,  36  Mont.  135,  92  Pac.  462. 

Nebraska:  State  v.  Moore,  40  Neb.  854,  59  N.  W.  755. 

New  Hampshire:  Concord  Rd.  v.  Greeley,  17  N.  H.  47. 

New  York:  People  v.  Flagg,  46  N.  Y.  401;  Chenango  Bank  v.  Brown,  26 
N.  Y.  467. 

Pennsylvania:  Lewis,  Appeal  of,  67  Pa.  St.  153. 

South  Carolina:  Lynch,  Ex  parte,  16  S.  C.  32. 

Tennessee:  Stratton  v.  Morris,  5  Pick.  (89  Tenn.)  497,  12  L.  R.  A.  70, 
15  S.  W.  87. 

Texas:  Solon  v.  State  (Tex.  Cr.  App.,  1908),  114  S.  W.  349;  Holly  v.  State, 
14  Tex.  App.  505. 

Utah:  Salt  Lake  City  v.  Christensen  Co.,  34  Utah,  38,  42,  95  Pac.  523. 

Vermont:  Thorpe  v.  Rutland  &  B.  R.  Co.,  27  Vt.  140,  62  Am.  Dec.  625. 

Virginia:  Commonwealth  v.  Drewry,  15  Gratt.  (Va.)  1. 

West  Virginia:  Bridges  v.  Shallcross,  6  W.  Va.  562. 

Wisconsin:  Bushnell  v.  Beloit,  10  Wis.  195. 

Compare  Leavenworth  County  Comm'rs  v.  Miller,  7  Kan.  479,  12  Am. 
Rep.  425;  Cincinnati  W.  &  Z.  R.  Co.  v.  Supervisors,  1  Ohio  St.  77. 

12  United  States:  Piatt  v.  Le  Cocq  (U.  S.  C.  C),  150  Fed.  391  (legislation 
does  not  look  to  the  Constitution  for  power  to  act  but  only  to  see  if  that 
instrument  restricts  or  enlarges  its  powers). 

Alabama:  Finklea  v.  Parish  (Ala.,  1909),  49  So.  366  (Constitution  is  n.A 


§  3    CONSTITUTIONAL    BASIS    OF    ACTIONS   AND    DEFENSES — 

it  is  held  that  the  power  of  legislation  vested  by  the  Constitution 
in  the  General  Assembly  covers  the  whole  field  of  legitimate 

the  source  of  legislative  power,  and  there  are  no  limits  to  the  legislative 
power  of  the  State  government  save  such  as  are  contained  in  the  Constitu- 
tion). 

California:  Sheehan  v.  Scott,  145  Cal.  684,  79  Pac.  350  (includes  all 
powers  not  expressly  prohibited  or  otherwise  conferred);  Kingsbury  v. 
Nye,  9  Cal.  App.  574,  581,  99  Pac.  985  (legislature  within  its  sphere  of  action 
is  omnipotent,  save  only  as  its  power  is  restricted  by  the  Constitution). 

Colorado:  People  ex  rel.  Rhodes  v.  Fleming,  10  Colo.  553,  16  Pac.  298 
(Constitution  is  not  a  grant  but  a  limitation  of  power,  and  legislature  has 
plenary  power  for  all  purposes  of  civil  government). 

Connecticut:  Booth  v.  Town  of  Woodbury,  32  Conn.  118  (legislative  power 
is  limited  only  by  Constitution  of  State  and  of  United  States  and  by  prin- 
ciples of  natural  justice).  See  Allyn's  Appeal,  81  Conn.  534,  considered  in 
text  in  this  section. 

Delaware:  State  v.  Fountain  (Del.,  1908),  69  Atl.  926,  930  (legislative 
power  is  vested  by  Constitution  in  General  Assembly  and  such  grant  is  broad 
and  general,  and  though  limited  by  other  constitutional  provisions  incon- 
sistent therewith  such  limitations  are  not  an  enumeration  of  the  only  specific 
power) . 

Illinois:  Harder's  Fireproof  Storage  &  Van  Co.  v.  Chicago,  235  111.  58, 
85  N.  E.  245  (legislature  may  exercise  any  power  not  prohibited  by  State 
or  Federal  Constitution);  Hawthorn  v.  People,  109  111.  302,  50  Am.  Rep. 
610  (State  has  supreme  legislative  power  except  so  far  as  hmited  by  Con- 
stitution, State  or  Federal,  or  such  as  has  been  delegated  to  general  govern- 
ment). 

Indiana:  State  v.  Goldhait  (Ind.,  1909),  87  N.  E.  133  (legislature  ia 
supreme  except  as  limited  by  Constitution). 

Iowa:  McGuire  v.  Chicago,  Burlington  &  Quincy  R.  Co.,  131  Iowa,  340, 
108  N.  W.  340  (State  has  sovereign  legislative  power  over  all  subjects  except 
such  as  are  reserved  by  the  State  Constitution  and  subject  to  the  power 
delegated  expressly  or  by  necessary  implication  to  the  Federal  Government). 

Kentucky:  Bullitt,  Sheriff,  v.  Sturgeon,  32  Ky.  L.  Rep.  215,  105  S.  W.  468 
(Constitution  not  a  delegation  of  powers  but  a  hmitation  and  wherever  it 
has  not  limited  the  right  of  the  legislature  to  act  it  may  act). 

Missouri:  State  ex  rel.  Hensen  v.  Sheppard,  192  Mo.  497,  507,  91  S.  W. 
477  (may  enact  any  law  not  prohibited  by  Constitution) ;  Roberts,  Ex  parte, 
166  Mo.  207,  65  S.  W.  726  (same  as  preceding  case). 

Montana:  Evers  v.  Hudson,  36  Mont.  135,  92  Pac.  462  (in  the  absence  of 
some  specific  prohibition  in  the  Constitution  or  the  use  in  that  instrument 
of  terms  which  imply  a  prohibition  the  legislative  power  is  supreme) ;  Mis- 
souri River  Power  Co.  v.  Steele,  32  Mont.  433,  438,  SO  Pac.  1093  (in  the 
matter  of  legislation  the  people  through  the  legislature  have  plenary  power 
except  in  so  far  as  inhibited  by  the  Constitution). 

Nevada:  Boyce,  Ex  parte,  27  Nev.  299,  75  Pac.  1,  65  L.  R.  A.  47  (legis- 
lature has  supreme  power  in  all  matters  of  government  when  not  prohibited 

(3 


FUNDAMENTAL  GOVERNMENTAL  POWERS         §  3 

legislation,  except  as  that  may  be  limited  by  other  provisions 
of  that  Constitution  or  by  the  Federal  Constitution;  that,  sub- 
by  constitutional  limitations,  and  while  powers  of  Federal  Government  are 
restricted  to  those  delegated,  those  of  State  government  embrace  all  not 
forbidden);  Wallace  v.  City  of  Reno,  27  Nev.  71,  73  Pac.  628,  103  Am.  St. 
Rep.  747,  63  L.  R.  A.  337  (have  all  power  in  matters  of  government  unless 
limited  by  Constitution). 

New  York:  Ahem,  Matter  of,  v.  Elder,  195  N.  Y.  493,  500,  88  N.  E.  1059, 
aff'g  115  N.  Y.  Supp.  1108  ("subject  to  the  restrictions  and  limitations  of  the 
Constitution  the  power  of  the  legislature  to  make  laws  is  absolute  and  un- 
controllable," per  Werner,  J.);  People  v.  Young,  45  N.  Y.  Supp.  772,  18 
App.  Div.  162. 

Ohio:  Southern  Gum  Co.  v.  Laylin,  66  Ohio  St.  578,  64  N.  E.  564  (States' 
powers  are  sovereign  except  as  limited  and  restrained  by  Federal  and  State 
Constitutions) . 

Pennsylvania:  Likins's  Petition,  223  Pa.  456  (whatever  the  people  have 
not  in  their  Constitution  restrained  themselves  from  doing,  they,  through 
their  representatives  in  the  legislature,  may  do) ;  Commonwealth  v.  Mallet, 
27  Pa.  Super.  Ct.  41  (except  where  Constitution  has  imposed  hmits  upon 
the  legislative  power  it  must  be  considered  as  practically  absolute,  whether 
it  operate  according  to  natural  justice  or  not  in  any  particular  case). 

South  Dakota:  Watson,  In  re,  17  S.  Dak.  486,  97  N.  W.  463  (there  are  no 
limitations  on  the  power  of  the  legislature  except  such  as  are  imposed  by 
the  State  and  Federal  Constitutions). 

Tennessee:  Wright  v.  Cunningham,  115  Tenn.  445,  91  S.  W.  493  (legis- 
lature has  all  legislative  powers  except  so  far  as  restrained  by  Federal  or 
State  Constitutions  expressly  or  by  necessary  implication) ;  Reelfoot  Lake 
Levee  Dist.  v.  Dawson,  97  Tenn.  151,  159,  34  L.  R.  A.  725,  36  S.  W.  1041. 

Utah:  State  v.  Lewis,  26  Utah,  120,  72  Pac.  388  (legislature  power  to 
legislate  upon  all  subjects  and  for  all  purposes  of  civil  government  is  abso- 
lute, inherent  and  plenary  except  as  limited  or  controlled  by  the  Federal  or 
State  Constitution);  Kimball  v.  Grantsville  City,  19  Utah,  368,  383,  57  Pac. 
1,  45  L.  R.  A.  628  (where  the  State  has  committed  its  whole  lawmaking 
power  to  the  legislature,  except  such  as  is  expressly  or  impUedly  withheld 
by  the  State  or  Federal  Constitution,  it  has  plenary  power  for  all  purposes 
of  civil  government,  and,  therefore,  in  the  absence  of  any  constitutional 
restraint,  express  or  implied,  the  legislature  may  act  upon  any  subject 
within  the  sphere  of  the  government). 

Virginia:  Willis  v.  Kalmbach  (Va.,  1909),  64  S.  E.  342  (as  to  matters  not 
ceded  to  the  Federal  Government  the  legislative  powers  of  the  General 
Assembly  are  without  limit  except  so  far  as  restrictions  are  imposed  by  the 
State  Constitution  in  express  terms  or  by  strong  implication.  The  State 
Constitution  is  a  restraining  instrument  only);  Norfolk,  City  of,  v.  Board 
of  Trade  &  Business  Men's  Assoc.  (Va.,  1909),  63  S.  E.  987;  Conek  v.  Skeen 
(Va.,  1908),  63  S.  E.  11  (legislature  has  full  power  to  legislate  on  any  sub- 
ject unless  prohibited  by  Constitution) ;  Whitlock  v.  Hawkins,  105  Va.  242, 
53  S.  E.  401  (same  as  Willis  case);  Brown  v.  Epps,  91  Va.  726,  27  L.  R.  A. 

7 


§  3     CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES 

ject  to  these  exceptions,  any  legislation  is  legitimate  which  is 
not  inconsistent  with  a  republican  form  of  government.^^  The 
power  of  legislation  may  be  taken  away  from  the  lawmaking 
body  as  well  by  implication  as  by  express  prohibition,  and  pro- 
hibitions against  legislation  are  equally  as  effectual  as  when 
they  are  express,  and  are  to  be  regarded  in  the  one  case  no  less 
than  in  the  other.^^  Another  factor  of  importance  is  that  the 
first  eight  articles  of  the  Amendments  to  the  Federal  Constitu- 
tion have  reference  to  the  powers  exercised  by  the  Government 
of  the  United  States  and  not  to  those  of  the  States.^^  As  to 
Territories  Congress  has  only  reserved  a  revisory  power  over 
territorial  legislation,  and  a  statute  duly  enacted,  and  within 
the  legislative  power  of  the  Territory,  remains  in  full  force  until 
Congress  annuls  it  by  exerting  such  power  .^® 

676,  21  S.  E.  119  (Constitution  is  restraining  instrument,  and  legislature 
possesses  all  legislative  power  not  prohibited  by  Constitution). 

Washington:  State  v.  Clark,  30  Wash.  439,  71  Pac.  20  (absence  in  Constitu- 
tion of  specially  delegated  power  to  legislature  is  not  a  restriction). 

Wisconsin:  MinneapoHs,  St.  Paul  &  Sault  Ste.  Marie  Ry.  Co.  v.  Railroad 
Commission,  136  Wis.  146,  116  N.  W.  905  (no  specific  enabling  provision 
required  to  enable  legislature  to  make  all  laws  necessary  and  proper  to  carry 
into  execution  the  powers  which  the  Constitution  vests  in  the  State  govern- 
ment); State  V.  Redmon,  134  Wis.  89,  114  N.  W.  137  (general  declaration 
in  Constitution  of  the  purposes  of  civil  government  is  a  limitation  upon 
legislative  power  designed,  at  least  in  part,  to  prevent  clearly  unreasonable 
enactments  restricting  natural  private  rights). 

Government  of  United  States  is  one  of  envimerated  powers  specified  in 
the  Federal  Constitution  and  differs  in  this  respect  from  State  Constitutions 
which  are  not  grants  of  power  to  the  States,  but  apportion  and  impose 
restrictions  upon  the  powers  which  the  States  inherently  possess.  Evers  v. 
Hudson,  36  Mont.  135,  149,  92  Pac.  462. 

"It  is  fundamental  in  our  system  of  government  that  all  powers  not 
delegated  to  the  United  States  by  the  terms  of  the  Federal  Constitution  and 
its  amendments,  nor  prohibited  by  it  to  the  States  are  reserved  to  the  States 
or  to  the  people  (Const.  U.  S.,  Amdt.  X).  Subject  to  the  authority  thus 
expressly  or  by  necessary  inference  delegated  to  the  Federal  Government, 
the  State  has  sovereign  legislative  power  over  all  subjects  except  such  as  are 
withheld  by  the  Constitution  of  the  State  itself."  McGuire  v.  Chicago,  Bur- 
lington &  Quincy  Rd.  Co.,  131  Iowa,  340,  349,  108  N.  W.  340,  per  Weaver,  J. 

13  Allyn's  Appeal,  81  Conn.  534. 

14  Cain  v.  Smith,  117  Ga.  902,  44  S.  E.  5. 

15  Lloyd  v.  Dollison,  194  U.  S.  445,  48  L.  ed.  1062,  24  Sup.  Ct.  703. 

16  Atchison,  Topeka  &  Santa  Fe  Ry.  Co.  v.  Sowers,  213  U.  S.  55,  53  L.  ed. 


FUNDAMENTAL  GOVERNMENTAL  POWERS         §  4 

§  4,  Judicial  and  Legislative  Powers. ^^ 

The  boundaries  between  legislative  and  judicial  fields  should 
he  carefully  observed .^^  A  judicial  inquiry  declares  and  enforces 
liabilities  as  they  stand  on  present  or  past  facts  and  under  ex- 
isting laws  while  legislation  looks  to  the  future  and  changes 
conditions  making  new  rules  thereafter  to  be  applied  to  all  or 
some  part  of  the  subject  of  its  powers.^** 

In  a  qualified  sense  and  to  a  limited  extent  the  separate 
States  are  sovereign  and  independent,  and  the  relations  be- 
tween them  partake  something  of  the  nature  of  international 
law.  The  Supreme  Court  of  the  United  States  in  appropriate 
cases  enforces  the  principles  of  that  law  and  in  addition  by  its 
decisions  of  controversies  between  two  or  more  States  is  con- 
structing what  may  not  improperly  be  called  a  body  of  inter- 
state law.^^ 

By  the  Constitution  the  entire  judicial  power  of  the  United 
States  is  vested  in  its  courts.^^ 

But  the  judicial  power  of  the  United  States  extending  by  the 
Constitution  to  controversies  between  citizens  of  different  States, 
as  well  as  to  cases  arising  under  the  Constitution,  treaties  and 
laws  of  the  United  States,  the  manner  and  conditions  upon 
which  that  power  shall  be  exercised,  except  as  the  original  or 
appellate  character  of  the  jurisdiction  is  specially  designated 
in  the  Constitution,  are  mere  matters  of  legislative  discretion.^^ 

No  State  or  Territory  can  pass  laws  having  force  or  effect 

695,  29  Sup.  Ct.  397,  citing  Miners'  Bank  v.  Iowa,  12  How.  (53  U.  S.)  1,  8, 
13  L.  ed.  867. 

17  See  §  10,  herein. 

18  Honolulu  Rapid  Transit  &  Land  Co.  v.  Hawaii,  211  U.  S.  282,  53  L.  ed. 
196,  29  Sup.  Ct.  55,  rev'g  15  Hawaii,  553. 

18  Prentis  v.  Atlantic  Coast  Line  Co.,  211  U.  S.  210,  29  Sup.  Ct.  67,  53 
L.  ed.  150,  cited  in  Louisville  &  Nashville  Rd.  Co.  v.  Central  Stock  Yards 
Co.,  212  U.  S.  132,  147,  29  Sup.  Ct.  146,  53  L.  ed.  441,  as  stating  to  what 
extent  a  court  may  be  made  an  instrumentality  in  the  administration  of  the 
laws  of  a  State. 

20  Kansas  v.  Colorado,  206  U.  S.  46,  51  L.  ed.  956,  27  Sup.  Ct.  655. 

21  Kansas  v.  Colorado,  206  U.  S.  46,  51  L.  od.  956,  27  Sup.  Ct.  655.  See 
also  as  to  Art.  Ill,  §  2,  of  Constitution,  Home  Ins.  Co.  v.  Northwestern 
Packet  Co.,  32  Iowa,  233,  236. 

22  Railway  Co.  v.  Whitton,  13  Wall.  (80  U.  S.)  270,  20  L.  ed.  571. 

9 


§  4     CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

over  persons  or  property  beyond  its  jurisdiction;^'  and  no 
legislature,  State  or  Federal,  can  conclusively  determine  for  the 
people  and  for  the  courts  that  what  it  enacts  in  the  form  of  law, 
or  what  it  authorizes  its  agents  to  do,  is  consistent  with  funda- 
mental law,  as  such  an  idea  is  in  opposition  to  the  theory  of  our 
institutions,  as  the  duty  rests  upon  all  courts,  Federal  and 
State,  when  their  jurisdiction  is  properly  invoked,  to  see  to  it 
that  no  right  secured  by  the  supreme  law  of  the  land  is  impaired 
or  destroyed  by  legislation.^ 

But  the  Federal  Supreme  Court  will  not  limit  the  power  of  a 
State  by  declaring  that  because  the  judgment  exercised  by  the 
legislature  is  unwise  it  amounts  to  a  denial  of  the  equal  pro- 
tection of  the  laws  or  deprivation  of  property  or  liberty  without 
due  process  of  law.^^  And  when  an  act  of  the  legislature  is 
challenged  in  a  court  its  inquiry  is  limited  to  the  question  of 
power;  and  as  the  courts  will  not  otherwise  interfere  with  the 
action  of  the  legislature,  it  will  be  presumed  that  the  legislature 
never  intends  to  interfere  with  the  action  of  the  courts,  or  to 
assume  judicial  functions  to  itself.^^  The  constitutional  right 
of  Congress  to  enact  legislation  in  regard  to  a  matter  wholly 
within  its  jurisdiction  is  the  sole  measure  by  which  the  validity 
of  such  legislation  is  to  be  determined  by  the  courts;  and  the 
courts  cannot  proceed  upon  the  supposition  that  harm  will  follow 
if  the  legislature  be  permitted  full  sway  and,  in  order  to  correct 
the  legislature,  exceed  their  own  authority,  and  assume  that 
wrong  may  be  done  in  order  to  prevent  wrong  being  accom- 
plished. Nor  can  the  courts  make  mere  form  and  substance  the 
test  of  the  constitutional  power  of  Congress  to  enact  a  statute  in 
regard  to  a  matter  over  which  Congress  has  absolute  control  .^^ 

23  Atchison,  Topeka  &  Santa  Fe  Ry.  Co.  v.  Sowers,  213  U.  S.  55,  53  L.  ed. 
695,  29  Sup.  Ct.  397,  case  affirms  99  S.  W.  190. 

24  Smyth  V.  Ames,  169  U.  S.  466,  42  L.  ed.  819,  18  Sup.  Ct.  418,  30  Chicago 
Leg.  News,  243,  171  U.  S.  361,  18  Sup.  Ct.  888,  43  L.  ed.  197. 

25  Heath  &  MuIHgan  Co.  v.  Worst,  207  U.  S.  338,  52  L.  ed.  236,  28  Sup. 
Ct.  114. 

2e  Angle  v.  Chicago,  St.  Paul,  M.  &  O.  Ry.  Co.,  151  U.  S.  1,  38  L.  ed.  5, 
14  Sup.  Ct.  240. 

27  Oceanic  Steam  Navigation  Co.  v.  Stranahan,  214  U.  S.  320,  53  L.  ed. 
1013,  29  Sup.  Ct.  671,  aff'g  155  Fed.  428.    "  But  as  was  pointed  out  in  Cary 

10 


FUNDAMENTAL  GOVERNMENTAL  POWERS         §  5 

So  far,  however,  as  the  Federal  Constitution  is  concerned  a  State 
may,  by  constitutional  provisions,  unite  legislative  and  judicial 
power  in  the  same  body.^*  And  there  is  nothing  in  the  Federal 
Constitution,  which  forbids  a  State  legislature  to  exercise  judi- 
cial powers  ;^^  nor  is  there  any  provision  in  said  Constitution 
which  directly  or  impliedly  prohibits  a  State,  under  its  own  laws, 
from  conferring  upon  nonjudicial  bodies  certain  functions  that 
may  be  called  judicial.'" 

§  5.  Same  Subject.'^ 

Proceedings  legislative  in  nature  are  not  proceedings  in  a 
court  within  the  meaning  of  the  Revised  Statutes,  §  720,  no 
matter  what  may  be  the  general  or  dominant  character  of  the 
body  in  which  they  take  place.'^  But  the  power  to  regulate 
the  operation  of  railroads  is  legislative  in  character,  and  the 

V.  Curtis,  3  How.  (44  U.  S.)  236  (11  L.  ed.  576),  and  as  has  been  often  since 
emphasized  by  this  court  [McCray  v.  United  States,  195  U.  S.  27  (24  Sup. 
Ct.  748,  49  L.  ed.  65)],  the  proposition  but  mistakenly  assumes  that  the 
courts  can  alone  be  safely  intrusted  with  power  and  that  hence  it  is  their 
duty  to  unlawfully  exercise  prerogatives  which  they  have  no  right  to  exert, 
upon  the  assumption  that  wrong  must  be  done  to  prevent  wrong  being 
accomplished."    Id.,  340,  per  Mr.  Justice  White. 

As  to  engrafting  a  limitation  on  a  statute  being  pure  judicial  legislation 
see  §  49,  herein,  point  (1)  of  text. 

28  Prentis  v.  Atlantic  Coast  Line  Co.,  211  U.  S.  210,  29  Sup.  Ct.  67,  53  L. 
ed.  150. 

29  Satterlee  v.  Matthewson  (1829),  2  Pet.  (27  U.  S.)  380,  7  L.  ed.  458. 
While  the  legislature  may  commit  to  judicial  tribunals  the  investigation 
of  facts  and  the  granting  of  decrees  it  may  exercise  that  power  itself.  Sylla- 
bus in  Mitchell  v.  Mitchell,  107  N.  Y.  Supp.  671. 

30  Consolidated  Rendering  Co.  v.  Vermont,  207  U.  S.  541,  552,  52  L.  ed. 
327,  29  Sup.  Ct.  178,  aff'g  66  Atl.  790.  "It  is  said  that  the  statute,  in  pro- 
viding for  the  production  of  books  and  papers"  by  a  corporation  doing 
business  in  the  State,  "includes  not  only  the  court  and  grand  jury  but  any 
tribunal  or  commission  authorized  by  the  State.  There  is  nothing,  as  we 
have  said,  in  the  Federal  Constitution  which  prevents  it."  Id.,  552,  per 
Mr.  Justice  Peckham. 

31  See  §  10,  herein. 

32  Prentis  v.  Atlantic  Coast  Line  Co.,  211  U.  S.  210,  29  Sup.  Ct.  67,  53 
L.  ed.  150,  cited  in  Louisville  &  Nashville  Rd.  Co.  v.  Central  Stock  Yards 
Co.,  212  U.  S.  132,  147,  29  Sup.  Ct.  146,  53  L.  ed.  441,  as  stating  to  what 
extent  a  court  may  be  made  an  instrumentality  in  the  administration  of 
the  laws  of  a  State. 

11 


§  5    CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

legislature  itself  may  exercise  it  or  may  delegate  its  execution 
in  detail  to  an  administrative  body,  and  where  the  legislature 
has  not  delegated  such  regulation  the  power  of  regulation  can- 
not be  exercised  by  the  courts  .^^ 

In  Connecticut  attempts  to  confer  by  statute  upon  the  Su- 
perior Court  essentially  legislative  or  administrative  powers  are 
inoperative.  But  while  such  a  court  does  not  possess  legislative 
or  administrative  powers  yet  it  may  in  the  exercise  of  its  judi- 
cial powers  restrain  the  unlawful  exercise  of  legislative  or  ad- 
ministrative powers  by  executive  officers,  municipal  councils, 
or  administrative  boards.^^  Again,  a  State  statute  cannot,  con- 
trary to  a  constitutional  provision  confiding  the  executive,  legis- 
lative and  judicial  powers  each  to  a  separate  magistracy  and 
vesting  the  judicial  power  in  specified  courts  and  such  inferior 
courts  as  the  legislature  shall  from  time  to  time  establish,  compel 
either  the  courts  or  judges  thereof,  when  acting  judicially,  to 
exercise  powers  which  are  essentially  and  distinctively  legisla- 
tive and  the  execution  of  which  are  not  incidental  to  the  dis- 
charge of  any  legislative  function,  and  this  applies  where  the 
power  of  regulating  the  location,  construction  and  operation 
of  street  railways  given  to  local  municipal  authorities  by  a 
State  statute  clearly  falls  within  the  limits  of  the  judicial  de- 
partment. The  fact  that  a  right  of  appeal  to  a  court  or  any 
judge  thereof  is  given  by  the  statute  in  case  the  municipal  au- 
thorities fail  to  exercise  their  powers  within  a  limited  time  does 

33  Honolulu  Rapid  Transit  &  Land  Co.  v.  Hawaii,  211  U.  S.  282,  53  L.  ed. 
186,  29  Sup.  Ct.  55,  rev'g  15  Hawaii,  553. 

34  New  York,  New  Haven  &  Hartford  Rd.  Co.'s  Appeal,  80  Conn.  623, 
626,  639,  641,  70  Atl.  26  (case  of  appeal  from  refusal  of  city  to  approve 
plan  and  method  submitted  by  railroad  company  for  erection  and  main- 
tenance of  overland  electric  transmission  lines;  the  construction  of  statutes 
giving  control  to  municipal  authorities,  and  power  to  compel  placing  elec- 
tric wires  under  ground;  the  nature  of  the  powers  of  the  Superior  Court, 
and  how  invoked;  the  nonvahdity  of  statutes  conferring  powers  essentially 
legislative  or  administrative;  retrial  and  determination  by  railroad  com- 
missioners, by  local  municipal  authorities,  of  action  on  matters  relating  to 
street  railways;  the  right  of  "appeal";  the  power  of  the  trial  judge  to  enter- 
tain application  to  determine  judicial  question  as  to  nature  and  extent  of 
powers  of  common  council,  and  his  error  in  holding  that  common  council 
had  no  power  to  make  the  order  in  question). 

12 


FUNDAMENTAL  GOVERNMENTAL  POWERS         §  5 

not  make  the  exercise  of  such  power  of  regulation  a  judicial 
function,  as  the  appeal  so  provided  does  not  constitute  a  process 
to  invoke  the  judicial  power,  but  it  is  merely  an  application  to 
the  court  or  judge,  to  exercise  a  legislative  function  in  the  place 
or  stead  of  the  municipal  authorities.^^  Where  a  general  provi- 
sion in  the  Constitution  of  a  State  is  void  as  taking  property 
without  due  process  or  compensation,  and  compensation  has 
not  been  provided  by  statute,  the  defect  cannot  be  cured  by 
the  courts  inserting  provisions  for  compensation  in  judgments 
under  such  constitutional  provisions.^^  Another  factor  of  im- 
portance in  connection  with  legislative  powers  is  that  Congress 
has  reserved  a  revisory  power  over  territorial  legislation,  and  a 
statute  duly  enacted,  and  within  the  legislative  power  of  the 
Territory,  remains  in  full  force  until  Congress  annuls  it  by  ex- 
erting such  power.  But  it  is  also  true  that  the  passage  of  a 
legislative  act  of  a  Territory  is  the  exercise  of  authority  under 
the  United  States,  So  where  Congress  confers  on  a  Territory 
legislative  power  extending  to  all  rightful  subjects  of  legisla- 
tion, the  Territory  has  authority  to  legislate  concerning  per- 
sonal injuries  and  rights  of  action  relating  thereto.^^ 

35  Norwalk  Street  Ry.  Co.'s  Appeal,  69  Conn.  576,  37  Atl.  1080,  38  Atl. 
708,  39  L.  R.  A.  794.  See  also  Steenerson  v.  Great  Northern  R.  Co.,  69 
Minn.  353,  72  N.  W.  713,  8  Am.  &  Eng.  R.  Cas.  (N.  S.)  559. 

Under  the  Constitution  of  Connecticut,  which  confides  the  power  of 
government  to  three  separate  and  distinct  departments,  the  legislative, 
the  executive,  and  the  judicial,  the  General  Assembly  cannot  authorize 
the  courts  to  exercise  powers  which  are  clearly  administrative  and  not 
incidental  to  the  discharge  of  any  legitimate  judicial  function.  Spencer's 
Appeal,  78  Conn.  301. 

36  Louisville  &  Nashville  Rd.  Co.  v.  Central  Stock  Yards  Co.,  212  U.  S. 
132,  53  L.  ed.  441,  29  Sup.  Ct.  146,  rev'g  97  S.  W.  778. 

37  Atchison,  Topeka  &  Santa  Fe  Ry.  Co.  v.  Sowers,  213  U.  S.  55,  53  L.  ed. 
695,  29  Sup.  Ct.  397,  aff'g  99  S.  W.  190,  citing  to  the  first  point,  Miners' 
Bank  v.  Iowa,  12  How.  (53  U.  S.)  1,  8,  13  L.  ed.  867;  to  the  second  point, 
McLean  v.  Denver  &  Rio  Grande  Rd.  Co.,  203  U.  S.  38,  47,  51  L.  ed.  78, 
27  Sup.  Ct.  1 ;  and  applying  the  last  point  to  the  legislative  power  of  New- 
Mexico  under  act  of  September  9, 1850,  c.  49,  9  Stat.  446. 


13 


§  6    CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES- 


CHAPTER  II 

CONSTITUTIONAL  BASIS  OF  ACTIONS  AND  DEFENSES — REGULATION 

AND  CONTROL  ^ 

§     6.  Power  to  Regulate  and  Control    §  13.  Classification    Statutes — Four- 
— Generally.  teenth  Amendment. 

7.  Police  Power — General  Princi-        14.  Same  Subject. 

pies  as  to  Extent  of.  15.  Police    Power — Regulation    of 

8.  Same  Subject — Limitations.  Slaughter        Houses        and 

9.  Same     Subject  —  Limitations  Stock  Yards. 

Continued.  16.  Regulation    and    Control — In- 
10.  Same       Subject  —  Legislative  surance  Companies. 

Discretion — Interference    of  17.  Same  Subject. 

Courts.  18.  Regulation    and    Control — lu- 
ll. Liberty     to     Contract— Inter-  stances — Mines — Hours      of 

state        Commerce  —  Police  Labor — Water  Companies — 

Power — Anti-trust        Act —  Adulteration — Ship    Pas.sen- 

Combinations.  ger  Laws — Patent  Rights. 

12.  Liberty  to  Contract  Continued  19.  Regulation  and  Control — For- 

— Police     Power — Sales     on  eign  Corporations — Rule. 

Margins — Limitation  of  Lia-  20.  Same     Subject  —  Limitations 

bility  —  Mechanics'  Liens  —  Upon  Rule. 

Insurance. 

§  6.  Power  to  Regulate  and  Control — Generally. 

The  legislature  of  a  State  stands  for  the  entire  public,  and  it 
has  full  power  within  constitutional  limitations  and  within  rea- 
sonable limits,  to  regulate  and  control  public  employments 
and  property  used  in  connection  therewith,  and  the  owner  of 
property  devoted  to  public  use,  must  for  the  common  good  sub- 
mit to  have  that  use  and  employment  regulated  by  public  au- 
thority.^ 

A  corporation  is  subject  to  such  reasonable  regulations,  as 
the  legislature  may  from  time  to  time  prescribe,  as  to  the  gen- 
eral conduct  of  its  affairs,  serving  only  to  secure  the  ends  for 

1  See  §  1,  herein. 

2  Joyce  on  Electric  Law  (2d  ed.),  §  143;  Joyce  on  Franchises,  §§  364  et  seq. 

14 


REGULATION    AND   CONTROL  §  7 

which  it  was  created,  and  not  materially  interfering  with  privi- 
leges granted  to  it.^  Legislative  power  to  create  corporations 
implies  the  power  to  thereafter  prescribe  reasonable  regulations, 
even  though  the  right  to  repeal  or  amend  the  charter  is  not 
reserved  by  the  State.^  And  State  legislation  which  regulates 
business  may  well  make  distinctions  depend  upon  the  degrees 
of  evil  without  being  arbitrary,  unreasonable,  or  in  conflict 
with  the  equal  protection  provisions  of  the  Fourteenth  Amend- 
ment to  the  Federal  Constitution.^ 

It  is  also  within  the  power  of  a  State,  as  guardian  and  trustee 
for  its  people  and  having  full  control  of  its  affairs,  to  prescribe 
the  conditions  upon  which  it  will  permit  public  work  to  be  done 
on  behalf  of  itself  or  its  municipalities.^ 

§  7.  Police  Power — General  Principles  as  to  Extent  of. 

The  term  police  power  is  difficult  to  define,  but  the  following 
general  principles  have  been  asserted  by  the  courts  and  show, 
in  some  measure,  the  extent  of  the  right  to  exercise  the  same  and 
the  liinitations  thereon.  It  may  first  be  stated  that  this  power 
is  one  which  generally  speaking  belongs  to  the  States,^  that  is,  it 
is  reserved  to  the  States  and  there  is  no  grant  thereof  to  Con- 
gress in  the  Constitution.*  Each  State  has,  therefore,  the  power 
never  surrendered  to  the  Government  of  the  Union  to  guard  and 
promote  the  public  interests  by  reasonable  police  regulations 
that  do  not  violate  the  Constitution  of  the  United  States  or  of 
the  States.^    The  police  power  is  also  one  of  the  most  essential 

3  Chicago  Life  Ins.  Co.  v.  Needles,  113  U.  S.  574,  5  Sup.  Ct.  681,  28  L.  ed. 
1084. 

*  McGuire  v.  Chicago,  BurHngton  &  Quincy  Rd.  Co.,  131  Iowa,  340,  108 
N.  W.  902. 

8  Heath  &  Milligan  Mfg.  Co.  v.  Worst,  207  U.  S.  338,  52  L.  ed.  236,  28 
Sup.  Ct.  114;  following  Ozan  Lumber  Co.  v.  Union  County  Bank,  207  U.  S. 
251,  52  L.  ed.  195,  28  Sup.  Ct.  89. 

«Atkin  V.  Kansas,  191  U.  S.  207,  24  Sup.  Ct.  124,  48  L.  ed.  148,  aff'g 
State  V.  Atkins,  64  Kan.  174,  67  Pac.  519,  97  Am.  St.  Rep.  343. 

1  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  222,  29  Sup.  Ct.  633, 
634,  53  L.  ed.  972,  per  Mr.  Justice  Brewer.  See  New  York  v.  Miln,  11  Pet. 
(36  U.  S.)  102,  9  L.  ed.  648. 

•  Selliger  v.  Kentucky,  213  U.  S.  200,  29  Sup.  Ct.  449,  53  L.  ed.  761. 

»  Chicago,  Burlington  &  Quincy  Ry.  Co.  v.  Drainage  Comm'rs,  200  U.  S. 

15 


§  7    CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

of  governmental  powers,  at  times  one  of  the  most  insistent,  and 
always  one  of  the  least  limitable.^"  All  rights  are  held  subject 
to  the  police  power  of  the  State,  and  if  the  public  safety  or  the 
public  morals  require  the  discontinuance  of  any  manufacture 
or  traffic  the  legislature  may  provide  therefor  notwithstanding 
individuals  or  corporations  may  thereby  suffer  inconvenience.^^ 
This  power  embraces  regulations  by  a  State,  designed  to  pro- 
mote the  public  convenience  or  the  general  prosperity  as  well 
as  those  intended  to  promote  public  health,  morals,  or  safety; 
it  is  not  confined  to  what  is  ofi"ensive,  disorderly  or  unsanitary, 
but  extends  to  what  is  for  the  greatest  welfare  of  the  State.^^ 
Again,  whatever  is  contrary  to  public  policy  or  inimical  to  the 
public  interests  is  subject  to  the  police  power  and  is  within  the 
State's  legislative  control.^^  It  is  held  in  a  late  Connecticut 
case  that  the  term  police  power  has,  at  bottom,  no  other  mean- 
ing than  the  general  power  of  governing  its  people  and  do- 
minions belonging  to  every  sovereign .^^  And  in  a  recent  Wis- 
consin case  it  is  determined  that  the  police  power  is  the  power  to 
make  all  laws  which  in  the  contemplation  of  the  Constitution 

561,  584,  50  L.  ed.  596,  26  Sup.  Ct.  341  (case  affirms  212  111.  103,  72  N.  E. 
219),  per  Mr.  Justice  Harlan,  citing  New  York,  New  Haven  &  Hartford  Rd. 
Co.  V.  New  York,  165  U.  S.  628,  631,  41  L.  ed.  853,  17  Sup.  Ct.  418;  Henning- 
ton  V.  Georgia,  163  U.  S.  299,  308,  309,  16  Sup.  Ct.  1086,  41  L.  ed.  166; 
Morgan  v.  Louisiana,  118  U.  S.  455,  464,  6  Sup.  Ct.  1114,  30  L.  ed.  2.37; 
Patterson  v.  Kentucky,  97  U.  S.  501,  503,  24  L.  ed.  1115;  Railroad  Co. 
(Hannibal  &  St.  Joseph  Rd.  Co.)  v.  Husen,  95  U.  S.  465,  472,  24  L.  ed.  527; 
Gibson  v.  Ogden,  9  Wheat.  (22  U.  S.)  1,  6  L.  ed.  23. 

See  also  as  to  extent,  nature  and  definitions  of  police  power,  Joyce  on 
Franchises,  §  366. 

10  District  of  Columbia  v.  Brooke,  214  U.  S.  138,  29  Sup.  Ct.  560,  53  L.  ed. 
941. 

11  Beer  Co.  v.  Massachusetts,  97  U.  S.  25,  24  L.  ed.  989. 

12  Bacon  v.  Walker,  204  U.  S.  311,  27  Sup.  Ct.  289,  51  L.  ed.  499,  case 
affirms  Walker  v.  Bacon,  11  Idaho,  127,  81  Pac.  155.  See  also  Jacobson  v. 
Massachusetts,  197  U.  S.  11,  49  L.  ed.  643,  25  Sup.  Ct.  358;  New  York  v. 
Miln,  11  Pet.  (36  U.  S.)  102,  9  L.  ed.  648;  Stehmeyer  v.  Charleston,  53  S.  C. 
259,  31  S.  E.  322;  State  ex  rel.  Milwaukee  Medical  College  v.  Chittenden, 
127  Wis.  468,  107  N.  W.  500. 

13  Louisville  &  Nashville  Rd.  Co.  v.  Kentucky,  161  U.  S.  677,  40  L.  ed. 
849,  16  Sup.  Ct.  714. 

14  Allyn's  Appeal,  81  Conn.  534, 

16 


REGULATION    AND   CONTROL  §  8 

promote  the  public  welfare,  and  the  controlling  question  in  de- 
termining the  scope  of  the  police  power  is  whether  the  manner 
of  dealing  with  the  subject  in  the  particular  case  so  passes  the 
boundaries  of  reason  as  to  overstep  some  constitutional  limita- 
tion, express  or  implied .^^  Under  a  Nebraska  decision  the  es- 
sential quality  of  the  police  power  as  a  governmental  agency  is 
that  it  imposes  upon  persons  and  property  burdens  designed  to 
promote  the  safety  and  welfare  of  the  public  at  large .^^  The 
right  to  exercise  the  police  power  is  a  continuing  one  that  can- 
not be  limited  or  contracted  away  by  the  State  or  its  munici- 
pality, nor  can  it  be  destroyed  by  compromise  as  it  is  immate- 
rial upon  what  consideration  the  attempted  contract  is  based; 
the  exercise  of  the  police  power  in  the  interest  of  public  health 
and  safety  is  to  be  maintained  unhampered  by  contracts  in 
private  interests,  and  uncompensated  obedience  to  an  ordinance 
passed  in  its  exercise  is  not  violative  of  property  rights  protected 
by  the  Federal  Constitution.^^ 

§  8.  Same  Subject — Limitations. 

Although  a  State  may,  in  the  exercise  of  its  police  power, 
enact  such  laws  relating  to  persons  and  property  within  its 
territorial  limits  as  shall  best  promote  the  general  prosperity 
and  the  public  health,  safety  and  morals,  nevertheless  it  cannot 
encroach  upon  the  powers  of  the  Federal  Government  so  as  to 
impair  or  materially  destroy  rights  granted  or  secured  by  con- 
stitutional acts  of  Congress  or  granted  under  a  constitutional 
exercise  of  power,  and  this  is  especially  true  of  the  constitu- 
tional right  to  regulate  commerce.^^    It  is  held,  however,  in  a 

15  State  ex  rel.  Northern  Pae.  Ry.  Co.  v.  Railroad  Commission  (Wis., 
1909),  121  N.  W.  919. 

16  Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  Nebraska,  47  Neb.  549,  3 
Am.  &  Eng.  R.  Cas.  (N.  S.)  573,  41  L.  R.  A.  481,  66  N.  W.  624. 

17  St.  Paul,  Minneapolis  &  Manitoba  Ry.  Co.  v.  Minnesota,  214  U.  S.  497, 
29  Sup.  Ct.  698,  53  L.  ed.  1060,  aff'g  Northern  Pacific  Ry.  v.  Duluth,  208 
U.  S.  583,  52  L.  ed.  630,  28  Sup.  Ct.  341,  as  the  principal  case  involved  a 
question  almost  the  same. 

18  Western  Union  Teleg.  Co.  v.  James,  162  U.  S.  650,  16  Sup.  Ct.  934,  40 
L.  ed.  1105,  6  Am.  Elec.  Cas.  858,  861,  per  Mr.  Justice  Peckham.  See  People 
V.  Hawkins,  47  N.  Y.  Supp.  56,  20  N.  Y.  App.  Div.  494,  citing  Walling  v. 
Michigan,  116  U.  S.  446,  460,  29  L.  ed.  691,  696,  6  Sup.  Ct.  454;  People  v. 

2  17 


§  8    CONSTITUTIONAL   BASIS   OF   ACTIONS    AND    DEFENSES — 

Federal  Circuit  Court  case,  that  the  police  power  is  iiilu>rent  in 
the  States,  and  is  not  affected  by  the  interstate  commerce  pro- 
vision nor  by  the  Post  Roads  Act.^»  Again,  in  a  late  Federal 
Supreme  Court  case,  it  is  determined  that  generally  speaking 
the  police  power  belongs  to,  and  is  to  be  exercised,  by  the  State, 
but  it  must  yield  to  Congress  wherever  it  conflicts  with  the 
powers  belonging  exclusively  to  Congress.^"  So  in  another 
Federal  case  it  is  held  that  the  States  have  full  power  to  regu- 
late within  their  limits  matters  of  internal  police,  including  in 
that  general  designation  whatever  will  promote  the  peace,  com- 
fort, convenience  and  prosperity  of  the  people,  provided,  how- 
ever, that  the  exercise  of  such  power  does  not  come  in  conflict 
with  the  powers,  as  exercised  by  Congress  under  the  Federal 
Constitution  making  laws  of  the  United  States  passed  in  pursu- 
ance thereof  supreme  with  relation  to  the  States.^^  Notwith- 
standing the  general  police  power  is  reserved  to  the  States  it  is 
subject  to  this  limitation,  that  it  may  not  trespass  on  the  rights 
and  powers  vested  in  the  National  Government;  ^2  and  it  must 
be  exercised  in  subordination  to  the  Constitution,"^  for  it  is  not 
above  the  express  or  necessarily  implied  constitutional  prohibi- 
tions.^''    And  neither  the  unlimited  powers  to  tax,  nor  any  of 

Gilson,  109  N.  Y.  389,  401,  4  Am.  St.  Rep.  465,  17  N.  E.  343;  New  Orleans 
Gas  Light  Co.  v.  Louisiana  L.  &  H.  P.  &  Mfg.  Co.,  115  U.  S.  650,  29  L.  ed. 
516,  6  Sup.  Ct.  252;  Brennan  v.  Titusville,  153  U.  S.  289,  299,  4  Inters. 
Comm.  Rep.  658,  38  L.  ed.  719,  722,  14  Sup.  Ct.  829;  Jacobs,  In  re,  98  N.  Y. 
98,  108,  50  Am.  St.  Rep.  636.  Examine  Gibbons  v.  Ogden,  9  Wheat.  (22 
U.S.)  1,  6  L.  ed.  23. 

19  Western  Union  Teleg.  Co.  v.  Mayor  of  New  York,  38  Fed.  552,  2  Inters. 
Comm.  Rep.  533,  3  L.  R.  A.  449,  6  Ry.  &  Corp.  L.  Jour.  105,  2  Am.  Elec. 
Cas  195. 

20  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  29  Sup.  Ct.  633,  53 
L.  ed.  972. 

21  Escanaba  Company  v.  Chicago,  107  U.  S.  678,  683,  27  L.  ed.  442,  2 
Sup.  Ct.  185  (appHed  to  the  power  of  the  State  to  regulate  and  control  the 
construction,  use  and  repair  of  bridges,  by  delegation  of  its  authority  to 
a  municipal  body  of  such  power,  over  bridges  within  the  city  limits,  even 
though  over  navigable  waters,  provided,  however,  that  Congress  has  not 
acted  in  the  matter  under  the  commerce  clause  of  the  Constitution. 

22  Heff,  Matter  of,  197  U.  S.  488,  49  L.  ed.  848,  25  Sup.  Ct.  506. 

23  Stehmeyer  v.  Charleston,  53  S.  C.  259,  31  S.  E.  222. 

24  State  V.  Chittenden,  127  Wis.  468,  107  N.  W.  500. 

18 


REGULATION    AND   CONTROL  §  9 

its  large  police  powers,  can  be  exercised  to  such  an  extent  by 
the  State  as  to  work  a  practical  assumption  of  the  powers  con- 
ferred by  the  Constitution  upon  Congress.^^  Nor  should  there 
be  an  arbitrary  invasion  of  personal  rights  or  of  private  prop- 
erty, nor  should  such  burdens  be  imposed  upon  property  rights 
that  the  owner  will  thereby  be  unlawfully  deprived  of  the 
same/^ 

§  9.  Same  Subject — Limitations  Continued. 

In  New  York  the  Federal  and  State  Constitutions  control 
the  exercise  of  the  police  power;  and  the  public  generally  rather 
than  the  interests  of  a  particular  class  must  be  considered;  the 
exercise  of  the  power  must  not  be  unnecessarily  or  unduly  op- 
pressive but  must  be  reasonable  in  its  application,  while  the 
public  safety,  welfare,  health  and  morals  must  be  protected, 
nor  can  the  liberty  or  property  rights  of  individuals  be  arbi- 
trarily taken  away,  nor  can  they  unreasonably  be  restricted  or 
prevented  from  exercising  any  particular  profession  or  lawful 
occupation  or  pursuit  or  contracting  concerning  the  same.^' 
And  in  another  case  it  is  held  that  the  exercise  of  the  police 
power  may  and  should  have  reference  to  the  peculiar  situation 
and  needs  of  the  community,  and  is  not  necessarily  invalid  be- 
cause it  may  have  the  effect  of  levying  a  tax  upon  the  property 
affected,  if  its  main  purpose  is  to  protect  the  people  against 
fraud  and  wrong.^^  So  in  Wisconsin  this  power  is  limited  to  the 
extent  that  the  exercise  thereof  must  be  reasonable  both  as  to 
the  regulation  itself  and  the  subjects  to  be  regulated.^^  But 
uncompensated  obedience  to  a  regulation  enacted  for  the  pub- 
lic safety  under  the  police  power  of  the  State  is  not  a  taking 

25  Railroad  Co.  (Hannibal  &  St.  Joseph  Rd.  Co.)  v.  Husen,  95  U.  S.  465, 
24  L.  ed.  527. 

28  Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  State,  47  Neb.  549,  66  N.  W. 
624. 

27  People  V.  Murphy,  113  N.  Y.  Supp.  855,  129  App.  Div.  260,  rev'g  113 
N.  Y.  Supp.  854,  60  Misc.  536,  aff'd  88  N.  E.  17;  O.  J.  Gude  &  Co.  v.  Murphy, 
113  N.  Y.  Supp.  860,  129  App.  Div.  266,  aff'd  88  N.  E.  21. 

28  McLean  v.  Denver  &  Rio  Grande  R.  Co.,  203  U.  S.  38,  51  L.  ed.  78, 
27  Sup.  Ct.  1,  aff'g  78  Pac.  74. 

28  State  V.  Chittenden,  127  Wis.  468,  107  N.  W.  500. 

10 


§  10      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

of  property  without  due  compensation,  and  the  constitutional 
prohibition  against  the  taking  of  private  property  without 
compensation  is  not  intended  as  a  limitation  of  the  exercise  of 
those  police  powers  which  are  necessary  to  the  tranquillity  of 
every  well-ordered  community,  nor  that  general  power  over 
private  property  which  is  necessary  for  the  orderly  existence  of 
all  governments.^*'  The  Fourteenth  Amendment  to  the  Con- 
stitution does  not  limit  the  subjects  in  relation  to  which  the 
police  power  may  be  exercised  for  the  protection  of  its  citi- 
zens.^^  And  restraints  upon  the  proper  exercise  of  this  power 
by  the  States  are  not  imposed  by  the  due  process  of  law  clause 
of  the  Federal  Constitution .^^ 

So  the  interdiction  of  statutes  impairing  the  obligation  of 
contracts  does  not  prevent  a  State  from  properly  exercising  its 
police  powers  for  the  public  good  notwithstanding  contracts 
previously  entered  into  between  individuals  may  be  affected.^^ 

§  10.  Same  Subject — Legislative  Discretion— Interference 
of  Courts. 

While  the  police  power  of  the  State  is  subject  to  limitations 
there  is  a  wide  discretion  as  to  its  exercise  in  the  legislature, 
with  whose  determination  as  to  what  is  and  what  is  not  neces- 
sary the  courts  ordinarily  will  not  interfere,  except  where  prop- 
erty is  taken  for  which  compensation  must  be  made,  private 
interests  are  subservient  to  the  police  power  and  must  give  way 
to  general  schemes  for  the  public  health.^^  So  in  New  Jersey 
the  public  policy  of  that  State  is  a  creature  of  the  legislature, 
the  courts  do  not  form  it  but  merely  take  cognizance  thereof 

30  Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  Drainage  Comm'rs,  200  U.  S. 
561,  50  L.  ed.  596,  26  Sup.  Ct.  341,  aff'g  212  111.  10.3,  72  N.  E.  219. 

31  Minneapolis  &  St.  Louis  Ry.  Co.  v.  Beckwith,  129  U.  S.  26,  32  L.  ed. 
585,  9  Sup.  207,  considering  and  following  Missouri  Pacific  Ry.  Co.  v. 
Humes,  115  U.  S.  512,  6  Sup.  Ct.  110,  29  L.  ed.  463;  Soon  Hing  v.  Crowley, 
113  U.  S.  703,  28  L.  ed.  1145,  5  Sup.  Ct.  730;  Barbier  v.  Connolly,  113  U.  S. 
27,  28  L.  ed.  923,  5  Sup.  Ct.  357. 

32  Sprigg  V.  Garrett  Park,  89  Md.  406,  411,  43  Atl.  813. 

33  Manigault  v.  Springs,  198  U.  S.  473,  50  L.  ed.  274,  26  Sup.  Ct.  127. 

31  Manigault  v.  Springs,  198  U.  S.  473,  50  L.  ed.  274,  26  Sup.  Ct.  127, 
See  §§4,  5,  herein. 

20 


REGULATION    AND   CONTROL  §  11 

the  same  as  in  case  of  other  public  laws.^^  Again,  it  is  held  that 
in  the  exertion  of  its  police  power  the  legislature  is  vested  with 
a  large  discretion,  which,  if  exercised  bona  fide  for  protection  of 
the  public,  is  beyond  the  reach  of  judicial  inquiry.^  But  a 
wide  range  of  discretion  is  necessary  to  make  legislation  prac- 
tical and  the  courts  cannot  be  made  a  refuge  from  ill-advised, 
unjust  or  oppressive  laws.^'  It  has  also  been  decided,  that  in- 
asmuch as  the  range  of  the  States'  police  power  comes  very 
near  to  the  field  committed  by  the  Constitution  to  Congress,  it 
is  the  duty  of  the  courts  to  guard  vigilantly  against  any  need- 
less intrusion .2*  And  generally,  when  and  how  far  this  power 
may  be  legitimately  exercised  by  a  State  must  be  left  for  de- 
termination in  each  case  as  it  arises.^^  The  police  power  may, 
it  is  held,  be  asserted  directly  by  the  legislature,  or  may,  in  the 
absence  of  constitutional  restrictions,  be  delegated  to  several 
municipal  corporations  or  other  agencies  provided  for  its  ex- 
ercise.^" 

§  11.  Liberty  to  Contract— Interstate  Commerce— Police 
Power— Anti-Trust  Act— Combinations. 

The  United  States  Supreme  Court  recognizes  in  its  decisions 
the  broad  principle  of  the  freedom  of  commerce  between  the 
States,  and  the  right  of  citizens  of  one  State  to  freely  contract 
and  receive  and  send  merchandise  from  and  to  another  State, 

35  Bigelow  V.  Old  Dominion  Copper  Mining  &  Smelting  Co.  (N.  J.  Ch.), 
71  Atl.  153. 

36  Louisville  &  Nashville  R.  Co.  v.  Kentucky,  161  U.  S.  677,  40  L.  ed.  849, 
16  Sup.  Ct.  714  (a  case  of  railroad  competition;  consolidation  of  parallel 
lines;  construction  of  charter  power  to  unite  with  other  roads  as  not  au- 
thorizing purchase  or  lease,  or  any  union  of  franchises;  construction  of 
State  statute  as  not  authorizing  purchase  of  other  or  parallel  lines,  and 
constitutional  provision  forbidding  consolidation  as  constituting  legitimate 
exercise  of  the  police  power  of  the  State). 

37  District  of  Columbia  v.  Brooke,  214  U.  S.  138,  53  L.  ed.  941,  29  Sup.  Ct. 
560,  rev'g  29  App.  D.  C.  563. 

38  Railroad  Co.  (Hannibal  &  St.  Joseph  Rd.  Co.)  v.  Husen,  95  U.  S.  465, 
24  L.  ed.  527. 

39  Allgeyer  v.  Louisiana,  165  U.  S.  578,  17  Sup.  Ct.  427,  41  L.  ed.  832. 

« Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  Nebraska,  47  Neb.  549,  3 
Am.  &  Eng.  R.  Cas.  (N.  S.)  573,  41  L.  R.  A.  481,  66  N.  W.  624. 

21 


§  11      CONSTITUTIONAL  BASIS  OF  ACTIONS  AND  DEFENSES — 

and  also  the  want  of  power  of  one  State  to  destroy  contracts 
concerning  interstate  commerce,  valid  in  the  States  where 
made.^^ 

The  power  to  regulate  commerce  among  the  several  States 
was  vested  in  Congress  in  order  to  secure  equality  and  freedom 
in  commercial  intercourse  against  discriminating  State  legisla- 
tion; it  was  not  intended  that  the  power  should  be  exercised  so 
as  to  interfere  with  private  contracts  not  designed  at  the  time 
they  were  made  to  create  impediments  to  such  intercourse. 
Accordingly,  a  contract  between  a  railroad  company  and  an 
elevator  company,  that  the  latter  company,  in  consideration  of 
erecting  and  using  for  that  purpose  an  elevator,  should  have 
for  a  prescribed  term  the  handling,  at  a  stipulated  price,  of  all 
grain  brought  by  the  railroad  company  in  its  cars  to  the  city  of 
Dubuque,  on  the  Mississippi  River,  to  be  transmitted  to  a 
place  beyond,  did  not  cease  to  be  valid  and  binding  upon  the 
parties  because  afterwards,  by  the  construction  of  a  railroad 
bridge  across  the  Mississippi  at  Dubuque,  it  became  unnecessary 
for  the  railroad  company  or  its  lessee,  and  a  useless  expense  to 
it,  to  have  the  grain  brought  by  it  to  Dubuque  handled  at  that 
place.  The  enforcement  of  the  contract  after  the  construction 
of  the  bridge  was  not  an  interference  with  the  power  of  Congress 
to  regulate  commerce  between  the  States  .''^  Congress  may, 
however,  under  the  commerce  clause  of  the  Federal  Constitu- 
tion enact  such  legislation  as  shall  declare  void  and  prohibit 
the  performance  of  any  contract  between  individuals  or  cor- 
porations where  the  natural  and  direct  effect  of  such  a  contract 
shall  be,  when  carried  out,  to  directly  and  not  as  a  mere  inci- 
dent to  other  and  innocent  purposes,  regulate  to  any  extent 
interstate  or  foreign  commerce.  And  although  the  provision 
in  the  Constitution  regarding  the  liberty  of  the  citizen  is  to 

«  Adams  Express  Co.  v.  Iowa,  196  U.  S.  147,  49  L.  ed.  424,  25  Sup.  Ct.  185; 
American  Express  Co.  v.  Iowa,  196  U.  S.  133,  49  L.  ed.  417,  25  Sup.  Ct.  182; 
Vance  v.  Vanderhook  Co.,  170  U.  S.  438,  18  Sup.  Ct.  674,  42  L.  ed.  1100; 
Rhodes  v.  Iowa,  170  U.  S.  412,  18  Sup.  Ct.  664,  42  L.  ed.  1088;  Leisy  v. 
Hardin,  135  U.  S.  100,  34  L.  ed.  128,  10  Sup.  Ct.  681;  Bowman  v.  Chicago, 
125  U.  S.  465,  31  L.  ed.  700,  8  Sup.  Ct.  689,  1062. 

4-  Railroad  Co.  v.  Richmond,  19  Wall.  (86  U.  S.)  584,  22  L.  ed.  173. 

22 


REGULATION   AND   CONTROL  §  11 

some  extent  limited  by  this  commerce  clause,  still  the  power  of 
Congress  to  regulate  commerce  comprises  the  right  to  enact  a 
law  prohibiting  a  citizen  from  entering  into  those  private  con- 
tracts which  directly  and  substantially,  and  not  merely  indi- 
rectly, remotely,  incidentally  and  collaterally  regulate  to  a 
greater  or  less  degree,  commerce  among  the  States. ^^  So  even 
though  there  is  a  certain  freedom  of  contract  which  the  States 
cannot  destroy  by  legislative  enactment,  in  pursuance  whereof 
parties  may  seek  to  further  their  business  interests,  the  police 
power  of  the  States  extends  to  and  may  define  and  prohibit, 
under  penalties,  trusts  or  secret  arrangements  by  which,  al- 
though there  is  no  merger  of  interests  through  partnerships  or 
incorporation,  an  apparently  existing  competition  among  all 
the  dealers  in  a  community  in  one  of  the  necessaries  of  life  is 
substantially  destroyed;  and  such  an  enactment  is  not  in  con- 
flict with  the  Fourteenth  Amendment  as  to  a  person  convicted 
of  combining  with  others  to  pool  and  fix  the  price,  divide  the 
net  earnings  and  prevent  competition  in  the  purchase  and  sale 
of  grain.**  So  a  State  statute  prohibiting  combinations  of  in- 
surance companies  as  to  rates,  commissions,  and  manner  of 
transacting  business  is  not  unconstitutional  as  depriving  the 
companies  of  their  property  or  of  their  liberty  of  contract, 

«  Addyston  Pipe  &  Steel  Co.  v.  United  States,  175  U.  S.  1,  44  L.  ed.  136, 
20  Sup.  Ct.  96.  In  this  case  it  was  held  that  under  the  act  of  Congress  of 
July  2,  1890,  c.  647,  entitled,  "An  act  to  protect  trade  and  commerce  against 
unlawful  restraints  and  monopolies,"  any  agreement  or  combination  which 
directly  operates,  not  alone  upon  the  manufacture,  but  upon  the  sale, 
transportation  and  delivery  of  an  article  of  interstate  commerce,  by  pre- 
venting or  restricting  its  sale,  thereby  regulates  interstate  commerce  to  that 
extent,  and  thus  trenches  upon  the  power  of  the  National  Legislature,  and 
violates  the  statute.  The  contracts  considered  in  this  case  relate  to  the  sale 
and  transportation  to  other  States  of  specific  articles,  not  incidentally  or 
collaterally,  but  as  a  direct  and  immediate  result  of  the  combination  entered 
into  by  the  defendants;  and  they  restrained  the  manufacturing,  purchase, 
sale  or  exchange  of  the  manufactured  articles  among  the  several  States, 
and  enhanced  their  value,  and  thus  came  within  the  provisions  of  said  act; 
and  when  the  direct,  immediate  and  intended  effect  of  a  contract  or  combina- 
tion among  dealers  in  a  commodity  is  the  enhancement  of  its  price,  it 
amounts  to  a  restraint  of  trade  in  the  commodity,  even  though  contracts 
to  buy  it  at  the  enhanced  price  are  being  made. 

«  Smiley  v.  Kansas,  196  U.  S.  447,  49  L.  ed.  546,  25  Sup.  Ct.  276. 

23 


§  V2      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

witliin  the  meaning  of  the  Fourteenth  Amendment,  and  the 
auditor  of  the  State  will  not  be  enjoined  from  enforcing  the 
provisions  of  the  statute.^ 

§  12.  Liberty  to  Contract  Continued — Police  Power — 
Sales  on  Margins — Limitation  of  Liability — Mechanics' 
Liens — Insurance. 

A  State  constitutional  provision  may  prohibit  sales  on  mar- 
gins without  intrenching  upon  the  liberty  of  contract,  and  such 
prohibition  is  not  contrary  to  the  first  section  of  the  Four- 
teenth Amendment.'*^  Nor  is  a  statute  declaring  invalid  any 
contract  limiting  the  liability  of  a  railway  company  for  the 
negligence  of  a  fellow  servant  an  unwarranted  interference 
with  the  right  of  private  contracts;  nor  is  such  enactment  an 
arbitrary  and  unreasonable  exercise  of  the  police  power  of  the 
State .^^  Nor  is  liberty  to  contract  unreasonably  interfered 
with,  nor  is  the  owner  deprived  of  his  property  without  due 
process  of  law  by  a  State  statute  relating  to  the  filing  and  en- 
forcement of  mechanics'  liens,  and  such  enactment  is  not  un- 
constitutional.^* Again,  a  State  statute  which  provides  that 
any  person,  firm  or  corporation,  who  in  any  manner  whatever 
does  an  act  in  the  State,  to  effect  for  himself  or  another,  insur- 
es Carroll  v.  Greenwich  Ins.  Co.,  199  U.  S.  401,  50  L.  ed.  246,  26  Sup. 
Ct.  66. 

48  Otis  V.  Parker,  187  U.  S.  606,  23  Sup.  Ct.  168,  47  L.  ed.  323,  aff'g  130 
Cal.  322,  62  Pac.  521,  927  (under  Art.  IV,  §  26,  Const.  Cal.,  providing  that 
"all  contracts  for  the  sales  of  shares  of  the  capital  stock  of  any  corporation 
or  association,  on  margin,  or  to  be  delivered  at  a  future  day,  shall  be  void, 
and  any  money  paid  on  such  contracts  may  be  recovered  by  the  party  pay- 
ing it,  by  suit  in  any  court  of  competent  jurisdiction").  See  Booth  v. 
Illinois,  184  U.  S.  425,  46  L.  ed.  623,  22  Sup.  Ct.  425. 

*7  McGuire  v.  Chicago,  Budington  &  Quincy  Rd.  Co.,  131  Iowa,  340,  108 
N.  W.  902,  and  cases  cited  Id.,  383. 

48  Great  Southern  Fireproof  Hotel  Co.  v.  Jones,  193  U.  S.  532,  48  L.  ed. 
778,  24  Sup.  Ct.  576. 

When  State  labor  law  limiting  hours  of  work  is  not  a  legitimate  exercise  of 
the  police  power  of  the  State,  but  an  unnecessary,  unreasonable  and  arbi- 
trary interference  with  the  right  and  hberty  of  the  individual  to  contract, 
in  relation  to  labor,  and  as  such  in  conflict  with  and  void  under,  the  Federal 
Constitution.  Loclmer  v.  New  York,  198  U.  S.  45,  25  Sup.  Ct.  539,  49  L.  ed. 
93;  §  110,  Labor  Law  of  N.  Y. 

24 


REGULATION    AND   CONTROL  §  13 

ance  on  property  then  in  the  State,  in  any  marine  insurance 
company  which  has  not  complied  in  all  respects  with  the  laws 
of  the  State,  shall  be  subject  to  a  fine,  etc.,  is,  when  appUed  to 
a  contract  of  insurance  made  in  another  State  with  an  insurance 
company  of  such  State,  where  the  premiums  were  paid  and 
where  the  losses  were  to  be  paid,  a  violation  of  the  Constitution 
of  the  United  States."^ 

§  13.  Classification  Statutes— Fourteenth  Amendment. 

The  difference  between  the  extent  of  the  power  which  the 
State  may  exert  over  the  doing  of  business  within  its  borders 
by  an  individual,  and  that  which  it  can  exercise  as  to  corpora- 
tions, furnishes  a  distinction  authorizing  a  classification  be- 
tween the  two  which  does  not  violate  the  equal  protection 
clause  of  the  Fourteenth  Amendment.^"  So  a  reasonable 
classification  of  persons  according  to  occupation,  business  or 
other  circumstances,  for  legislative  purposes,  by  which  all  per- 
sons of  that  class  are  affected  alike,  is  not  a  violation  of  the 
Fourteenth  Amendment  to  the  Federal  Constitution,  or  of  a 
corresponding  provision  of  a  State  Constitution.-^^    It  is  also  a 

<9  AUgeyer  v.  Louisiana,  165  U.  S.  578,  41  L.  ed.  832,  17  Sup.  Ct.  427; 
Hooper  v.  California,  155  U.  S.  648,  39  L.  ed.  297,  15  Sup.  Ct.  207,  distin- 
guished, and  held  that  above  decision  is  not  intended  to  shake  its  authority. 

The  business  of  insurance  is  not  commerce.  See  §  55,  herein,  as  to  in- 
terstate commerce  insurance. 

50  Hammond  Packing  Co.  v.  Arkansas,  212  U.  S.  322,  29  Sup.  Ct.  370, 
53  L.  ed.  530. 

61  McGuire  v.  Chicago,  Burlington  &  Quincy  Rd.  Co.,  131  Iowa,  340, 
108  N.  W.  902.  The  court,  per  Weaver,  J.  (at  p.  350),  says:  "But  the  rea- 
sonable classification  of  persons  for  the  purposes  of  legislation,  according 
to  occupation,  business,  or  other  circumstances,  by  which  one  class  or  por- 
tion of  the  people  is  differentiated  from  other  portions  or  classes,  has  often 
been  held  not  to  be  a  violation  of  this  constitutional  guaranty.  The  mere 
fact  that  legislation  is  special,  and  made  to  apply  to  certain  persons  and  not 
to  others,  does  not  affect  its  validity,  if  it  be  so  made  that  all  persons  sub- 
ject to  its  terms  are  treated  alike  under  Uke  circumstances  and  condi- 
tions. *  *  *  Such  also  has  been  the  uniform  holding  of  this  court  with 
reference  to  the  corresponding  provision  in  our  State  Constitution,"  citing 
the  following  cases: 

United  States:  Duncan  v.  Missouri,  152  U.  S.  377,  14  Sup.  Ct.  570,  38 
L.  ed.  485;  Walston  v.  Nevin,  128  U.  S.  578,  9  Sup.  Ct.  192,  32  L.  ed.  544; 
Hayes  v.  Missouri,  120  U.  S.  68,  30  L.  ed.  578,  7  Sup.  Ct.  350. 

25 


§  13      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

general  rule  that  a  State  may,  without  violating  the  equal  pro- 
tection clause  of  the  Fourteenth  Amendment,  put  into  one 
class  all  engaged  in  business  of  a  special  and  public  character, 
and  require  them  to  perform  a  duty  which  they  can  do  better 
and  more  quickly  than  others,  and  impose  a  not  exorbitant 
penalty  for  the  nonperformance  thereof.^^ 

Massachusetts:  Commonwealth  v.  Railroad  Co.,  187  Mass.  436,  73  N.  E. 
530. 

Michigan:  People  v.  Smith,  108  Mich.  527,  66  N.  W.  382,  32  L.  R.  A. 
853,  62  Am.  St.  Rep.  715;  People  v.  Bellett,  99  Mich.  151,  57  N.  W.  1094, 
22  L.  R.  A.  696,  41  Am.  St.  Rep.  589. 

Missouri:  State  v.  Tower,  185  Mo.  79,  84  S.  W.  10,  68  L.  R.  A.  402. 

New  York:  People  v.  Walbridge,  6  Cow.  (N.  Y.)  512. 

North  Carolina:  Broadfoot  v.  Fayetteville,  121  N.  C.  422,  28  S.  E.  515, 
39  L.  R.  A.  245,  61  Am.  St.  Rep.  668. 

Ohio:  State  v.  Nelson,  52  Ohio  St.  88,  39  N.  E.  22,  26  L.  R.  A.  317. 

Tennessee:  Dugger  v.  Insurance  Co.,  95  Tenn.  245,  32  S.  W.  5,  28  L.  R.  A. 
796. 

52  Seaboard  Air  Line  Ry.  v.  Seegers,  207  U.  S.  73,  52  L.  ed.  108,  28  Sup. 
Ct.  28,  aff'g  73  S.  C.  71.  The  court,  per  Mr.  Justice  Brewer,  said:  "It  is 
contended  that  the  equal  protection  of  the  laws,  guaranteed  by  the  first 
section  of  the  Fourteenth  Amendment,  is  denied.  The  power  of  classifica- 
tion is  conceded,  but  this  will  not  uphold  one  that  is  purely  arbitrary. 
There  must  be  some  substantial  foundation  and  basis  therefor.  It  is  as- 
serted that  this  is  merely  legislation  to  compel  carriers  to  pay  their  debts 
within  a  given  time,  by  an  unreasonable  penalty  for  any  delay,  while  no 
one  else  is  so  punished,  and  that  there  is  no  excuse  for  such  distinction. 
(The  case  involved  the  constitutionaUty  of  a  State  statute  providing  for 
penalty  on  common  carriers  for  not  promptly  adjusting  damage  claims.) 
We  have  had  before  us  several  cases  involving  classification  statutes,  and 
while  the  principles  upon  which  classifications  maj^  rightfully  be  made  are 
clear  and  easily  stated,  yet  the  application  of  those  principles  to  the  different 
cases  is  often  attended  with  much  difficulty.  See  among  others  on  the  gen- 
eral principles  of  classification:  Barbier  v.  Connolly,  113  U.  S.  27,  28  L.  ed. 
923,  5  Sup.  Ct.  357;  Bell's  Gap  Rd.  Co.  v.  Pennsylvania,  134  U.  S.  232, 
33  L.  ed.  892,  10  Sup.  Ct.  533,  and  of  cases  making  appHcation  of  those 
principles:  Gulf,  Colorado  &  Santa  Fe  Ry.  Co.  v.  Ellis,  165  U.  S.  150,  41 
L.  ed.  666,  17  Sup.  Ct.  255;  Atchison,  Topeka  &  Santa  Fe  Rd.  Co.  v.  Mat- 
thews, 174  U.  S.  96,  43  L.  ed.  909,  19  Sup.  Ct.  609,  and  cases  cited  in  the 
opinion;  Erb  v.  Morasch,  177  U.  S.  584,  44  L.  ed.  897,  20  Sup.  Ct.  819; 
Fidelity  Mutual  Life  Assoc,  v.  Mettler,  185  U.  S.  308,  46  L.  ed.  922,  22  Sup. 
Ct.  662;  Farmers'  &  Merchants'  Ins.  Co.  v.  Dobney,  189  U.  S.  301,  23  Sup. 
Ct.  565,  47  L.  ed.  821  (aff'g  62  Neb.  213,  86  N.  W.  1070);  Missouri,  Kansas 
&  T.  Ry.  Co.  v.  May,  194  U.  S.  267,  48  L.  ed.  971,  24  Sup.  Ct.  638.  We  are 
of  the  opinion  that  this  case  comes  within  the  limits  of  constitutionality. 
It  is  not  an  act  imposing  a  penalty  for  the  nonpayment  of  debts."     The 

2() 


REGULATION   AND   CONTROL  §  14 

§  14.  Same  Subject. 

There  is  no  unjust  discrimination,  and  no  denial  of  the  equal 
protection  of  the  laws,  in  regulations  regarding  railroads,  which 
are  applicable  to  all  railroads  alike. '^^  "  It  is  too  late  in  the  day 
to  insist  that  special  legislation  affecting  the  rights  and  liabili- 
ties of  railroad  companies,  or  other  distinct  class  or  kind  of 
corporations,  constitutes  a  denial  of  the  equal  protection  of  the 
laws  simply  because  the  same  regulation  or  restriction  is  not 
extended  over  other  corporations  or  other  kinds  of  business."  ^ 

court  then  quotes  from  Best  v.  Seaboard  Air  Line  Rd.  Co.,  72  S.  C.  479,  484, 
and  adds:  "It  is  not  an  act  levelled  against  corporations  alone,  but  includes 
all  common  carriers.  The  classification  is  based  solely  upon  the  nature  of 
the  business,  that  being  of  a  public  character.  It  is  true  that  no  penalty  is 
cast  upon  the  siiipper,  yet  there  is  some  guarantee  against  excessive  claims 
in  that  *  *  *  there  can  be  no  award  of  a  penalty  unless  there  be  a 
recovery  of  the  full  amount  claimed.  Further,  the  matter  to  be  adjusted  is 
one  pecuHarly  within  the  knowledge  of  the  carrier." 

53  New  York  &  New  England  Rd.  Co.  v.  Bristol,  151  U.  S.  556,  14  Sup. 
Ct.  437,  33  L.  ed.  269,  case  aff'd  and  followed  in  New  York  &  New  England 
Rd.  Co.  v.  Woodruff,  153  U.  S.  689,  38  L.  ed.  869,  14  Sup.  Ct.  976. 

54  McGuire  v.  Chicago,  Burlington  &  Quincy  Rd.  Co.,  131  Iowa,  340,  383, 
108  N.  W.  902,  917. 

See  the  following  cases: 

United  States:  Cincinnati  Street  Ry.  Co.  v.  Snell,  193  U.  S.  30,  24  Sup. 
Ct.  319,  48  L.  ed.  604;  Tullis  v.  Lake  Erie  &  Western  Rd.  Co.,  175  U.  S, 
348,  20  Sup.  Ct.  136,  44  L.  ed.  192;  St.  Louis,  Iron  Mountain  &  St.  Paul  Ry. 
Co.  v.  Paul,  173  U.  S.  404,  19  Sup.  Ct.  419,  43  L.  ed.  746;  Orient  Insurance 
Co.  v.  Daggs,  172  U.  S.  557,  19  Sup.  Ct.  281,  43  L.  ed.  552;  Magoun  v.  Illinois 
Trust  &  Sav.  Bk.,  170  U.  S.  283,  42  L.  ed.  1037,  18  Sup.  Ct.  594;  St.  Louis 
&  San  Francisco  Ry.  Co.  v.  Matthews,  165  U.  S.  1,  17  Sup.  Ct.  243,  41  L.  ed. 
611;  Chicago,  Kansas  &  Western  Rd.  Co.  v.  Pontius,  157  U.  S.  209,  15 
Sup.  Ct.  585,  39  L.  ed.  675;  Pittsburgh,  Cincinnati,  Chicago  &  St.  Louis  Ry. 
Co.  V.  Backus,  154  U.  S.  421,  14  Sup.  Ct.  1114,  38  L.  ed.  1031;  Pacific  Ex- 
press Co.  V.  Seibert,  142  U.  S.  339,  35  L.  ed.  1035,  12  Sup.  Ct.  250;  Minne- 
apolis &  St.  Louis  Ry.  Co.  v.  Beckwith,  129  U.  S.  26,  9  Sup.  Ct.  207,  32 
L.  ed.  585;  Missouri  Pacific  Ry.  Co.  v.  Mackey,  127  U.  S.  205,  209,  8  Sup. 
Ct.  116,  32  L.  ed.  107;  Dow  v.  Beidelman,  125  U.  S.  680,  8  Sup.  Ct.  1028, 
31  L.  ed.  841;  Kentucky  Raih-oad  Tax  Cases  (Cincinnati,  New  Orleans  & 
Tex.  Pac.  Rd.  Co.  v.  Kentucky),  115  U.  S.  321,  29  L.  ed.  414,  6  Sup.  Ct.  57; 
Soon  King  v.  Crowley,  113  U.  S.  703,  28  L.  ed.  1145,  5  Sup.  Ct.  730. 

Illinois:  Peoria,  Decatur  &  Evansville  Rd.  Co.  v.  Duggan,  109  111.  537, 
50  Am.  Rep.  619. 

Iowa:  Gano  v.  Minneapolis  &  St.  Louis  Rd.  Co.,  114  Iowa,  713,  719,  87 
N.  W.  714,  55  L.  R.  A.  263,  89  Am.  St.  Rep.  393;  Burlington,  Cedar  Rapids 

27 


§  14      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

But  the  mere  fact  of  classification  is  not  sufficient  to  relieve  a 
statute  from  the  reach  of  the  equality  clause  of  the  Fourteenth 
Amendment,  and  in  all  cases  it  must  appear  not  merely  that  a 
classification  has  been  made,  but  also  that  it  is  based  upon 
some  reasonable  ground,  something  which  bears  a  just  and 
proper  relation  to  the  attempted  classification  and  not  a  mere 
arbitrary  selection.^^  Again,  a  State  statute  putting  all  non- 
resident domestic  corporations  having  their  places  of  business 
and  works  outside  the  State,  and  all  foreign  corporations  com- 
ing into  the  State,  on  the  same  footing  in  respect  to  service  of 
process,  and  making  the  State  auditor  their  attorney  in  fact  to 
accept  process,  is  a  reasonable  classification  and  not  unconsti- 
tutional as  denying  equal  protection  of  the  laws,  because  such 
provision  does  not  apply  to  all  corporations;  nor  does  it  deprive 
such  corporations,  without  due  process  of  law,  of  their  liberty  of 
contract;  nor  does  the  requirement  that  they  pay  such  auditor 
a  small  specified  annual  fee  for  services  amount  to  a  taking  of 
property  without  due  process  of  law.^^  Nor  does  the  Four- 
teenth Amendment  deprive  the  States  of  the  power  of  classifi- 
cation or  require  the  classification  to  be  logically  and  scientifi- 
cally accurate;  and  sufficiently  practical  reasons  exist  for  a 
classification  of  resident  and  nonresident  property  owners  in 
the  enforcement  of  police  regulations,  provided  that  the  act  is 
impartial  as  between  the  classes.    So  while  the  enforcement  of  a 

&  Northern  Ry.  Co.  v.  Dey,  82  Iowa,  312,  48  N.  W.  98,  12  L.  R.  A.  436, 
31  Am.  St.  Rep.  477. 

Kansas:  Missouri,  Kansas  &  Texas  Ry.  Co.  v.  Simonson,  64  Kan.  802, 
68  Pac.  653. 

Minnesota:  Cameron  v.  Chicago,  Milwaukee  &  St.  Paul  Ry.  Co.,  63  Minn. 
384,  65  N.  W.  652,  31  L.  R.  A.  553. 

Missouri:  Campbell  v.  Missouri  Pacific  Ry.  Co.,  121  Mo.  340,  25  S.  W. 
936,  25  L.  R.  A.  175,  42  Am.  St.  Rep.  530. 

Ohio:  State  v.  Nelson,  52  Ohio  St.  88,  39  N.  E.  22,  26  L.  R.  A.  317. 

55  Applied  in  case  of  State  statute  providing  as  to  presentation  of  certain 
claims,  the  institution  of  certain  suits  against  railway  corporations  and  for 
recovery  of  attorney's  fees  in  addition  to  amount  claimed;  statute  tested 
by  above  principles  held  not  sustainable.  Gulf,  Colorado  &  Santa  Fe  Ry. 
Co.  V.  ElUs,  165  U.  S.  150,  41  L.  ed.  666,  17  Sup.  Ct.  255. 

56  St.  Mary's  Petroleum  Co.  v.  West  Virginia,  203  U.  S.  183,  51  L.  ed. 
144,  27  Sup.  Ct.  132. 

28 


REGULATION    AND   CONTROL  §  15 

statute  enacted  under  the  police  power  by  criminal  proceed- 
ings against  resident  owners,  and  by  civil  proceedings  against 
nonresident  owners  is  a  discrimination,  if,  however,  it  is  justi- 
fied by  the  circumstances  it  does  not  render  the  statute  un- 
constitutional, nor  is  it  so  rendered  by  the  fact  that  the  remedy 
as  to  one  class  may  be  more  efficient  than  the  remedy  as  to  the 
other.^'^  So  a  provision  in  a  gas  rate  statute  establishing  one 
rate  for  the  municipality  and  another  for  individual  consumers 
is  not  an  unreasonable  classification  and  does  not  render  the 
act  unconstitutional  under  the  equal  protection  clause  of  the 
Fourteenth  Amendment.  And  where  none  of  the  different 
classes  of  consumers  complain  of  different  rates  the  corporation 
cannot  complain  of  such  differences  provided  the  total  receipts 
are  sufficient  to  yield  an  adequate  return.^* 

§  15.  Police  Power — Regulation  of  Slaughter  Houses  and 
Stock  Yards. 

A  State  may  provide  by  police  regulation  for  slaughter 
houses  of  a  corporation  by  a  grant  of  exclusive  right  or  privi- 
lege, guarded  by  proper  limitation  as  to  prices,  imposing  also 
the  duty  of  providing  ample  conveniences  with  permission  to  all 
owners  of  stock  to  land,  and  of  all  butchers  to  slaughter  at  such 
places.^^  So  the  legislature  may  define  public  stock  yards  and 
regulate  them  and  their  charges  when  not  made  unreasonable 
and  unjust  as  denying  their  owners  a  reasonable  return  on  their 
money  invested;  and  such  enactment  does  not  constitute  a  tak- 
ing of  private  property  without  due  process  of  law  or  just  com- 
pensation.^'' 

But  a  State  statute  entitled,  ''  an  act  defining  what  shall  con- 

87  District  of  Columbia  v.  Brooke,  214  U.  S.  138,  53  L.  ed.  941,  29  Sup. 
Ct.  560,  rev'g  29  App.  D.  C.  563,  citing  Field  v.  Barber  Asphalt  Co.,  194 
U.  S.  61S,  48  L.  ed.  1142,  24  Sup.  Ct.  784,  and,  in  qucere  as  to  police  power 
of  District  of  Columbia,  considering  United  States  v.  Delaware  &  Hudson 
Co.,  213  U.  S.  366,  53  L.  ed.  836,  29  Sup.  Ct.  527.  As  to  power  of  Congress  to 
enact  discriminatory  legislation  under  the  commerce  clause  see  §  45,  herein. 

58  Willcox  V.  Consolidated  Gas  Co.,  212  U.  S.  19,  29  Sup.  Ct.  392,  53  L.  ed. 
382. 

59  Slaughter  House  Cases,  16  Wall.  (S3  U.  S.)  36,  21  L.  ed.  394. 

60  Ratcliff  V.  Wichita  Union  Stock  Yards  Co.,  74  Kan.  1,  86  Pac.  150. 

29 


§  16      CONSTITUTIONAL    BASIS   OF   ACTIONS   AND    DEFENSES — 

stitute  public  stock  yards,  defining  the  duties  of  the  person  or 
persons  operating  the  same,  and  regulating  all  charges  thereof, 
and  removing  restrictions  in  the  trade  of  dead  animals,  and 
providing  penalties  for  violation  of  this  act,"  is  in  violation  of 
the  Fourteenth  Amendment  of  the  Constitution  of  the  United 
States,  where  it  applies  only  to  one  stock  yards  company,  and 
not  to  other  companies  or  corporations  engaged  in  like  business 
in  the  State  and  thereby  denies  to  that  company  the  equal  pro- 
tection of  the  laws.^^ 

§  16.  Regulation  and  Control— Insurance  Companies. 

What  has  been  said  elsewhere  in  regard  to  the  right  of  a 
State  to  prohibit  foreign  corporations  from  doing  business 
within  its  limits,  or,  in  allowing  them  to  do  so,  to  impose  such 
conditions  as  it  pleases,  applies  to  foreign  insurance  com- 
panies .'^^  And  as  the  State  has  the  right  to  exclude  such  com- 
pany, the  means  by  which  she  causes  such  exclusion,  or  the 
motives  of  her  action,  are  not  the  subject  of  judicial  inquiry .«» 

50  the  State  may  make  the  grant  or  privilege  of  doing  business 
therein  dependent  upon  the  payment  of  a  specific  license  tax, 
or  tax  on  its  franchise  or  business,  or  a  sum  proportioned  to  the 
amount  of  its  capital  used  within  the  State,  and  except  life  and 
foreign  insurance  companies  from  its  operation ;  ^^  or  it  may  im- 
pose a  license  tax  or  fee,  or  like  tax  by  whatever  name  it  may  be 
called,  upon  foreign  insurance  companies  for  the  privilege  of 
doing  business  in  the  State .^^    Returns  may  also  be  required  of 

61  Getting  V.  Kansas  City  Stock  Yards  Co.,  183  U.  S.  79,  22  Sup.  Ct.  30, 
46  L.  ed.  92. 

62  Whitfield  V.  ^tna  Life  Ins.  Co.,  205  U.  S.  489,  51  L.  ed.  894,  27  Sup. 
Ct.  578,  rev'g  144  Fed.  356;  Swing  v.  Weston  Lumber  Co.,  205  U.  S.  275, 

51  L.  ed.  799,  27  Sup.  Ct.  497,  aff'g  140  Mich.  344;  Orient  Ins.  Co.  v.  Daggs, 
172  U.  S.  557,  19  Sup.  Ct.  281,  43  L.  ed.  552,  28  Ins.  L.  J.  97,  aff'g  136  Mo. 
382,  35  L.  R.  A.  227,  38  S.  W.  85,  26  Ins.  L.  J.  67;  Doyle  v.  Continental  Ins. 
Co.,'  94  U.  S.  535,  24  L.  ed.  148.    See  §  18,  herein. 

«3  Doyle  V.  Continental  Ins.  Co.,  94  U.  S.  535,  24  L.  ed.  148. 

64  New  York  v.  Roberts,  171  U.  S.  658,  43  L.  ed.  345,  19  Sup.  Ct.  235. 

65  Philadelphia  Fire  Assoc,  v.  New  York,  119  U.  S.  110,  30  L.  ed.  342, 
7  Sup  Ct  108;  Home  Insurance  Co.  v.  Augusta,  93  U.  S.  116,  23  L.  ed.  825; 
Liverpool  Ins.  Co.  v.  Massachusetts,  10  Wall.  (77  U.  S.)  566,  19  L.  ed.  1029, 

30 


REGULATION    AND   CONTROL  §  17 

insurance  companies  to  the  proper  State  officers  of  their  busi- 
ness condition,  losses,  premiums,  taxes,  dividends,  expenses, 
etc.,  which  may  be  enforced  against  a  company  even  though 
its  special  charter  does  not  require  such  returns;  ^  so  a  statute 
may  constitutionally  prohibit  the  combination  of  insurance 
companies  for  fixing  rates  of  premium  except  in  cities  having  a 
certain  population;  nor  is  such  an  enactment  class  legislation.^^ 

§  17.  Same  Subject. 

A  legislative  enactment  of  a  State,  which  as  construed  by 
its  highest  court,  cuts  oft"  any  defense  by  a  life  insurance  com- 
pany based  upon  false  and  fraudulent  statements  in  the  ap- 
plication, unless  the  matter  misrepresented  actually  contributed 
to  the  death  of  the  insured,  and  which  applies  alike  to  domestic 
and  foreign  corporations  is  not  repugnant  to  the  Fourteenth 
Amendment,  and  does  not  deprive  a  foreign  corporation  coming 
into  the  State  of  its  liberty  or  property  without  due  process  of 
law,  nor  deny  to  it  the  equal  protection  of  the  laws;  and  the 
liberty  referred  to  in  the  Fourteenth  Amendment  is  the  liberty 
of  natural,  not  of  artificial  persons.®^  A  State  statute  may  also 
regulate  the  measure  of  damages  on  fire  policies  in  such  terms 
that  it  will  not  as  applied  to  a  foreign  insurance  company 
insuring  property  within  the  State  be  in  conflict  with  the  pro- 
visions of  the  Fourteenth  Amendment,  forbidding  a  State  to 
make  or  enforce  a  law  which  shall  abridge  the  privileges  or  im- 
munities of  citizens  of  the  United  States,  or  to  deprive  any  per- 
son of  life,  liberty  or  property  without  due  process  of  law;  or  to 

aff'g  Oliver  v.  Liverpool  &  London  Life  &  Fire  Ins.  Co.,  100  Mass.  531; 
Paul  V.  Virginia,  8  Wall.  (75  U.  S.)  168,  19  L.  ed.  357. 
«8  Eagle  Ins.  Co.  v.  Ohio,  153  U.  S.  446,  38  L.  ed.  778,  14  Sup.  Ct.  868. 

67  State,  Crow,  v.  .Etna  Ins.  Co.,  150  Mo.  113,  51  S.  W.  413,  28  Ins.  L.  J. 
856. 

68  Northwestern  Life  Ins.  Co.  v.  Riggs,  203  U.  S.  243,  27  Sup.  Ct.  126,  51 
L.  ed.  168,  aff'g  129  Fed.  207;  Rev.  Stat.  Mo.,  §§  7890,  7891. 

As  to  State  statute  making  suicide  no  defense  in  actions  on  life  policies,  see 
Whitfield  V.  ^tna  Life  Ins.  Co.,  205  U.  S.  489,  51  L.  ed.  894,  27  Sup.  Ct. 
578  (rev'g  144  Fed.  356,  distinguishing  Ritter  v.  Mutual  Life  Ins.  Co.,  169 
U.  S.  139,  154,  42  L.  ed.  693,  18  Sup.  Ct.  300);  Knights  Templars'  and 
Masons'  Life  Ins.  Co.  v.  Jarman,  187  U.  S.  197,  47  L.  ed.  139,  23  Sup.  Ct.  108. 

31 


§  18      CONSTITUTIONAL   BASIS   OF   ACTIONS   AND   DEFENSES — 

deny  to  any  person  within  its  jurisdiction,  the  equal  protection 
of  the  laws.^^  An  insurance  company  created  and  existing 
under  the  laws  of  a  State  has  a  constitutional  right  to  enter 
into  a  contract  in  that  State  for  the  purpose  of  insuring  prop- 
erty in  another  State,  and  the  provisions  of  an  insurance  law 
of  the  latter  State  are  void  so  far  as  they  interfere  with  such 
right7° 

§  18.  Regulation  and  Control — Instances — Mines — Hours 
of  Labor — Water  Companies — Adulteration — Ship  Passen- 
ger Laws— Patent  Rights. 

The  use  and  enjoyment  of  mining  properties  may  be  regu- 

89  Orient  Ins.  Co.  v.  Daggs,  172  U.  S.  557,  19  Sup.  Ct.  281,  43  L.  ed.  552, 
28  Ins.  L.  J.  97,  aff'g  136  Mo.  382,  35  L.  R.  A.  227,  38  S.  W.  85,  26  Ins. 
L.  J.  67. 

As  to  State  statutes  providing  for  damages,  etc.,  see  §  30,  herein. 

70  Hammond  v.  International  Ry.  Co.,  116  N.  Y.  Supp.  854,  a  case  of  an 
action  to  recover  assessments  on  a  fire  policy  on  property  located  in  New 
York  State,  issued  by  a  mutual  insurance  company  created  and  existing 
under  the  laws  of  Massachusetts  and  not  authorized  pursuant  to  the  pro- 
visions of  the  Insurance  Law  of  New  York,  Laws  1892,  pp.  1934,  1941, 
c.  690,  §§  9,  25  (Consol.  Stat.  N.  Y.,  1909,  "Insurance  Law"),  to  transact 
the  business  of  insurance  therein.  The  defense  was  that  the  contract  sued 
upon  was  made  in  the  State  of  New  York  and  was  therefore  void  under  the 
Insurance  Law,  Laws  1892,  p.  1999,  c.  690  (Consol.  Stat.  N.  Y.,  1909,  "In- 
surance Law"),  §  137,  providing  that:  "All  fire  insurance  pohcies  issued 
to  residents  of  this  State  on  property  located  herein  by  companies  that 
have  not  complied  with  the  requirements  of  the  general  insurance  laws  of 
the  State  shall  be  void,  except  such  as  shall  have  been  procured  "  by  duly 
licensed  agents  to  procure  such  insurance.  The  company  had  no  officers 
or  agents  in  New  York,  and  the  insurance  was  not  procured  by  a  duly 
licensed  agent,  but  was  obtained  through  letter  and  by  wire,  and  the  pohcy 
was  mailed  in  Boston.  It  was  dated  in  Massachusetts  and  was  executed 
and  payable  there;  the  premium  was  paid  there;  the  pohcy  was  held  a 
Massachusetts  contract  which  took  effect  when  mailed  in  Boston.  The 
court  cites  to  the  point  in  the  text  Allgeyer  v.  Louisiana,  165  U.  S.  578, 
17  Sup.  Ct.  427,  41  L.  ed.  832.  The  court  in  the  principal  case  also  cites  to 
point  that  the  contract  was  the  policy  and  not  the  preliminary  contract  to 
insure,  not  amounting  to  the  transaction  of  business  in  New  York.  Penn 
Collieries  Co.  v.  McKeever,  183  N.  Y.  98,  75  N.  E.  935,  2  L.  R.  A.  (N.  S.)  127, 
citing  further  to  point  that  policy  was  a  Massachusetts  contract  which  took 
effect  when  mailed  in  Boston.  Western  v.  Genesee  Mutual  Ins.  Co.,  12 
N.  Y.  258;  Baker  v.  Spaulding  Bros.,  71  Vt.  169,  42  Atl.  982;  Western  Mass. 

32 


REGULATION    AND   CONTROL  §  18 

lated  by  the  State/^  So  the  hours  of  labor  in  mines,  smelters, 
and  reduction  or  refining  works  may  be  regulated  by  the  police 
power  of  a  StateJ^  A  water  company  may  also  be  subject  to 
legislative  action  where  there  is  nothing  in  the  statute  under 
which  it  is  organized  or  in  any  contract  with  a  city  for  supply- 
ing water  which  give  it  rights  excluding  such  legislation^^ 
A  State  has  power  to  prevent  the  adulteration  of  articles  and 
to  provide  for  the  publication  of  their  composition  without 
depriving  the  manufacturers  thereof  of  their  property  or 
liberty  without  due  process  of  law  or  denying  them  the  equal 
protection  of  the  law  J"*  A  State  may  also  enact  passenger 
regulations  requiring  certain  reports  from  masters  of  vessels 
to  be  made  under  penalty  where  such  law  is  not  a  regulation 
of  commerce  but  of  police,  and  the  operation  of  the  law  only 
begins  when  that  of  the  laws  of  Congress  end,  and  is  not  of  the 
same  subject  although  it  operates  upon  the  same  person/^ 

F.  Ins.  Co.  V.  Hilton,  58  N.  Y.  Supp.  996,  42  App.  Div.  52,  and,  therefore, 
that  this  action  would  lie. 

VI  Washington  Star  Mining  Co.  v.  Fulton,  205  U.  S.  60,  51  L.  ed.  708,  27 
Sup.  Ct.  412. 

72  Short  V.  Bullion-Beck  &  C.  Min.  Co.,  20  Utah,  20,  45  L.  R.  A.  603,  57 
Pac.  720.  See  Holden  v.  Hardy,  169  U.  S.  366,  18  Sup.  Ct.  383,  42  L.  ed. 
780;  Commonwealth  v.  Hamilton  Mfg.  Co.,  120  Mass.  383;  State  v.  Holden 
(Holden  v.  Hardy),  14  Utah,  71,  96,  46  Pac.  756,  1105,  37  L.  R.  A.  103,  108. 
But  compare  Eight  Hours  Bill,  In  re,  21  Colo.  29,  39  Pac.  328;  Ritchie  v. 
People,  155  111.  98,  40  N.  E.  454,  29  L.  R.  A.  79;  Low  v.  Rees  Printing 
Co.,  41  Neb.  127,  59  N.  W.  362,  24  L.  R.  A.  702;  Wheeling  Bridge  &  T.  R. 
Co.  V.  Gilmore,  8  Ohio  C.  C.  658.  See  §§  26,  27,  herein,  as  to  employees, 
etc. 

73  Long  Island  Water  Supply  Co.  v.  Brooklyn,  166  U.  S.  685,  41  L.  ed. 
1165,  17  Sup.  Ct.  718. 

74  Heath  &  Milligan  Mfg.  Co.  v.  Worst,  207  U.  S.  338,  52  L.  ed.  236,  28 
Sup.  Ct.  114. 

75  New  York  v.  Miln,  11  Pet.  (36  U.  S.)  102,  9  L.  ed.  648.  Case  criticised 
and  weight  due  as  authority  considered  in  Henderson  v.  New  York,  92 
U.  S.  259,  23  L.  ed.  543,  where  the  court  holds  that  the  case  decides  no  more 
than  that  the  requirement  from  the  master  of  a  vessel  of  a  catalogue  of  his 
passengers  landed  in  the  city,  rendered  to  the  mayor  on  oath,  with  a  correct 
description  of  their  names,  ages,  occupations,  places  of  birth  and  last  legal 
settlement,  was  a  police  regulation  within  the  power  of  the  State  to  enact, 
and  not  inconsistent  with  the  Constitution  of  the  United  States.  Examine 
Oceanic  Steam  Navigation  Co.  v.  Stranahan,  214  U.  S.  320,  53  L.  ed.  1013, 
29  Sup.  Ct.  671,  aff'g  155  Fed.  428. 

3  33 


§  19      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEP^ENSES — 

So  a  State  may,  until  Congress  legislates,  make  such  reason- 
able regulations  in  regard  to  the  transfer  of  patent  rights  as 
will  protect  its  citizens  from  fraud  .'^^ 

§  19.  Regulation  and  Control — Foreign  Corporations — 
Rule." 

A  State  has  power  to  regulate  and  control  its  own  creations, 
and,  a  fortiori,  foreign  corporations  permitted  to  do  business 
within  its  limits;  '^  and  it  may  admit  the  latter  on  prescribed 
conditions,  that  is,  it  may  impose  such  conditions  upon  per- 
mitting them  to  do  business  within  its  limits  as  it  may  judge 
expedient  or  exclude  them  from  its  bordersJ^  So  the  right 
under  the  Constitution  to  pursue  a  lawful  business  is  not 
abridged  by  the  imposition  by  a  State  of  conditions  upon  the 
right  of  a  foreign  insurance  company  to  transact  business 
within  its  territorial  limits.*"  A  State  also  has  power  to  im- 
pose conditions  upon  a  foreign  corporation  in  permitting  it 
to  become  one  of  the  constituent  elements  of  a  consolidated 
corporation  organized  under  its  laws,  and  the  acceptance  of 
the  franchise  implies  a  submission  to  the  conditions  without 
which  the  franchise  could  not  have  been  granted.*^ 

76  Ozan  Lumber  Co.  v.  Union  County  Bank,  207  U.  S.  251,  52  L.  ed.  195, 
28  Sup.  Ct.  89,  following  Woods  &  Sons  v.  Carl,  203  U.  S.  358,  51  L.  ed.  219, 
27  Sup.  Ct.  99;  Allen  v.  Riley,  203  U.  S.  347,  51  L.  ed.  216,  27  Sup.  Ct.  95. 

77  See  §  16,  herein. 

78  St.  Mary's  Petroleum  Co.  v.  West  Virginia,  203  U.  S.  183,  51  L.  ed.  144, 
27  Sup.  Ct.  132;  Orient  Insurance  Co.  v.  Daggs,  172  U.  S.  557,  19  Sup.  Ct. 
281,  43  L.  ed.  552,  28  Ins.  L.  J.  97,  aff'g  136  Mo.  382,  35  L.  R.  A.  227,  38 
S.  W\  85,  26  Ins.  L.  J.  67.    See  Joyce  on  Franchises,  §§  342,  352-364  et  seq. 

79  Whitfield  V.  iEtna  Life  Insurance  Co.,  205  U.  S.  489,  51  L.  ed.  894,  27 
Sup.  Ct.  578,  rev'g  144  Fed.  356;  Swing  v.  Weston  Lumber  Co.,  205  U.  S. 
275,  51  L.  ed.  799,  27  Sup.  Ct.  497,  aff'g  140  Mich.  344;  Waters-Pierce  Oil 
Co.  V.  Texas,  177  U.  S.  28,  20  Sup.  Ct.  518,  44  L.  ed.  657;  New  York  v. 
Roberts,  171  U.  S.  658,  43  L.  ed.  345,  19  Sup.  Ct.  235;  La  Moine  Lumber  & 
Trading  Co.  v.  Kesterson  (U.  S.  C.  C),  171  Fed.  980.  See  Doyle  v.  Conti- 
nental Ins.  Co.,  94  U.  S.  535,  24  L.  ed.  148. 

80  Hickman  v.  State,  62  N.  J.  L.  499,  41  Atl.  942,  44  Atl.  1099.  See  Whit- 
field V.  ^tna  Life  Ins.  Co.,  205  U.  S.  489,  51  L.  ed.  894,  27  Sup.  Ct.  578, 
rev'g  144  Fed.  356;  Swing  v.  Weston  Lumber  Co.,  205  U.  S.  275,  51  L.  ed. 
799,  27  Sup.  Ct.  497,  aff'g  140  Mich.  344. 

81  Ashley  v.  Ryan,  153  U.  S.  436,  38  L.  ed.  773,  17  Sup.  Ct.  865. 

34 


REGULATION    AND    CONTROL  §  20 

§  20.  Same  Subject— Limitations  Upon  Rule. 

The  rule  stated  under  the  preceding  section  is  subject  to 
certain  limitations  as  to  interstate  and  foreign  commerce; 
thus,  statutes  which  inhibit  foreign  corporations  from  doing 
business  within  a  State,  or  which  impose  restrictions  thereon 
cannot  be  permitted  to  impair  the  power  of  Congress  to  regu- 
late commerce  among  the  several  States,  nor  can  they  operate 
to  restrict  the  rights  of  citizens  or  corporations  to  engage  in 
commerce  between  the  States;*^  nor  can  such  conditions  be 
repugnant  to  the  Constitution  and  laws  of  the  United  States, 
or  inconsistent  either  with  those  rules  of  public  law  which 
secure  the  jurisdiction  and  authority  of  each  State  from  en- 
croachment by  all  others,  or  those  principles  of  natural  justice 
which  forbid  condemnation  without  opportunity  for  defense.*^ 
Again,  a  foreign  corporation  lawfully  doing  business  in  a 
State  is  no  more  bound  by  a  general  unconstitutional  enact- 
ment than  a  citizen  of  that  State.^ 

So  where  a  foreign  corporation  holds  a  valid  mortgage  upon 
property  within  a  State  it  cannot  be  precluded  by  State  legis- 
lation from  foreclosing  the  same  because  it  has  not  complied 
with  such  laws,  as  such  an  enactment  violates  the  Fourteenth 
Amendment  in  not  affording  the  equal  protection  of  the  laws.®^ 

82  New  York  v.  Roberts,  171  U.  S.  658,  43  L.  ed.  345,  19  Sup.  Ct.  235; 
La  Moine  Lumber  &  Trading  Co.  v.  Kesterson  (U.  S.  C.  C),  171  Fed.  980. 

83  Cable  V.  United  States  Life  Ins.  Co.,  191  U.  S.  288,  24  Sup.  Ct.  74,  4S 
L.  ed.  188.  See  Whitfield  v.  ^tna  Life  Ins.  Co.,  205  U.  S.  489,  51  L.  ed.  894, 
27  Sup.  Ct.  578,  rev'g  144  Fed.  356. 

Si  Carroll  v.  Greenwich  Ins.  Co.,  199  U.  S.  401,  50  L.  ed.  246,  26  Sup.  Ct. 
66. 

85  Black  V.  Caldwell  (U.  S.  C.  C),  83  Fed.  880. 


35 


§  l!l       CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES- 


CHAPTER    III 


CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES— REGULA- 
TION   AND    CONTROL,    CARRIERS  ^ 


21.  Resulation  and  Control  — 

Transportation  Companies — 
Railroads — Street  Railroads 
—  Express  Companies. 

22.  Railroads — Obligation  of  Con- 

tract— Due  Process  of  Law. 

23.  Railroads — Obligation  of  Con- 

tract— E  xemption  and 
Transfer  T  h  e  r  e  o  f— D  u  e 
Process  of  Law. 

24.  State   Statutes  —  Railroad 

Crossings — Viaducts  and 
Bridges — Expense  of  Change 
of  Grade  or  Removal — 
Police  Power — Nonjudicial 
Question. 

25.  State  Statutes — Railroad  Tun- 

nels, Viaducts  and  Crossings 
— Expense  of  Removal  or 
Repairs — Vested  Rights. 


26.  Federal  antl  State  Regulations 

as  to  Employers  and  Em- 
ployees— Carriers,  etc. — Po- 
lice Power— Interstate  Com- 
merce. 

27.  Same  Subject. 

28.  Federal  Statute  to  Insure  Hu- 

mane Treatment  of  Live 
Stock  by  Carriers. 

29.  Right  of  State  to  Augment  or 

Limit  Carrier's  Liability. 

State  Statutes  Providing  for 
Damages — Presentation  and 
Adjustment  of  Claims — Pen- 
alty— Carriers — Railroads. 

Regulation  and  Control — Tele- 
graph and  Telephone  Com- 
panies —  Electrical  S  u  b  - 
ways. 


30 


31 


§  21.  Regulation  and  Control— Transportation  Companies 
—Railroads— Street  Railroads— Express  Companies. 

The  business  of  a  transportation  company  operating  under 
a  franchise  is  not  purely  private,  but  is  so  affected  by  a  public 
interest  that  it  is  subject,  within  constitutional  limits,  to  the 
governmental  power  of  regulation  .^  So  a  railroad  charter  is 
taken  and  held  subject  to  the  power  of  the  State  to  regulate 
and  control  the  grant  in  the  interest  of  the  public.^    So  rail- 

1  See  §  1,  herein. 

2  Honolulu  Rapid  Transit  &  Land  Co.  v.  Hawaii,  211  U.  S.  282,  29  Sup. 
Ct.  55,  53  L.  ed.  180,  rev'g  15  Hawaii,  553. 

3  Louisville  &  Nashville  Rd.  Co.  v.  Kentucky,  183  U.  S.  503,  46  L.  ed. 
298,  22  Sup.  Ct.  95. 

36 


REGULATION    AND   CONTROL,    CARRIERS  §  21 

road  corporations  are  subject  to  such  legislative  control  as 
may  be  necessary  to  protect  the  public  against  danger,  in- 
justice and  oppression.^  Such  companies  may  also  be  regu- 
lated as  to  their  State  business  either  by  direct  State  legisk, 
tion  or  by  administrative  bodies  endowed  with  power  to  that 
end,  as  the  business  of  such  corporations  is  of  a  public  nature 
and  the  public  has  an  interest  in  their  operation;  but  the 
power  to  regulate  cannot  be  so  arbitrarily  exercised  as  to 
infringe  upon  the  right  of  ownership  in  conflict  with  the  due 
process  and  equal  protection  clauses  of  the  Fourteenth  Amend- 
ment.^ So  within  the  power  of  the  State  to  regulate  and  con- 
trol it  may  require  railroad  companies  to  fence  their  roads.** 
The  power  to  regulate  the  operation  of  railroads  also  includes 
regulation  of  the  schedule  for  running  trains  '  and,  as  it  is  the 
proper  duty  of  a  railroad  company  to  establish  stations  at 
proper  places,  it  is  within  the  power  of  the  States  to  make  it 
'prima  facie  a  duty  of  such  companies  to  establish  them  at  all 
villages  and  boroughs  on  their  respective  lines.^  So  the  im- 
position upon  a  railroad  corporation  of  the  entire  expense  of 
a  change  of  grade  at  a  highway  crossing  does  no  violation  to 
the  Constitution  of  the  United  States,  if  the  statute  imposing 
it  provides  for  an  ascertainment  of  the  result  in  a  mode  suited 
to  the  nature  of  the  case,®  and  requiring  the  burden  of  a  pub- 
lic service  by  a  corporation,  in  consequence  of  its  existence 
and  of  the  exercise  of  privileges  obtained  at  its  request,  to  be 
borne  by  it,  is  neither  denying  to  it  the  equal  protection  of 

4  New  York  &  New  Eng.  Rd.  Co.  v.  Bristol,  151  U.  S.  55G,  14  Sup.  Ct. 
437,  38  L.  ed.  269. 

5  Atlantic  Coast  Line  Rd.  Co.  v.  North  Carolina  Corp.  Comm.,  206  U.  S. 
1,  51  L.  ed.  93,  27  Sup.  Ct.  585. 

e  Minneapolis  &  St.  Louis  Ry.  Co.  v.  Emmons,  149  U.  S.  364,  37  L.  ed.  769, 
13  Sup.  Ct.  870. 

7  Honolulu  Rapid  Transit  &  Land  Co.  v.  Hawaii,  211  U.  S.  282,  29  Sup. 
Ct.  55,  53  L.  ed.  186,  rev'g  15  Hawaii,  553. 

8  Minneapolis  &  St.  Louis  Ry.  Co.  v.  Minnesota  ex  rel.,  193  U.  S.  53,  48 
L.  ed.  614,  24  Sup.  Ct.  396. 

9  New  York  &  New  England  Rd.  Co.  v.  Bristol,  151  U.  S.  556,  14  Sup.  Ct. 
437,  33  L.  ed.  269,  case  aff'd  and  followed  in  New  York  &  New  England  Rd. 
Co.  V.  Woodruff,  153  U.  S.  689,  38  L.  ed.  869,  14  Sup.  Ct.  976. 

37 


§  21       CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSE 

the  laws,  nor  making  any  unjust  discrimination  against  it. 
Therefore  the  provisions  of  a  State  statute  requiring  the 
salaries  and  expenses  of  the  State  Railroad  Commission  to  be 
borne  by  the  several  corporations  owning  or  operating  rail- 
roads within  the  State,  are  not  in  conflict  with  the  provision 
in  the  Fourteenth  Amendment  to  the  Constitution  that  a 
State  shall  not  "deprive  any  person  of  life,  liberty  or  property 
without  due  process  of  law ;  nor  deny  to  any  person  within  its 
jurisdiction  the  equal  protection  of  the  laws."  ^"  So  the  State 
may  regulate  consolidation  of  common  carrier  corporations;^^ 
and  a  railroad  forming  a  continuous  line  in  two  or  more  States, 
and  owned  and  managed  by  a  corporation  whose  corporate 
powers  are  derived  from  the  legislature  of  each  State  in  which 
the  road  is  situated,  is,  as  to  the  domestic  traffic  in  each  State, 
a  corporation  of  that  State,  subject  to  State  laws  not  in  con- 
flict with  the  Constitution  of  the  United  States.^^  Again,  a 
city  has  power  to  make  a  reasonable  regulation  concerning  the 
use  of  the  street  by  a  street  railroad  company  by  directing 
the  maintenance  of  but  one  track  between  certain  points 
instead  of  a  double  track  as  originally  granted  to  the  company  .^^^ 
A  State  statute  which  defines  an  express  company  to  be 
persons  and  corporations  who  carry  on  the  business  of  trans- 
portation on  contracts  for  hire  with  railroad  or  steamboat 
companies  does  not  invidiously  discriminate  against  the  ex- 
press companies  defined  by  it,  and  in  favor  of  other  com- 
panies or  persons  carrying  express  matter  on  other  conditions, 
or  under  different  circumstances.^'* 

10  Charlotte,  Columbia  &  Augusta  R.  R.  Co.  v.  Gibbes,  142  U.  S.  386,  35 
L.  ed.  1051,  12  Sup.  Ct.  255,  48  Am.  &  Eng.  R.  Cas.  595;  Gen'l  Stat.  S.  C. 
1882,  c.  4. 

11  Louisville  &  Nashville  Rd.  Co.  v.  Kentucky,  161  U.  S.  677,  40  L.  ed. 

849,  16  Sup.  Ct.  714. 

12  Railroad  Commission  Cases  (Stone  v.  Farmers'  Loan  &  Trust  Co.),  110 
U.  S.  307,  29  L.  ed.  636,  6  Sup.  Ct.  334. 

13  Baltimore  v.  Baltimore  Trust  &  Guar.  Co.,  166  U.  S.  673,  41  L.  ed.  1160, 
17  Sup.  Ct.  696.  See  Wabash  Rd.  Co.  v.  Defiance,  167  U.  S.  88,  98,  17  Sup. 
Ct.  748,  42  L.  ed.  87.    Examine  Joyce  on  Electric  Law  (2d  ed.),  §§  353  et  seq. 

H  Pacific  Express  Co.  v.  Seibert,  142  U.  S.  339,  35  L.  ed.  1035,  12  Sup. 
Ct.  250. 
38 


REGULATION    AND    CONTROL,    CARRIERS  §  22 

§  22.  Railroads— Obligation  of  Contract— Due  Process  of 
Law. 

The  prohibition  in  the  Federal  Constitution  against  the 
passage  of  laws  impairing  the  obligation  of  contracts  applies 
to  the  Constitution  as  well  as  to  the  laws  of  each  State.^^  So 
municipal  legislation  passed  under  supposed  legislative  au- 
thority from  the  State  is  within  the  prohibition  of  the  Federal 
Constitution  and  void  if  it  impairs  the  obligation  of  a  contract.^^ 
But  a  municipal  ordinance  giving  permission  to  a  street  rail- 
road company  to  construct  a  tunnel  under  a  navigable  stream, 
the  law  of  the  State  providing  that  railways  shall  not  be  con- 
structed so  as  to  interrupt  the  navigation  of  any  water  in  the 
State,  does  not  amount  to  a  contract  under  the  contract  clause 
of  the  Constitution,  so  that  the  city  could  not  subsequently 
require  the  company  to  low^r  the  tunnel  so  as  not  to  interfere 
with  the  increased  demands  of  navigation;  nor,  in  the  absence 
of  any  provision  to  that  effect,  would  it  be  construed  as  con- 
taining an  implied  covenant  that  the  municipality  would  bear 
the  expense  of  such  alterations  required  by  subsequent  ordi- 
nances. A  municipality  is  under  the  duty  of  protecting  the 
unobstructed  navigation  of  navigable  rivers  under  its  jurisdic- 
tion; and  it  cannot  be  exempted  therefrom  by  making  agree- 
ments in  regard  thereto.^''  So  a  statute  which  describes  a  mode 
of  serving  process  upon  railroad  companies  different  from  that 
pro\ided  for  in  a  charter  previously  granted  to  a  particular 
company,  does  not  impair  the  obligation  of  the  contract  be- 
tween such  company  and  the  State  .^*  And  a  State  legislature 
may  make  any  alteration  or  amendment  of  a  charter  of  a 
public  service  corporation  which  will  not  defeat  or  substan- 

15  New  Orleans  Gas  Co.  v.  Louisiana  Light  Co.,  115  U.  S.  650,  29  L.  ed. 
615,  6  Sup.  Ct.  252. 

As  to  obligation  of  contract,  impairment  thereof  and  exemptions,  see 
Joyce  on  Franchises,  §§  301-340. 

18  Northern  Pacific  Ry.  Co.  v.  Duluth,  208  U.  S.  583,  52  L.  ed.  630,  28 
Sup.  Ct.  341. 

17  West  Chicago  Street  Railroad  Co.  v.  Chicago,  201  U.  S.  506,  50  L.  ed. 
845,  26  Sup.  Ct.  518,  aff'g  214  111.  9,  73  N.  E.  393. 

18  Raikoad  Co.  v.  Hecht,  95  U.  S.  168,  24  L.  ed.  423. 

39 


§  23      CONSTITUTIONAL   BASIS    OF   ACTIONS   AND   DEFENSES — 

tially  impair  the  object  of  the  grant  or  any  rights  vested  under 
it  where  such  charter  is  granted  subject  to  the  power  reserved 
by  statute  to  alter,  amend  or  repeal  the  same.^^  So  a  general 
law  requiring  street  railways  to  keep  a  certain  space  between 
and  outside  their  tracks  paved  and  repaved  and  assessing  them 
therefor  amounts,  in  respect  to  companies  whose  charters 
contain  other  provisions,  to  an  amendment  thereof,  and  as  such 
a  purpose  is  consistent  with  the  object  of  the  grant  it  falls 
within  the  reserved  power  of  the  State  to  alter,  amend  or  repeal 
the  original  charter,  and  if  imposed  in  good  faith  and  not  in 
sheer  oppression  the  act  is  not  void  either  as  depriving  the 
company  of  property  without  due  process  of  law  or  as  im- 
pairing the  obligation  of  the  original  grant.^" 

§  23.  Railroads— Obligation  of  Contract— Exemption  and 
Transfer  Thereof — Due  Process  of  Law.^^ 

Although  the  obligations  of  a  legislative  contract  granting 
immunity  from  the  exercise  of  governmental  authority  are 
protected  by  the  Federal  Constitution  from  impairment  by  the 
State,  the  contract  itself  is  not  property  which  as  such  can  be 
transferred  by  the  owner  to  another,  but  is  personal  to  him  to 
whom  it  is  made  and  incapable  of  assignment,  unless  by  the 
same  or  a  subsequent  law  the  State  authorizes  or  directs  such 
transfer,  and  this  applies  to  a  contract  of  exemption  with  a 
street  railway  company  from  assessments  from  paving  be- 
tween its  tracks.  Nor  does  a  legislative  authority  to  transfer 
the  estate,  property,  rights,  privileges  and  franchises  of  a  cor- 
poration to  another  corporation  authorize  the  transfer  of  a 
legislative  contract  of  immunity  from  assessment.  And  where 
a  corporation  incorporates  under  a  general  act  which  creart-es 

19  New  York  &  New  England  Rd.  Co.  v.  Bristol,  151  U.  S.  556,  38  L.  ed. 
•269,  14  Sup.  Ct.  437. 

As  to  reserved  power  to  alter,  amend  or  repeal  charter  or  franchise  see 
Joyce  on  Franchises,  §§  317  et  seq. 

20  Fair  Haven  Rd.  Co.  v.  New  Haven,  203  U.  S.  379,  51  L.  ed.  237,  27  Sup. 
Ct.  74,  aff'g  77  Conn.  677.    So  hold  as  to  Connecticut  law  of  1899. 

21  See  §  79,  herein. 

40 


REGULATION  AND  CONTROL,  CARRIERS        §  'S6 

certain  obligations  and  regulations,  it  cannot  receive  by  transfer 
from  another  corporation  an  exemption  which  is  inconsistent 
with  its  own  charter  or  with  the  Constitution  or  laws  of  the 
State  then  applicable,  even  though  under  legislative  authority 
the  exemption  is  transferred  by  words  which  clearly  include  it. 
Again,  although  two  corporations  may  be  so  united  by  one  of 
them  holding  the  stock  and  franchises  of  the  other,  that  the 
latter  may  continue  to  exist  and  also  to  hold  an  exemption 
under  legislative  contract,  that  is  not  the  case  where  its  stock 
is  exchanged  for  that  of  the  former  and  by  operation  of  law 
it  is  left  without  stock,  officers,  property  or  franchises,  but 
under  such  circumstances  it  is  dissolved  by  operation  of  the 
law  which  brings  this  condition  into  existence .^^  A  provision 
in  the  Constitution  of  a  State  that  a  carrier  must  deliver  cars 

22  Rochester  Ry.  Co.  v.  Rochester,  205  U.  S.  236,  51  L.  ed.  237,  27  Sup. 
Ct.  74.  See  Powers  v.  Detroit,  Grand  Haven  &  M.  Ry.  Co.,  201  U.  S.  543, 
26  Sup.  Ct.  556,  50  L.  ed.  860,  aff'g  138  Fed.  264  (when  exemption  from  tax- 
ation not  destroyed;  reorganization  of  railroad;  obhgation  of  contract); 
Metropolitan  St.  Ry.  Co.  v.  New  York  State  Board  Tax  Commissioners,  199 
U.  S.  1,  50  L.  ed.  65,  25  Sup.  Ct.  23  [(taxation;  exemption;  ecfual  protection; 
due  process  of  law;  obhgation  of  contract)  case  followed  in  Twenty-Third 
St.  Ry.  Co.  V.  New  York  State  Board  Tax  Commissioners,  199  U.  S.  53,  50 
L.  ed.  85,  25  Sup.  Ct.  715;  which  also  follows  Brooklyn  City  Rd.  Co.  v.  New 
York,  199  U.  S.  48,  50  L.  ed.  79,  25  Sup.  Ct.  713];  Savannah,  Thunderbolt  & 
Isle  of  H.  Rd.  Co.  v.  Savannah,  178  U.  S.  392,  49  L.  ed.  1097,  25  Sup.  Ct. 
690  (contract  between  street  railroad  and  city;  no  exemption;  obligation  of 
contract  not  impaired) ;  Wisconsin  &  Michigan  Ry.  Co.  v.  Powers,  191  U.  S. 
379,  48  L.  ed.  229,  24  Sup.  Ct.  107  (when  exemption  not  a  contract  between 
State  and  railroad  the  obligation  of  which  cannot  be  impaired^ ;  Stearns  v. 
Minnesota,  179  U.  S.  223,  21  Sup.  Ct.  23,  45  L.  ed.  162,  rev'g  72  Minn.  200, 
75  N.  W.  210  (exemption;  effect  of  subsequent  law  repealing);  Wilmington 
&  W.  Rd.  Co.  V.  Alsbrook,  146  U.  S.  279,  36  L.  ed.  972,  13  Sup.  Ct.  72  (ef- 
fect of  exemption  and  rule  as  to  being  a  contract  between  State  and  corpo- 
ration protected  against  legislative  impairment  considered  and  prior  cases 
examined);  Railroad  Companies  v.  Gaines,  97  U.  S.  697,  24  L.  ed.  1091 
(no  exemption  after  period  specified  in  charter;  grant  to  A.  did  not  convey 
exemption  to  B.);  Tucker  v.  Ferguson,  22  Wall.  (89  U.  S.)  527,  22  L.  ed.  805 
(exemption  must  be  based  upon  consideration,  otherwise  no  "contract"; 
no  presumption  in  favor  of  contract  of  exemption  and  such  a  claimed  con- 
tract must  be  strictly  construed) ;  Pacific  Railroad  Co.  v.  Maguire,  20  Wall. 
(87  U.  S.)  36,  22  L.  ed.  282  (exemption;  obligation  of  contract  impaired); 
Tomlinson  v.  Jessup,  15  Wall.  (82  U.  S.)  454,  21  L.  ed.  204  (exemption; 
power  reserved  to  State  authorized  change  in  contract). 

41 


§  23       CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

to  connecting  carriers  without  providing  adequate  protection 
for  their  return,  or  compensation  for  their  use,  amounts  to  a 
taking  of  property  without  due  process  of  law  within  the 
meaning  of  the  Fourteenth  Amendment  .^^ 

23  Louisville  &  Nashville  Rd.  Co.  v.  Central  Stock  Yards  Co.,  212  U.  S. 
132,  29  Sup.  Ct.  146,  rev'g  97  S.  W.  778. 

As  to  railroads  and  due  process  of  law  see  the  following  cases:  New  York 
Central  &  Hudson  R.  Rd.  Co.  v.  Miller,  202  U.  S.  584,  26  Sup.  Ct.  714,  50 
L.  ed.  1155  (taxation  of  cars  under  New  York  franchise  tax  law;  owner  not 
deprived  of  property  without  due  process  of  law) ;  Savannah,  Thunderbolt  & 
Isle  of  H.  Rd.  Co.  v.  Savannah,  198  U.  S.  392,  49  L.  ed.  1097,  25  Sup.  Ct.  690 
(classification  between  street  railway  and  steam  railroad  making  extra 
charge  for  local  deliveries  of  freight  from  outside  city;  tax  not  void  as  de- 
priving street  railway  of  property  without  due  process  of  law) ;  Minneapolis 
&  St.  L.  Rd.  Co.  V.  Minnesota,  193  U.  S.  53,  48  L.  ed.  614,  24  Sup.  Ct.  396 
(statutes  requiring  railroad  to  erect  and  maintain  stations  on  order  of  com- 
mission not  a  taking  of  property  without  due  process  of  law) ;  Detroit,  Fort 
Wayne  &  Belle  Isle  Ry.  Co.  v.  Osborn,  189  U.  S.  383,  47  L.  ed.  860,  23  Sup. 
Ct.  540,  aff'g  127  Mich.  219,  86  N.  W.  842  (commissioner  of  railroads  has 
power  to  compel  street  railroads  to  install  safety  appliances  and  apportion 
cost  between  it  and  steam  railroad  on  same  street) ;  Wheeler  v.  New  York, 
New  Haven  &  Hartford  Rd.  Co.,  178  U.  S.  321,  44  L.  ed.  1085,  20  Sup.  Ct. 
949  (contract  with  city  to  pay  certain  proportion  of  expense  of  abolishing 
grade  crossings;  defendants  whose  lands  were  sought  to  be  condemned,  not 
alleging  that  they  were  taxpayers  or  specially  interested  not  deprived  of 
property  without  due  process  of  law) ;  Lake  Shore  &  Michigan  Southern  Ry. 
Co.  V.  Smith,  173  U.  S.  684,  19  Sup.  Ct.  565,  43  L.  ed.  858,  rev'g  Smith  v. 
Lake  Shore  &  Michigan  Southern  Ry.  Co.,  114  Mich.  460,  72  N.  W.  328, 
4  Det.  L.  N.  662,  8  Am.  &  Eng.  R.  Cas.  (N.  S.)  496  (statute  as  to  mileage 
tickets  on  railroads  a  violation  of  due  process  of  law  clause);  Smyth  v. 
Ames,  169  U.  S.  466,  42  L.  ed.  819,  18  Sup.  Ct.  418,  30  Chicago  Leg.  N.  243, 
171  U.  S.  361,  18  Sup.  Ct.  888,  43  L.  ed.  197  (act  to  regulate  railroads,  clas- 
sify freights,  and  fix  reasonable  maximum  rates  a  deprivation  of  just  com- 
pensation secured  by  Constitution) ;  St.  Louis  &  San  Francisco  Ry.  Co.  v. 
Mathews,  165  U.  S.  1,  41  L.  ed.  611,  17  Sup.  Ct.  243  (statute  making  rail- 
roads liable  in  damages  for  fire  communicated  by  locomotives  held  not  to 
deprive  company  of  property  without  due  process  of  law) ;  St.  Louis  &  S.  F. 
Ry.  Co.  V.  Gill,  156  U.  S.  649,  15  Sup.  Ct.  484,  39  L.  ed.  567  (railroad  rates; 
unreasonable  legislative  regulation;  company  deprived  of  property  with- 
out due  process);  Charlotte,  Columbia  &  Augusta  Rd.  Co.  v.'  Gibbes,  142 
U.  S.  386,  35  L.  ed.  1051,  12  Sup.  Ct.  255,  48  Am.  &  Eng.  R.  Cas.  595  (stat- 
ute requiring  railroads  to  bear  expenses  of  State  Railroad  Commission  not 
a  deprivation  of  property  without  due  process);  Chicago,  MinneapoUs  & 
St.  Paul  Ry.  Co.  v.  Minnesota,  134  U.  S.  418,  33  L.  ed.  970,  10  Sup.  Ct.  462 
(railroad  freight  rate  act  in  conflict  with  due  process  clause);  Huling  v. 
Kaw  Valley  R.  &  I.  Co.,  130  U.  S.  559,  32  L.  ed.  1045,  9  Sup.  Ct.  603  (pub- 

42 


REGULATION    AND   CONTROL,    CARRIERS  §  24 

§  24.  State  Statutes— Railroad  Crossings — Viaducts  and 
Bridges — Expense  of  Change  of  Grade,  or  Removal —Police 
Power — Nonjudicial  Question.-^ 

The  act  of  the  legislature  of  a  State  relating  to  railway  grade 
crossings,  which  is  directed  to  the  extinction  of  grade  crossings 
as  a  means  of  public  safety,  is  a  proper  exercise  of  the  police 
power  of  the  State .^  So  in  view  of  the  paramount  duty  of  a 
State  legislature  to  secure  the  safety  of  the  community  at  an 
important  railroad  crossing  within  a  populous  city,  it  was  and 
is  within  its  power  to  supervise,  control  and  change  agreements 
from  time  to  time  entered  into  between  the  city  and  the  rail- 
road company  as  to  a  viaduct  over  such  crossing,  saving  any 
lights  previously  vested .^^ 

It  is  likewise  competent  for  the  legislature  of  the  State  to 
put  the  burdens  of  the  repairs  of  such  a  viaduct,  crossing  sev- 
eral railroads,  upon  one  of  the  companies,  or  to  apportion  it 
among  all,  as  it  sees  fit;  and  an  apportionment  may  be  made 
through  the  instrumentality  of  the  City  Council. ^^  A  State 
may  also  impose  upon  a  railroad  corporation  the  entire  expense 
of  a  change  of  grade  at  a  highway  crossing,  if  the  statute  im- 

lished  notice  in  proceedings  to  condemn  land  for  railroad  is  "  due  process  of 
law");  Nashville,  Chattanooga  &  St.  Louis  Rd.  Co.  v.  Alabama,  128  U.  S. 
96,  9  Sup.  Ct.  28,  32  L.  ed.  352  (examination  of  railroad  employes;  color 
blindness;  not  a  taking  of  property  without  due  process  of  law);  Dow  v. 
Beidelman,  125  U.  S.  680,  8  Sup.  Ct.  1028,  31  L.  ed.  841  (maximum  fare 
statute;  not  a  taking  of  property  as  apphed  to  reorganized  corporation); 
Railroad  Co.  v.  Richmond,  96  U.  S.  521,  24  L.  ed.  734  (ordinance  prohibiting 
steam  cars  of  specified  railroad  in  city  limits  not  a  taking  of  company's 
property  without  due  process  of  law). 
2-1  See  §§  107  et  seq.,  herein.  Railroad  Commissioners. 

25  New  York  and  New  England  Rd.  Co.  v.  Bristol,  151  U.  S.  556,  14  Sup. 
Ct.  437,  38  L.  ed.  269,  case  aff'd  and  followed  in  New  York  &  New  England 
Rd.  Co.  V.  Woodruff,  153  U.  S.  689,  38  L.  ed.  869,  14  Sup.  Ct.  976.  Act  of 
June  19,  1889,  c.  220,  Laws  1889,  134. 

26  Chicago,  B.  &  Q.  R.  R.  Co.  v.  Nebraska,  170  U.  S.  57,  18  Sup.  Ct.  513, 
42  L.  ed.  948. 

That  city  has  power  to  change  grade  of  streets,  crossing  on  bridges  over 
a  railroad,  to  the  level  of  the  railroad,  see  Wabash  Railroad  Co.  v.  Defiance, 
167  U.  S.  88,  42  L.  ed.  87,  17  Sup.  Ct.  748. 

27  Chicago,  B.  &  Q.  R.  R.  Co.  v.  Nebraska,  170  U.  S.  57,  18  Sup.  Ct.  513. 
42  L.  ed.  946. 

43 


§  24      CONSTITUTIONAL   BASIS    OF   ACTIONS    AND    DEFENSES — 

posing  it  provides  for  an  ascertainment  of  the  result  in  a  mode 
suited  to  the  nature  of  the  case."* 

Under  the  laws  of  Illinois  the  draining  of  bodies  of  land  so 
as  to  make  them  fit  for  human  habitation  and  cultivation,  is 
a  public  purpose,  to  accomplish  which  the  State  may  by  ap- 
propriate agencies  exert  the  general  powers  it  possesses  for 
the  common  good,  and  the  Farm  Drainage  Act  of  that  State 
was  a  proper  exercise  of  its  police  power.  The  rights  of  a  rail- 
road company  to  a  bridge  over  a  natural  water  course  crossing 
its  right  of  way,  acquired  under  its  general  corporate  power 
of  Illinois  are  not  superior  and  paramount  to  the  right  of  the 
public  to  use  that  water  course  for  the  purpose  of  draining 
lands  in  its  vicinity  in  accordance  with  plans  adopted  by  a 
drainage  commission  lawfully  constituted  under  such  Farm 
Drainage  Act.  So  where  the  proper  drainage  of  the  land  in  a 
certain  district  was  impossible  without  the  removal  of  a 
railroad  bridge  over  the  natural  water  course  into  which  the 
lands  drained  and  the  construction  of  a  bridge  with  a  larger 
opening  for  the  increased  volume  of  water,  it  was  held  that  it 
was  the  duty  of  the  railroad  company,  at  its  own  expense,  to 
remove  the  then  existing  bridge,  and  also,  unless  it  abandoned 
or  surrendered  its  right  to  cross  a  creek  at  or  in  that  vicinity, 
to  erect  at  its  own  expense  and  maintain  a  new  bridge  in 
conformity  with  regulations  established  by  the  Drainage  Com- 
missioners, under  the  authority  of  the  State;  and  such  require- 
ment, if  enforced,  does  not  amount  to  a  taking  of  private 
property  for  public  use  within  the  meaning  of  the  Constitution, 
nor  to  a  denial  of  the  equal  protection  of  the  laws.^*'  What  is 
the  best  method  of  eliminating  a  grade  crossing  in  a  given  case 
is  an  administrative  question  pure  and  simple  which  cannot 
constitutionally  be  made  the  subject-matter  of  judicial  de- 
termination; and,  therefore,  a  statute  which  purports  to  give 
jurisdiction  of  such  a  question  to  a  purely  judicial  body  or 

28  New  York  &  New  England  Rd.  Co.  v.  Bristol,  151  U.  S.  556,  38  L.  ed. 
269,  14  Sup.  Ct.  437. 

29  Chicago,  Burlington  &  Quincy  Ry.  Co.  v.  Drainage  Comm'rs,  200  U.  S. 
561,  26  Sup.  Ct.  341,  50  L.  ed.  596,  aff'g  212  111.  103,  72  N.  E.  219. 

44 


REGULATION    AND   CONTROL,    CARRIERS  §  25 

court,  on  appeal  from  the  action  of  railroad  commissioners  is, 
to  that  extent,  null  and  void.^° 

§  25.  State  Statutes— Railroad  Tunnels,  Viaducts  and 
Crossings— Expense  of  Removal  or  Repairs — Vested  Rights.^^ 

The  right  of  a  railroad  company  to  maintain  a  tunnel  under 
a  navigable  river  is  subject  to  the  paramount  public  right  of 
navigation,  and  where  it  has  been  constructed  under  municipal 
ordinance  and  State  law  that  it  shall  not  interrupt  navigation, 
the  duty  of  not  obstructing  the  navigation  is  a  continuing  one; 
and  if  the  increased  demands  of  navigation  at  any  time  require 
a  deeper  channel  than  when  the  tunnel  was  originally  con- 
structed, it  is  within  the  power  of  the  municipality  to  compel 
the  railroad  company  at  the  latter's  own  expense  to  either 
remove  the  tunnel  or  lower  it  to  conform  with  the  necessities 
of  commerce,  and,  as  in  this  case,  to  the  rule  established  by 
act  of  Congress;  and  such  action  of  the  municipality  is  not 
unconstitutional,  and  does  not  amount  either  to  taking  the 
property  for  public  use  without  compensation,  or  depriving 
the  company  of  its  property  without  due  process  of  law.^^ 
An  ordinance  of  a  municipality,  valid  under  the  law  of  the  State 
as  construed  by  its  highest  court,  compelling  a  railroad  to 
repair  a  viaduct  constructed  after  the  opening  of  the  railroad, 
by  the  city  in  pursuance  of  a  contract  relieving  the  railroad, 
for  a  substantial  consideration,  from  making  any  repairs 
thereon  for  a  term  of  years  was  not  void  under  the  contract, 
or  the  due  process  clause  of  the  Constitution.^^  But  the  right 
of  a  State  to  alter  or  repeal  existing  charters  is  not  without 
limitation  when  the  question  of  vested  property  rights  under 
the  charter  is  involved.    The  power  is  one  of  regulation  and 

30  Spencer's  Appeal,  78  Conn.  301. 

31  See  §§  107  et  seq.,  herein,  Railroad  Commissioners. 

32  West  Chicago  Street  Railroad  Co.  v.  Chicago,  201  U.  S.  506,  50  L.  ed. 
845,  26  Sup.  Ct.  578,  aff'g  214  111.  9,  73  N.  E.  393.  Following  Chicago, 
Burlington  &  Quincy  Rd.  Co.  v.  Drainage  Commission,  200  U.  S.  561,  50 
L.ed.  596,  26Sup.  Ct.  341. 

33  St.  Paul,  MinneapoHs  &  Manitoba  Ry.  Co.  v.  Minnesota,  214  U.  S.  497, 
29  Sup.  Ct.  698,  aff'g  Northern  Pacific  Ry.  v.  Duluth,  208  U.  S.  583,  52  L. 
ed.  630,  28  Sup.  Ct.  341,  as  involving  almost  the  same  question. 

45 


§  26      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

control  and  does  not  authorize  interference  with  property 
rights  vested  under  the  power  granted.  This  applies  to  a  case 
where  a  railroad  company  has,  by  acquiring  a  right  of  way  and 
by  constructing  its  railroad  under  a  statute  in  force  at  the 
time,  requiring  railroads  thereafter  crossing  to  pay  all  the 
expense  of  constructing  and  maintaining  such  crossing,  ac- 
quired a  vested  property  right  which  cannot  be  divested  with- 
out compensation  under  a  reserve  power  to  alter  or  amend  its 
charter,  and  it  cannot  therefore  be  charged  with  such  expense 
by  a  subsequent  statute  where  another  railroad  thereafter  seeks 
to  cross  its  lines  .^^ 

§  26.  Federal  and  State  Regulations  as  to  Employers  and 
Employes — Carriers,  etc. — Police  Power — Interstate  Com- 
merce. 

It  is  within  the  power  of  the  State  to  change  or  modify,  in 
accord  with  its  conceptions  of  public  policy,  the  principles  of 
the  common  law  in  relation  to  master  and  servant;  and  in 
cases  within  the  proper  scope  of  the  police  power,  to  impose 
upon  the  master  liability  for  the  willful  act  of  his  employe  .^^ 
The  power  of  Congress  to  regulate  interstate  commerce  is 
plenary,  and,  as  an  incident  to  this  power,  Congress  may 
regulate  by  legislation  the  instrumentalities  engaged  in  the 
business,  and  may  prescribe  the  number  of  consecutive  hours 
an  employe  of  a  carrier  so  engaged  shall  be  required  to  remain 
on  duty;  and  when  it  does  legislate  upon  the  subject,  its  act 
supersedes  any  and  all  State  legislation  on  that  particular 
subject.^^    So  the  act  of  Congress  of  March  4,  1907,  making 

34  State  ex  rel.  Northern  Pac.  Ry.  Co.  v.  Railroad  Commission  (Wis., 
1909),  121  N.  W.  919. 

35  Wilmington  Mining  Co.  v.  Fulton,  205  U.  S.  60,  51  L.  ed.  708,  27  Sup. 
Ct.  412. 

38  State  ex  rel.  Atkinson  v.  Northern  Pacific  Ry.  Co.,  53  Wa^.  673,  676, 
102  Pac.  876,  877,  "  In  fact  these  propositions  can  hardly  be  said  to  be  de- 
batable in  the  State  courts,  since  the  Federal  courts,  whose  decisions  are 
authoritative  on  questions  of  this  character,  have  repeatedly  announced 
them  as  governing  principles  in  determining  the  validity  of  regulative  leg- 
islation concerning  carriers  of  interstate  commerce.  Escanaba  Co.  v.  Chi- 
cago, 107  U.  S.  678,  2  Sup.  Ct.  185,  27  L.  ed.  442;  Morgan  Steamship  Co.  v. 
Louisiana  Board  of  Health,  118  U.  S.  455,  6  Sup.  Ct.  1114,  30  L.  ed.  237; 

46 


REGULATION    AND    CONTROL,    CARRIERS  §  26 

it  uulawlul  for  any  cominon  carrier  to  require  employes  to 
remain  on  duty  lor  a  longcu-  period  than  sixteen  consecutive 
hours,  and  providing  that  the  act  shall  "take  effect  and  be  in 
force  one  year  after  its  passage,"  did  not  take  effect  as  a  law 
until  the  end  of  such  period,  and  it  did  not  supersede,  during 
such  year,  a  prior  State  statute  on  the  same  subject  ^^  upon 
any  principle  of  comity,  or  upon  the  theory  that  Congress  had 
occupied  the  field  of  statutory  regulation  and  fixed  a  reason- 
able time  to  allow  carriers  to  comply  with  the  regulations.^* 
But  an  act  addressed  to  all  common  carriers  engaged  in  inter- 
state commerce,  and  imposing  a  liability  upon  them  in  favor 
of  any  of  their  employes,  without  qualification  or  restriction 
as  to  the  nature  of  the  business  at  the  time  of  an  injury,  of 
necessity  includes  subjects  wholly  outside  of  the  power  of 
Congress  under  the  commerce  clause  of  the  Constitution.  By 
virtue,  however,  of  the  constitutional  grant  of  authority  to 
regulate  interstate  commerce  and  to  use  all  means  appropriate 
to  the  exercise  of  the  powers  conferred.  Congress  has  power  to 
regulate  the  relation  of  master  and  servant  to  the  extent  that 
such  regulations  are  confined  solely  to  interstate  commerce.^'' 
So  the  Employers'  Liability  Act  of  Congress  does  not  constitute 
either  an  unreasonable  or  arbitrary  classification  although  it 
abolishes  the  fellow  servant  rule  and  restricts  or  limits  its 
application  to  carriers  by  rail."*"    The  Federal  Supreme  Court 

Nashville,  Chattanooga  &  St.  Louis  Ry.  v.  Alabama,  128  U.  S.  96,  9  Sup. 
Ct.  28,  32  L.  ed.  352;  Gladson  v.  Minnesota,  166  U.  S.  427,  17  Sup.  Ct.  627, 
41  L.  ed.  1064;  Lake  Shore  &  Michigan  Southern  Ry.  Co.  v.  Ohio,  173  U.  S. 
285,  19  Sup.  Ct.  465,  43  L.  ed.  7U2;  Erb  v.  Morasch,  177  U.  S.  1,  20  Sup.  Ct. 
819,  44  L.  ed.  897,"  per  Fullerton,  J. 

37  Laws  1907,  p.  25. 

38  State  ex  rel.  Atkinson  v.  Northern  Pac.  Ry.  Co.,  53  Wash.  673,  102 
Pac.  876. 

39  Employers'  Liability  Cases,  207  U.  S.  463,  52  L.  ed.  297,  28  Sup.  Ct.  141. 
See  Watson  v.  St.  Louis,  L  M.  &  S.  Ry.  Co.  (U.  S.  C.  C),  169  Fed.  942,  944- 
946,  948,  950,  952;  Fulgham  v.  Midland  Valley  R.  Co.  (U.  S.  C.  C),  167  Fed. 
66o',  66l';  United  States  v.  Wheeling  &  L.  E.  R.  Co.  (U.  S.  C.  C),  167  Fed. 
198,  199,  200;  Ivy  v.  Western  Union  Teleg.  Co.  (U.  S.  C.  C),  165  Fed.  371, 
377;  United  States  v.  Southern  Ry.  Co.,  164  Fed.  347,  350. 

40  Watson  v.  St.  Louis,  I.  M.  &  S.  Ry.  Co.,  162  Fed.  942;  Act  of  April  22, 
1908,  35  Stat.  65. 

47 


§  26      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSP^S — 

did  not,  however,  in  its  decision  of  the  Employers'  Liability 
Cases'*^  hold  the  act  of  1906^  unconstitutional  so  far  as  it 
related  to  the  District  of  Columbia  and  the  Territories,  and 
expressly  refused  to  interpret  the  act  as  applying  only  to  such 
employes  of  carriers  in  the  District  and  Territories  as  were 
engaged  in  interstate  commerce.  The  evident  intent  of  Con- 
gress in  enacting  said  Employers'  Liability  Act,  was  to  enact 
the  curative  provisions  of  the  law  as  applicable  to  the  District 
of  Columbia  and  the  Territories  under  its  plenary  power  ir- 
respective of  the  interstate  commerce  feature  of  the  act,  and 
although  unconstitutional  as  to  the  latter  as  held  in  the  above- 
mentioned  case,  it  is  constitutional  and  paramount  as  to  com- 
merce wholly  in  the  District  and  Territories.  Said  enactment 
of  1906  being,  therefore,  a  constitutional  regulation  of  com- 
merce in  the  District  of  Columbia  and  the  Territories  neces- 
sarily supersedes  prior  territorial  legislation  on  the  same 
subject,  and  noncompliance  by  a  plaintiff  employe  with  a  pro- 
vision of  a  territorial  statute  cannot  be  pleaded  by  the  de- 
fendant employer  as  a  bar  to  an  action  for  personal  injuries.'^ 

As  to  classification,  unreasonable  discrimination,  fellow  servants  and  dif- 
ferent class  of  employes,  see  the  following  cases: 

United  States:  Tullis  v.  Lake  Erie  &  Western  Rd.  Co.,  175  U.  S.  348,  20 
Sup.  Ct.  136,  44  L.  ed.  192;  St.  Louis,  Iron  Mountain  &  St.  Paul  Ry.  Co.  v. 
Paul,  173  U.  S.  404,  19  Sup.  Ct.  419,  43  L.  ed.  746;  Minneapolis  &  St.  Louis 
Ry.  Co.  V.  Herrick,  127  U.  S.  210,  8  Sup.  Ct.  1176,  32  L.  ed.  109;  Missouri 
Pac.  Ry.  Co.  v.  Mackey,  127  U.  S.  205,  8  Sup.  Ct.  1161,  32  L.  ed.  107;  Kane 
V.  Erie  Rd.  Co.,  133  Fed.  681,  67  C.  C.  A.  653,  68  L.  R.  A.  790. 

Indiana:  Pittsburgh,  Cincinnati  &  St.  Louis  Ry.  Co.  v.  Montgomery,  152 
Ind.  1,  49  N.  E.  582,  69  L.  R.  A.  875,  71  Am.  St.  Rep.  301. 

Maryland:  Shaffer  &  Munn  v.  Union  Mining  Co.,  55  Md.  74. 

Minnesota:  Herrick  v.  Minneapolis  &  St.  Louis  Ry.  Co.,  31  Minn.  11,  16 
N.  W.  413,  47  Am.  Rep.  771. 

Tennessee:  Harbison  v.  Knoxville  Iron  Co.,  103  Tenn.  421,  53  S.  W.  955, 
56  L.  R.  A.  316,  76  Am.  St.  Rep.  682. 

Vermont:  Kilpatrick  v.  Grand  Trunk  Ry.  Co.,  74  Vt.  288,  52  Atl.  531,  93 
Am.  St.  Rep.  887. 

«  207  U.  S.  463,  52  L.  ed.  297,  28  Sup.  Ct.  141. 

42  Act  of  June  11,  1906,  c.  3073,  34  Stat.  232. 

43  El  Paso  &  Northeastern  Ry.  Co.  v.  Gutierrez,  215  U.  S.  87,  54  L.  ed. 
— ,  30  Sup.  Ct.  — ,  aff'g  117  S.  W.  426,  and  approving  Hyde  v.  Southern 
Ry.  Co.,  30  App.  D.  C.  — . 

48 


HE(JULATION    AND    CONTROL,    CARRIERS  §  26 

A  State  statute  which  imposes  upon  railway  companies  lia- 
bility for  damages  for  the  negligence  of  fellow  servants  regard- 
less of  any  contract  of  insurance,  or  relief  entered  into  between 
the  person  injured  and  the  corporation,  prior  to  the  injury,  by 
which  such  liability  was  limited,  is  not  repugnant  to  the  Con- 
stitution.'*^ Nor  does  a  State  statute  which  provides  that, 
"Every  railroad  company  organized  or  doing  business  in  this 
State  shall  be  liable  for  all  damages  done  to  any  employe  of 
such  company  in  consequence  of  any  negligence  of  its  agents, 
or  by  any  mismanagement  of  its  engineers,  or  other  employes, 
to  any  person  sustaining  such  damage,"  deprive  a  railroad 
company  of  its  property  without  due  process  of  law;  and  does 
not  deny  to  it  the  equal  protection  of  the  laws;  and  is  not  in 
conflict  with  the  Fourteenth  Amendment  to  the  Constitution 
of  the  United  States  in  either  of  these  respects.^  But  the  real 
and  substantial  relation  or  connection  with  the  commerce  to 
be  regulated  which  is  necessary  to  the  power  to  regulate  inter- 
state commerce,  or  to  prescribe  rules  by  which  such  commerce 
must  be  governed,  does  not  exist  between  the  membership  of 
an  employe  in  a  labor  organization  and  the  interstate  commerce 
with  which  he  is  connected ;  and  an  act  of  Congress  making  it  a 
criminal  offense  against  the  United  States  for  a  carrier  engaged 
in  interstate  commerce,  or  an  agent  or  officer  thereof,  to  dis- 
charge an  employe  simply  because  of  his  membership  in  a  labor 
organization  cannot  be  sustained  as  a  regulation  of  interstate 
commerce  and  as  such  within  the  competency  of  Congress. 
Such  an  enactment  concerning  interstate  carriers  is  also  an 
invasion  of  personal  liberty,  as  well  as  of  the  right  of  property 
guaranteed  by  the  Fifth  Amendment  to  the  Federal  Constitu- 
tion, and  is  therefore  unenforceable  as  repugnant  to  the  declara- 

«McGuire  v.  Chicago,  Burlington  &  Quincy  Rd.  Co.,  131  Iowa,  340,  108 
N.  W.  902,  Code,  §  2071. 

45  Missouri  Pac.  Ry.  Co.  v.  Mackey,  127  U.  S.  205,  8  Sup.  Ct.  1161,  32  L. 
ed.  107.  Compiled  Laws,  Kan.,  1881,  p.  784.  See  TuUis  v.  Lake  Erie  & 
Western  R.  Co.,  175  U.  S.  348,  44  L.  ed.  192,  20  Sup.  Ct.  136  (State  statute 
providing  for  liability  for  damages  for  personal  injury  suffered  by  its  em- 
ploy6  in  certain  cases;  negligence  of  fellow  servant;  held  not  to  violate 
Fourteenth  Amendment) 

4  49 


§  27       CONSTITUTIONAL    BASIS    OK    ACTIONS    AND    DEFENSES — 

lion  of  that  amendment  that  no  person  shall  be  deprived  of 
liberty  or  property  without  due  process  of  law.-*^ 

§  27.  Same  Subject. 

A  State  may  provide  for  the  protection  of  servants  and  em- 
ployes of  a  railroad.^'  So  the  object  of  the  Safety  Appliance 
Act  was  to  protect  the  lives  and  limbs  of  railroad  employes  by 
rendering  it  unnecessary  for  men  operating  the  couplers  to  go 
between  the  ends  of  the  cars,  and  the  words  ''used  in  moving 
interstate  traffic"  occurring  therein  are  not  to  be  taken  in  a 
narrow  sense.  This  enactment,  which  declares  it  to  be  un- 
lawful for  any  common  carrier  engaged  in  interstate  com- 
merce to  haul  or  permit  to  be  hauled  or  used  on  its  line  any  car 
used  in  moving  interstate  commerce  not  equipped  with  couplers 
coupling  automatically  by  impact,  and  which  can  be  un- 
coupled without  the  necessity  of  men  going  between  the  ends 
of  the  cars,  also  relates  to  all  kinds  of  cars  running  on  the  rails, 
including  locomotives  and  steam  shovel  cars.^*  A  statute  may 
provide  for  the  examination  and  licensing  of  locomotive  en- 
gineers by  a  board  of  examiners  where  such  regulation  relates 
to  persons  within  the  territorial  jurisdiction  and  is  intended 
to  secure  the  safety  of  persons  and  property  for  the  public, 
and  it  does  not  burden  or  impede  interstate  commerce,  or 
conflict  with  the  Federal  Constitution,  or  with  any  express 
enactments  of  Congress  upon  the  subject.^^ 

A  State  statute  which  requires  locomotive  engineers  and 
other  persons,  employed  by  a  railroad  company  in  a  capacity 
which  calls  for  ability  to  distinguish  and  discriminate  between 
color  signals,  to  be  examined  in  this  respect  from  time  to  time 
by  a  tribunal  established  for  the  purpose,  and  which  exacts  a 

46  Adair  v.  United  States,  208  U.  S.  161,  28  Sup.  Ct.  277,  52  L.  ed.  436. 

47  St.  Louis,  I.  M.  &  St.  P.  R.  Co.  v.  Paul,  173  U.  S.  404,  43  L.  ed.  746,  19 
Sup.  Ct.  419,  64  Ai-k.  83,  37  L.  R.  A.  504,  7  Am.  &  Eng.  Corp.  Cas.  772,  40 
S.  W.  705. 

48Schlemmer  v.  Buffalo,  Rochester  &  Pittsburg  Ry.  Co.,  205  U.  S.  1,  51 
L.  ed.  681,  27  Sup.  Ct.  407,  rev'g  207  Pa.  St.  98;  Safety  AppUance  Act  of 
March  2,  1893,  §  2,  as  amended  April  1,  1896.  See  Johnson  v.  Southern 
Pacific  Co.,  196  U.  S.  1,  16,  21,  49  L.  ed.  872,  25  Sup.  Ct.  158. 

49  Smith  V.  Alabama,  124  U.  S.  465,  31  L.  ed.  508,  8  Sup.  Ct.  564. 

50 


REGULATION    ANI^    CONTROL,    CARRIERS  §  27 

fe(^  from  the  company  for  the  service  of  examination,  does  not 
deprive  the  company  of  its  property  without  due  process  of 
law  and  so  far  as  it  affects  interstate  commerce,  is  within  the 
competency  of  the  State  to  enact,  until  Congress  legislates  on 
the  subject.^*^  So  a  State  may,  in  the  exercise  of  its  police 
powers,  regulate,  by  an  eight-hour  law,  the  period  of  employ- 
ment by  corporations  of  workingmen  in  mines,  smelters  and 
other  institutions  for  the  reduction  or  refining  of  ores  or  metals, 
with  an  exception  in  certain  cases  of  emergency,  and  such  enact- 
ment does  not  violate  the  provisions  of  the  Fourteenth  Amend- 
ment by  abridging  the  privileges  or  immunities  of  its  citizens, 
or  by  depriving  them  of  their  property  or  by  denying  them  the 
equal  protection  of  the  laws.^^ 

In  the  exercise  of  its  powers  the  State  may  by  statute  pro- 
vide that  eight  hours  shall  constitute  a  day's  work  for  all 
laborers  employed  by  or  on  behalf  of  the  State  or  any  of  its 
municipalities,  and  make  it  unlawful  for  anyone  thereafter  con- 
tracting to  do  any  public  work  to  require  or  permit  any  laborer 
to  work  longer  than  eight  hours  per  day  except  under  certain 
specified  conditions  and  require  such  contractors  to  pay  the 
current  rate  of  daily  wages.  And  one  who  after  the  enact- 
ment of  such  a  statute  contracts  for  such  public  work  is  not 
by  reason  of  its  provisions  deprived  of  his  liberty  or  his  prop- 
erty without  due  process  of  law  nor  denied  the  equal  protec- 
tion of  the  laws  within  the  meaning  of  the  Fourteenth  Amend- 
ment even  though  it  appear  that  the  current  rate  of  wages 
is  based  on  private  work  where  ten  hours  constitute  a  day's 
work  or  that  the  work  in  excess  of  eight  hours  per  day  is  not 
dangerous  to  the  health  of  the  laborers.  Qucere,  whether  a 
similar  statute  applicable  to  laborers  on  purely  private  work 
would  be  constitutional,  not  decided .^^  Congress  may,  within 
its  constitutional  powers,  enact  a  law  limiting  the  hours  of 

50  Nashville,  Chattanooga  &  St.  Louis  Rd.  Co.  v.  Alabama,  128  U.  S.  96, 
9Sup.  Ct.  28,  32L.  ed.  352. 

51  Holden  v.  Hardy,  169  U.  S.  366,  42  L.  ed.  780,  18  Sup.  Ct.  383.    See 
§  17,  herein. 

52  Atkins  V.  Kansas,  191  U.  S.  207,  24  Sup.  Ct.  124,  48  L.  ed.  148,  aff'g 
State  V.  Atkins,  64  Kan.  174,  67  Pac.  519,  97  Am.  St.  Rep.  343. 

51 


§  28      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

laborers  and  mechanics  employed  by  the  United  States,  or 
contractor,  or  subcontractor,  upon  any  of  the  public  works 
of  the  United  States  to  eight  hours  a  day  except  in  cases  of 
extraordinary  emergency,  and  impose  penalties  for  the  viola- 
tion of  such  law.^^  A  State  may  provide  for  the  payment 
monthly  of  employes  of  corporations  and  give  a  lien  for  wages 
with  preference  over  other  liens,  with  certain  exceptions,  and 
allow  a  reasonable  attorney's  fee  in  case  of  action  brought,  and 
such  enactment  does  not  violate  a  State  constitutional  pro- 
vision as  to  deprivation  of  property  without  due  process  of 
law  nor  interfere  with  liberty  of  contract.^^  A  State  enactment 
may  also  provide  for  the  payment  of  wages  of  discharged  em- 
ployes then  earned  at  the  contract  rate,  without  deductions 
for  prepayment  and  for  the  continuance  of  the  wages  at  such 
rate  until  the  same  are  paid,  with  a  time  limit,  however,  unless 
action  is  commenced  within  the  time,  and  such  a  statute  does 
not  deprive  a  railroad  company  of  the  equal  protection  of  the 
laws.^^  So  a  State  enactment  requiring  the  redemption  in 
cash  of  store  orders  or  other  evidences  of  indebtedness  issued 
by  employers  in  payment  of  wages  due  to  employes,  does  not 
conflict  with  any  Federal  constitutional  provisions  relating  to 
contracts  .^^ 

§  28.  Federal  Statute  to  Insure  Humane  Treatment  of 
Live  Stock  by  Carriers. 

An  act  of  Congress  to  insure  the  humane  treatment  of  ani- 
mals while  in  transportation  by  carriers  by  limiting  their 
period  of  confinement  in  transit  without  unloading  for  rest, 

53  Ellis  V.  United  States  (Eastern  Dredging  Co.  v.  United  States;  Bay 
State  Dredging  Co.  v.  United  States),  206  U.  S.  246,  51  L.  ed.  1047,  27  Sup. 
Ct.  600. 

54  Skinner  v.  Gkimett  Gold  Min.  Co.,  96  Fed.  735,  Cal.  Stat.  1897,  p.  231, 

§§•1,2. 

55  St.  Louis,  I.  M.  &  St.  P.  R.  Co.  v.  Paul,  64  Ark.  83,  37  L.  R.  A.  504,  7  Am. 
&  Eng.  Corp.  Cas.  772,  40  S.  W.  705,  173  U.  S.  404,  43  L.  ed.  746,  19  Sup. 
Ct.  419. 

56  Knoxville  Iron  Co.  v.  Harbison,  183  U.  S.  13,  46  L.  ed.  55,  22  Sup.  Ct. 
5  (S.  C,  78  Iowa,  740).  followed  in  Dayton  Coal  &  Iron  Co.  v.  Barton,  183 
U.  S.  23,  46  L.  ed.  61,  22  Sup.  Ct.  5. 

52 


REGULATION    AND   CONTROL,    CARRIERS  §  29 

water  and  feed,  and  the  other  purpose  of  which  is  to  subserve 
the  interests  of  the  owner  or  shipper  as  far  as  possible  in 
consonance  with  such  treatment  by  permitting  an  extension 
of  the  time  so  limited  upon  written  request  of  the  owner  or 
person  in  custody  of  the  shipment  does  not  constitute  a  dele- 
gation of  legislative  power  or  authority  to  the  owner  of  the 
stock  shipped;  nor  does  such  legislation  deal  with  a  classifica- 
tion and  is,  therefore,  not  unconstitutional.^^ 

§  29.  Right  of  State  to  Augment  or  Limit  Carriers'  Lia- 
bility. 

In  the  absence  of  action  by  Congress  a  State  may  by  statute 
determine,  and  either  augment  or  lessen  a  carrier's  liability,  and 
such  a  statute  limiting  the  right  of  recovery  of  certain  classes 
of  persons  does  not  deprive  a  person  injured  thereafter  of  a 
vested  right  of  property.  And  although  a  citizen  has  a  right 
to  travel  from  one  State  to  another,  in  the  absence  of  con- 
gressional action  he  does  not  possess  as  an  incident  of  such 
travel  the  right  to  exert  in  a  State  in  which  he  may  be  injured 
a  right  of  recovery  not  given  by  the  laws  thereof,  although  that 
right  may  be  given  by  the  laws  of  other  States  including  the 
one  in  which  suit  is  brought.  A  classification  with  a  railroad 
company's  employes  of  all  persons,  including  railway  postal 
clerks,  not  passengers,  but  so  employed  in  and  about  the  rail- 
road as  to  be  subject  to  greater  peril  than  passengers,  is  not 
so  arbitrary  as  to  deprive  the  railway  postal  clerk  of  the  equal 
protection  of  the  laws  within  the  meaning  of  the  Fourteenth 
Amendment.  So  a  State  statute  providing  that  any  person, 
not  a  passenger,  employed  in  or  about  a  railroad  but  not  an 
employe,  shall  in  case  of  injury  or  loss  of  life  have  only  the 
same  right  of  recovery  as  though  he  were  an  employe,  is  not 
void,  either  because  contrary  to  the  power  delegated  to  Con- 
gress to  establish  post  offices  and  post  roads;  or  because  re- 
pugnant to  the  commerce  clause  of  the  Constitution;  or  in 
conflict  with  the  due  process  or  equal  protection  clauses  of  the 

57  United  States  v.  Oregon  R.  &  Nav.  Co.  (U.  S.  C.  C),  163  Fed.  640;  Act 
of  Congress,  June  29,  1906,  c.  3594,  34  Stat.  607;  U.  S.  Comp.  Stat.  Supp. 
1907,  p.  918. 

53 


§  30      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

Fourteenth  Amendment;  or  because  it  abridges  the  privileges 
and  immunities  of  citizens  of  the  United  States;  and  whether  a 
railway  postal  clerk  is  a  passenger  or  whether  his  right  of  re- 
covery is  limited  by  such  statute  is  not  a  Federal  question.^* 
It  is  also  held  that  while  Congress  under  its  power  may  provide 
for  contracts  for  interstate  commerce  permitting  the  carrier  to 
limit  its  liability  to  a  stipulated  valuation,  it  does  not  appear 
that  Congress  has,  up  to  the  present  time,  sanctioned  contracts 
of  this  nature;  and,  in  the  absence  of  congressional  legislation 
on  the  subject,  a  State  may  require  common  carriers,  although 
in  the  execution  of  interstate  business,  to  be  liable  for  the 
whole  loss  resulting  from  their  own  negligence,  a  contract  to 
the  contrary  notwithstanding.  There  is  no  difference  in  the 
application  of  a  principle  based  on  the  manner  in  which  a  State 
requires  a  degree  of  care  and  responsibility,  whether  enacted 
into  a  statute  or  resulting  from  the  rules  of  law  enforced  in  its 
courts.^'' 

§  30.  State  Statutes  Providing  for  Damages — Presenta- 
tion and  Adjustment  of  Claims — Penalty — Carriers — Rail- 
roads. 

Where  Congress  has  power  to  make  acts  illegal  it  can  au- 
thorize a  recovery  for  damage  caused  by  those  acts  although 
suffered  wholly  within  the  boundaries  of  one  State .^°  A  State 
may  provide  that  railroad  companies  owning  or  operating  a 
railroad  in  the  State  shall  be  responsible  in  damages  to  the 
owner  of  any  property  injured  or  destroyed  by  fire  communi- 
cated directly  or  indirectly  by  locomotive  engines  in  use  upon 
the  railroad ;  and  that  it  shall  have  an  insurable  interest  in  the 
property  upon  the  route  of  the  railroad  and  may  procure  in- 
surance thereon  in  its  own  name,  and  such  a  statute  does  not 
deprive  such  company  of  its  property  without  due  process  of 

58  Martin  v.  Pittsburg  &  Lake  Erie  Rd.  Co.,  203  U.  S.  284,  27  Sup.  Ct.  100, 
51  L.  ed.  184,  aff'g  72  Ohio  St.  659. 

59  Pennsylvania  R.  R.  Co.  v.  Hughes  (1903),  191  U.  S.  477,  24  Sup.  Ct. 
132,  48  L.  ed.  268,  aff'g  202  Pa.  222,  51  Atl.  990. 

0"  Chattanooga  Foundry  v.  Atlanta,  203  U.  S.  390,  27  Sup.  Ct.  65,  51  L. 
ed.  24L 

54 


REGULATION    AND    CONTROL,    CARRIERS  §  30 

law,  or  deny  to  it  the  equal  protection  of  the  laws,  or  impair 
the  obligation  of  the  contract  made  between  the  State  and  the 
company  by  its  incorporation  under  general  laws  imposing 
no  such  liability.®^  A  State  may  also  provide  for  the  recovery 
of  damages  for  the  killing  of  live  stock  .^^  If  a  State  statute 
provides  for  the  presentation  of  certain  claims,  the  institution 
of  certain  suits  against  railroad  companies  and  for  the  recovery 
of  a  specified  sum  for  attorney's  fees  in  addition  to  the  amount 
recovered,  it  cannot  be  sustained  where  it  operates  to  deprive 
such  companies  of  property  without  due  process  of  law,  and 
denies  to  them  the  equal  protection  of  the  law  in  that  it  singles 
them  out  of  all  citizens  and  corporations,  and  requires  them 
to  pay  in  certain  cases  attorneys'  fees  to  the  parties  success- 
fully suing  them,  while  it  gives  to  them  no  like  or  correspond- 
ing benefit. ^^    A  State  may  impose  a  penalty  on  all  common 

61  St.  Louis  &  S.  F.  Ry.  Co.  v.  Matthews,  165  U.  S.  1,  123,  41  L.  ed.  611, 
17  Sup.  Ct.  243. 

62  Minneapolis  &  St.  Louis  Rd.  Co.  v.  Beckwith,  129  U.  S.  26,  32  L.  ed. 
585,  9  Sup.  Ct.  207. 

As  to  State  statute  providing  for  measure  of  damages  on  fire  insurance 
policies,  see  Orient  Insurance  Co.  v.  Daggs,  172  U.  S.  557,  noted  under  §  16, 
herein. 

63  Gulf,  Colorado  &  Santa  Fe  Ry.  Co.  v.  Ellis,  165  U.  S.  150,  17  Sup.  Ct. 
255,  41  L.  ed.  666;  Texas  Act  of  April  5,  1889,  providing  that:  "  Any  person 
in  this  State  having  a  valid  bona  fide  claim  for  personal  services  rendered 
or  labor  done,  or  for  damages,  or  for  overcharges  on  freight,  or  claims  for 
stock  killed  or  injured  by  the  train  of  any  railway  company,  provided  such 
claims  for  stock  killed  or  injured  shall  be  presented  to  the  agent  of  the  com- 
pany nearest  to  the  point  where  such  stock  was  killed  or  injured,  against 
any  railway  corporation  operating  a  railroad  in  this  State,  and  the  amount 
of  such  claim  does  not  exceed  $50,  may  present  the  same,  verified  by  his 
affidavit,  for  payment  to  such  corporation  by  filing  it  with  any  station  agent 
of  such  corporation  in  any  county  where  suit  may  be  instituted  for  the  same, 
and  if,  at  the  expiration  of  thirty  days  after  such  presentation,  such  claim 
has  not  been  paid  or  satisfied,  he  may  immediately  institute  suit  thereon 
in  the  proper  court;  and  if  he  shall  finally  establish  his  claim,  and  obtain 
judgment  for  the  full  amount  thereof,  as  presented  for  payment  to  such 
corporation  in  such  court,  or  any  court  to  which  the  suit  may  have  been  ap- 
pealed, he  shall  be  entitled  to  recover  the  amount  of  such  claim  and  all  costs 
of  suit,  and  in  addition  thereto  all  reasonable  attorney's  fees,  provided  he 
has  an  attorney  employed  in  such  case,  not  to  exceed  $10,  to  be  assessed 
and  awarded  by  the  court  or  jury  trying  the  issue." 

When  State  statute  allowing  reasonable  attorney's  fees  in  actions  for 

55 


§  .'51       CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

carriers  for  failure  to  adjust  damage  claims  within  a  certain 
and  specified  number  of  days,  and  such  an  enactment  is  not 
as  to  intrastate  shipments  unconstitutional  as  violative  of  the 
Fourteenth  Amendment,  neither  the  classification,  the  amount 
of  the  penalty  or  the  time  of  adjustment  being  beyond  the 
power  of  the  State  to  determine;  and  this  applies  to  small 
claims,  as  small  shipments  are  the  ones  which  especially  need 
the  protection  of  penal  statutes  of  this  nature  .^^ 

§  31.  Regulation  and  Control— Telegraph  and  Telephone 
Companies — Electrical  Subways. 

A  State  may  provide  for  regulation  of  carriers  of  electricity 
and  of  electrical  conductors.^^  So  the  legislature  may  make 
lawful  the  occupation  of  streets  for  telegraph,  telephone,  street 
railway  and  other  electrical  purposes.**^  The  State  may  also, 
within  the  reservation  that  it  does  not  encroach  upon  the  free 
exercise  of  the  powers  vested  in  Congress,  make  all  necessary 
provisions  in  respect  of  the  buildings,  poles  and  wires  of  tele- 
damages  against  railroad  companies  is  constitutional,  see  Atchison,  Topeka 
&  Santa  F6  Rd.  Co.  v.  Matthews,  174  U.  S.  96,  19  Sup.  Ct.  609,  43  L.  ed.  909. 

64  Seaboard  Air  Line  Ry.  Co.  v.  Seegers,  207  U.  S.  73,  52  L.  ed.  108,  28 
Sup.  Ct.  28,  aff'g  73  S.  C.  71.  The  penalty  imposed  by  statute  in  this  case 
was  fifty  dollars,  and  the  time  limit  for  adjusting  claims  was  forty  days. 
The  court,  per  Mr.  Justice  Brewer,  says:  "The  difference  between  the  value 
of  the  goods  shipped  and  the  freight  charges  $1.75,  and  the  amount  of  the 
penalty,  $50,  naturally  excites  attention.  *  *  *  While  in  this  case  the 
penalty  may  be  large  as  compared  with  the  value  of  tlie  shipment,  yet  it 
must  be  remembered  that  small  shipments  are  the  ones  which  especially 
need  the  protection  of  penal  statutes  like  this.  If  a  large  amount  is  in  con- 
troversy, the  claimant  can  afford  to  litigate.  But  he  cannot  well  do  so  when 
there  is  but  the  trifle  of  a  dollar  or  two  in  dispute,  and  yet  justice  requires 
that  his  claim  be  adjusted  and  paid  with  reasonable  promptness.  Further, 
it  must  be  remembered  that  the  purpose  of  this  legislation  is  not  primarily 
to  enforce  the  collection  of  debts,  but  to  compel  the  performance  of  duties 
wliich  the  carrier  assumes  when  it  enters  upon  the  discharge  of  its  public 
functions.  We  know  there  are  limits  beyond  which  penalties  may  not  go — 
even  in  cases  where  classification  is  legitimate — but  we  are  not  prepared  to 
hold  that  the  amount  of  penalty  imposed  is  so  great  or  the  length  of  time 
within  which  the  adjustment  and  payment  are  to  be  made  is  so  short  that 
the  act  imposing  the  penalty  and  fixing  the  time  is  beyond  the  power  of 
the  State." 

65  New  York  v.  Squire,  145  U.  S.  175,  12  Sup.  Ct.  880,  30  L.  ed.  666. 

66  Joyce  on  Electric  Law  (2d  ed.),  §  143. 

56 


REGULATION  AND  CONTROL,  CARRIERS         §  31 

graph  conipnnios  within  its  jurisdiction  which  the  comfort  and 
convenience  of  the  community  may  require.'^^  So  property  of 
a  telephone  company,  being  property  devoted  to  a  public  use, 
is  a  legitimate  subject  of  legislative  regulation  and  control.^* 
So  the  Constitution  and  laws  of  a  State  may  authorize  a  city 
to  impose  upon  a  telegraph  company  putting  its  poles  in  the 
streets  of  such  city  a  charge  in  the  nature  of  rental  for  the 
exclusive  use  of  the  parts  so  used.^^  A  State  tax  may  also  be 
enforced  against  a  telegraph  company  organized  under  the  law 
of  another  State  and  engaged  in  interstate  commerce  in  the 
State  of  the  enactment  of  the  statute,  when  graduated  accord- 
ing to  the  amount  and  value  of  the  company's  property  meas- 
ured by  miles,  and  it  is  in  lieu  of  taxes  directly  levied  on  the 
property,  and  the  exercise  of  such  power  does  not  amount  to  a 
regulation  of  interstate  commerce,  or  put  an  unconstitutional 
restraint  thereon  7° 

Where  telegraph  companies,  engaged  in  interstate  com- 
merce, carry  on  their  business  so  as  to  justify  police  super- 
vision, the  municipality  is  not  obliged  to  furnish  such  super- 
vision for  nothing,  but  it  may,  in  addition  to  ordinary  property 
taxation,  subject  the  corporations  to  reasonable  charges,  for 
the  expense  thereof.  The  reasonableness  of  such  charges  will 
depend  upon  all  the  circumstances  involved  in  the  particular 
case;  if  in  a  case  tried  before  a  jury  the  evidence  in  regard 
thereto  is  not  such  as  to  exclude  every  conclusion  except  one, 
the  question  of  reasonableness  should  be  submitted  to  the  jury." 

67  Western  Union  Teleg.  Co.  v.  Pendleton,  122  U.  S.  347,  30  L.  ed.  1187, 
7  Sup.  Ct.  1126. 

As  to  Post  Roads  Act  and  hostile  legislation,  see  Joyce  on  Electric  Law 
(2d  ed.),  §§  65-67. 

68  Joyce  on  Electric  Law  (2d  ed.),  §  143a. 

69  St.  Loms  V.  Western  Union  Teleg.  Co.,  149  U.  S.  465,  13  Sup.  Ct.  990, 
37  L.  ed.  810.    See  Joyce  on  Electric  Law  (2d  ed.),  §§  106,  911-940b. 

70  Postal  Teleg.  Cable  Co.  v.  Adams,  155  U.  S.  688,  15  Sup.  Ct.  360,  39 
L.  ed.  311;  Miss.  Code  1880,  c.  10,  §  585,  Sess.  Laws  1888,  c.  3.  See  Joyce 
on  Electric  Law  (2d  ed.),  §§  97-113a,  911-940b. 

71  Atlantic  &  Pacific  Telegraph  Co.  v.  Philadelphia,  190  U.  S.  160,  47  L. 
ed.  995,  23  Sup.  Ct.  817,  citing  Robbins  v.  Shelby  Taxing  Dist.,  120  U.  S. 
489,  492,  30  L.  ed.  694,  7  Sup.  Ct.  592.  See  Joyce  on  Electric  Law  (2d  ed.), 
§§  99-lOlb. 

57 


§  31       CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES— 

The  transmission  and  delivery  of  telegrams  with  due  diligence 
may  also  be  required  by  the  State,  under  penalty  for  non- 
compliance, where  the  messages  are  from  some  point  without 
the  State  to  some  point  within  it7^  But  the  State  cannot  im- 
pose any  impediment  to  interstate  commerce  by  attempting 
to  regulate  the  delivery  in  other  States  of  messages  received 
within  the  State;  nor  does  the  reserved  police  power  of  the 
State  extend  to  the  regulation  of  the  delivery  at  points  without 
the  State  of  telegraph  messages  received  within  the  StateJ^ 
Again,  a  State  may  require  electrical  companies  operating  or 
intending  to  operate  within  the  State  to  file  with  the  board 
of  commissioners  of  electrical  subways,  maps  and  plans  before 
constructing  their  conduits,  and  assess  the  expenses  and 
salaries  of  such  board  upon  the  several  companies  operating 
electrical  conductors'^ 

72  Western  Union  Teleg.  Co.  v.  James,  162  U.  S.  650,  40  L.  ed.  1105,  16 
Sup.  Ct.  934.    See  Joyce  on  Electric  Law  (2d  ed.),  §§  114-128. 

73  Western  Union  Teleg.  Co.  v.  Pendleton,  122  U.  S.  347,  7  Sup.  Ct.  1126, 
30  L.  ed.  1187.    See  Joyce  on  Electric  Law  (2d  ed.),  §§  114-128. 

74  New  York  v.  Squire,  145  U.  S.  175,  38  L.  ed.  666,  12  Sup.  Ct.  880.    See 
Joyce  on  Electric  Law  (2d  ed.),  §§  420-437a. 


58 


RATE    REGULATION  §  32 


CHAPTER  IV 

CONSTITUTIONAL      BASIS      OF      ACTIONS      AND      DEFENSES — RATE 

REGULATION  ' 

§  32.  Rate    Regulation  —  Common  Franchises     an     Element — 
Carriers  —  Railroads  —  Ex-  "  Good  Will" — Gas  Rates, 
press     Companies  —  Police  §  .37.  Water  Rates — Right  to   Bar- 
Power — Interstate          Com-  gain  Away  Power  to  Regu- 
merce.  late. 

33.  Rate     Regulation  —  Constitu-  38.  Regulation  of  Gas  Companies' 

tional    Limitations — Ferries  Rates. 

— Bridges.  39.  Rate    Regulation — Exemption 

34.  Limitation  as  to  Reasonable-  and  Transfer  Thereof — Obli- 

ness  of  Rates.  gation     of     Contract — Con- 

35.  Same        Subject  —  Terminal  solidated   Companies — Com- 

Charges     by     Carrier — Pro-  binations  as  to  Rates, 

ceedings  Against  Connecting  40.  Rate    Regulation — Long    and 
Carrier  —  Discrimination  —  Short     Hauls  —  Interstate 

Joint  Through  Rate.  Commerce. 

36.  Elements    in    Fixing    Rates —  41.  Same  Subject. 

§  32.  Rate  Regulation — Common  Carriers — Railroads- 
Express  Companies — Police  Power — Interstate  Commerce. 

Rate-making  is  a  legislative  function  vv'hether  exercised  by 
the  legislature  or  by  a  subordinate  or  administrative  body  to 
which  power  has  been  delegated,  such  as  a  municipality.  The 
completed  act  derives  its  authority  from  the  legislature  and 
must  be  regarded  as  the  exercise  of  a  legislative  power.^  So 
common  carriers  cannot  unreasonably  or  unduly  discriminate, 
and  are  subject  to  reasonable  and  just  regulation  as  to  rates 
and  to  prevent  discrimination.^     It  was  early  decided  that 

1  See  §  1,  herein. 

2  Knoxville,  City  of,  v.  Knoxville  Water  Co.,  212  U.  S.  1,  29  Sup.  Ct.  148, 
53  L.  ed.  371,  citing  Honolulu  Rapid  Transit  &  Land  Co.  v.  Hawaii,  211  U.  S. 
282,  29  Sup.  Ct.  55,  53  L.  ed.  1086;  Prentis  v.  Atlantic  Coast  Line  Co.,  211 
U.  S.  210,  29  Sup.  Ct.  67,  53  L.  ed.  150. 

3  Interstate  Commerce  Commission  v.  Chicago  Great  Western  Ry.  Co., 
141  Fed.  lOO:);  Soutliern  Express  Co.  v.  R.  M.  Rose  Co.,  124  Ga.  581,  53 
S.  E.  185.    See  Penn  Refining  Co.  v.  Western  New  York  &  Penn.  Rd.  Co., 

59 


§  32      CONSTITUTIONAL   BASIS    OF    ACTIONS    AND    DEFENSES 

relief  from  onerous  and  burdensome  rates  of  transportation 
imposed  under  State  authority  must  be  sought  in  the  com- 
petition of  different  lines,  and,  perhaps,  in  the  power  of  Con- 
gress to  establish  post  roads  and  facilitate  military  and  com- 
mercial intercourse  between  the  different  parts  of  the  country.^ 
And  until  Congress  acts  it  remains  with  the  States,  through 
which  a  railroad,  incorporated  by  act  of  Congress,  passes,  to 
fix  rates  for  transportation  beginning  and  ending  within  their 
respective  limits.^  Where  a  statute  grants  to  a  railroad  com- 
pany the  right  "from  time  to  time  to  fix,  regulate  and  receive, 
the  tolls  and  charges  by  them  to  be  received  for  transporta- 
tion," it  does  not  deprive  the  State  of  its  power,  within  the 
limits  of  its  general  authority,  as  controlled  by  the  Constitution 
of  the  United  States,  to  act  upon  the  reasonableness  of  the  tolls 
and  charges  so  fixed  and  regulated.^  So  a  State  statute  pro- 
viding that  a  railroad  corporation  shall  fix  its  rates  annually 
for  the  transportation  of  passengers  and  freight,  post  the  same 
in  all  its  stations  and  depots,  and  that  a  failure  to  fulfill  the 
conditions,  or  the  charging  of  a  higher  rate,  should  subject  the 
offending  company  to  certain  penalties,  is,  in  the  case  of  rail- 
roads running  through  several  States,  including  that  where  the 
State  enactment  above  mentioned  had  been  made,  but  a  police 
law,  and  therefore  constitutional.^  But  a  statute  which  makes 
it  unlawful  for  a  railroad  company  in  the  State  to  charge  and 
collect  a  greater  sum  for  transporting  freight  than  is  specified 
in  the  bill  of  lading,  is,  when  applied  to  freight  transported 
into  the  State  from  a  place  without  it  in  conflict  with  that 
provision  of  the  Interstate  Commerce  Act  which  makes  it  un- 
lawful for  such  carrier  to  charge  and  collect  a  greater  or  less 
compensation  for  the  transportation  of  the  property  than  is 
208  U.  S.  208,  28  Sup.  Ct.  268,  52  L.  ed.  456,  aff' g  137  Fed.  343,  70  C.  C.  A. 
23;  Joyce  on  Franchises,  §§  404-416;  Joyce  on  Electric  Law  (2d  ed.),  §§  518- 
527b. 

4  Railroad  Co.  v.  Maryland,  21  Wall.  (88  U.  S.)  456,  22  L.  ed.  678. 

5  Smyth  V.  Ames,  169  U.  S.  466,  18  Sup.  Ct.  418,  42  L.  ed.  819,  30  Chicago 
Leg.  News,  243,  171  U.  S.  361,  18  Sup.  Ct.  888,  43  L.  ed.  197. 

6  Railroad  Commission  Cases  (Stone  v.  Farmers'  Loan  &  Trust  Co.),  116 
U.  S.  307,  29  L.  ed.  636,  6  Sup.  Ct.  334. 

7  Railroad  Co.  v.  Fuller,  17  Wall.  (84  U.  S.)  560,  21  L.  ed.  710. 

60 


RATE    REGULATION  §  32 

specified  in  the  published  sclicdule  of  rates  provided  for  in  the 
act,  and  in  force  at  the  time,  and  being  thus  in  conflict,  it  is 
not  applicable  to  interstate  shipments.*  The  power  of  Con- 
gress over  interstate  transportation  embraces  all  manner  of 
carriage  whether  gratuitous  or  otherwise;  and  in  the  absence 
of  express  exceptions,  the  intention  of  Congress  in  enacting  the 
Elkins  Act  was  to  prevent  any  departure  whatever  from  pub- 
lished rates.  Whether  or  not  the  issuing  of  express  franks  to 
officers  and  employes  of  express  companies  and  their  families 
is  prohibited  by  the  Interstate  Commerce  Act  ^  an  injunction 
is  authorized  by  the  Elkins  Act  ^°  wherever  a  common  carrier 
is  engaged  in  the  carriage  of  passengers  or  freight  at  less  than 
the  published  rate,  and  by  the  Hepburn  Act  ^^  express  com- 
panies are  brought  within  the  act  and  obliged  to  file  and  publish 
their  rates.  The  exceptions  contained  in  the  Hepburn  Act,^^ 
allowing  a  common  carrier  to  issue  passes  for  free  transporta- 
tion of  passengers  to  certain  classes  of  persons  cannot  be  ex- 
tended to  give  express  companies  the  right  to  issue  passes  to 
the  same  classes  of  persons  for  transportation  of  merchandise. 
The  purpose  of  the  Elkins  Act  is  to  require  publication  of  tariff 
and  to  prevent  and  prohibit  all  discrimination,  and  the  issuance 
of  express  franks  falls  within  such  prohibition.^^ 

The  right  of  a  State  to  reasonably  limit  the  amount  of 
charges  by  a  railroad  company  for  the  transportation  of  per- 
sons and  property,  within  its  jurisdiction,  cannot  be  granted 
away  by  its  legislature  unless  by  words  of  positive  grant,  or 
words  equivalent  in  law\^^ 

8  Gulf,  Colorado  &  Santa  Fe  Ry.  Co.  v.  Hefley,  158  U.  S.  98,  30  L.  ed.  910, 
15  Sup.  Ct.  802. 

9  Act  of  February  4,  1889,  c.  104,  §  2,  24  Stat.  379. 

10  Act  of  February  19,  1903,  c.  708,  §  3,  32  Stat.  846,  U.  S.  Comp.  Stat. 
Supp.  1907,  p.  880. 

11  June  29,  1906,  c.  3591,  34  Stat.  584,  U.  S.  Comp.  Stat.  Supp.  1907, 
pp.  892,  898. 

12  Act  of  June  29,  1906,  c.  3591,  §  1,  34  Stat.  584,  U.  S.  Comp.  Stat.  Supp. 
1907,  pp.  892,  898. 

13  American  Express  Co.  v.  United  States,  212  U.  S.  522,  29  Sup.  Ct.  315, 
53  L.  ed.  635. 

1*  Railroad  Commission  Cases  (Stone  v.  Farmers'  Loan  &  Trust  Co.),  116 

61 


§§  33,  34   CONSTITUTKJNAL  BASIS    OF    ACTIONS    AND  DEFENSES — 

§  33.  Rate  Regulation — Constitutional  Limitations — Fer- 
ries— Bridges. 

It  is  well  settled  that,  within  certain  limitations,  public  service 
corporations  are  subject  to  the  legislative  right  to  fix  rates;  ^^ 
and  the  limitation  by  legislative  enactment  of  the  rate  of  charge 
for  services  rendered  in  a  public  employment,  or  for  the  use  of 
property  in  which  the  public  has  an  interest,  establishes  no  new 
principle  of  law,  but  only  gives  effect  to  an  old  one.^^  The 
power,  however,  of  the  State  to  prescribe  rates  and  charges 
or  to  prevent  unjust  discrimination  and  unreasonable  rates 
and  charges  is  governed  by  the  limitation  that  it  cannot  be 
exercised  to  deprive  owners  of  their  property  without  due 
process  of  law  or  without  compensation,  nor  can  they  be 
denied  the  equal  protection  of  the  law.^' 

The  several  States  have  also  the  power  to  establish  and 
regulate  ferries  and  bridges,  and  the  rates  of  toll  thereon, 
whether  within  one  State,  or  between  two  adjoining  States, 
subject  to  the  paramount  authority  of  Congress  over  inter- 
state commerce.^* 

§  34.  Limitation  as  to  Reasonableness  of  Rates. 

Rates  when  fixed  by  legislative  authority,  for  public  service 
corporations,  should  allow  a  fair  return  upon  the  reasonable 
value  of  the  property  at  the  time  of  being  used;  they  should 
not  be  confiscatory;  and  whether  a  rate  yields  such  a  fair  re- 
turn as  not  to  be  confiscatory,  depends  upon  circumstances, 
locality  and  risk,  and  no  particular  rate  can  be  established  for, 
and  no  particular  rule  given  which  will  be  applicable  to  all 
classes.    The  rule  seems  to  be  well  settled,  however,  that  the 

U.  S.  307,  29  L.  ed.  636,  6  Sup.  Ct.  334.    See  also  Louisville  &  Nashville 
Rd.  Co.  V.  Kentucky,  183  U.  S.  503,  46  L.  ed.  298,  22  Sup.  Ct.  95. 

15  Willcox  V.  Consolidated  Gas  Co.,  212  U.  S.  19,  53  L.  ed.  382,  29  Sup. 
Ct.  392,  rev'g  157  Fed.  849.  See  Joyce  on  Franchises,  §§  298,  299,  390-416; 
Joyce  on  Electric  Law  (2d  ed.),  §§  518-527b. 

16  Munn  v.  Illinois,  94  U.  S.  113,  24  L.  ed.  77. 

17  Western  Union  Teleg.  Co.  v.  Myatt,  98  Fed.  335. 

18  Covington  &  Cincinnati  Bridge  Co.  v.  Kentucky,  154  U.  S.  204,  14  Sup. 
Ct.  1087,  36  L.  ed.  962. 

62 


RATE    KJOGULATION  §  34 

legislative  act  will  not  U;  held  invalid  unless  the  rates  are 
plainly  unreasonable  to  the  extent  that  their  enforcement 
would  be  equivalent  to  the  taking  of  property  for  public  use 
without  such  compensation  as  under  the  circumstances  is  just 
both  to  the  owner  and  the  public.^"  It  is  also  settled  that  a 
State  cannot  so  regulate  rates  for  the  transportation  of  per- 
sons and  property  as  will  not  admit  of  the  carrier  earning  such 
compensation  as  under  all  the  circumstances  is  just  to  it  and 
the  public  and  thereby  deprive  such  carrier  of  property  without 
due  process  of  law  and  deny  to  it  the  equal  protection  contrary 
to  the  Fourteenth  Amendment.^*'  It  is  also  determined  that 
the  grant  to  the  legislature  of  a  State  in  its  Constitution,  of  the 
power  to  establish  maximum  rates  for  the  transportation  of 
passengers  and  freight  on  railroads  in  such  State  will  be  held 
to  have  reference  to  reasonable  maximum  rates,  as  the  words 
strongly  imply  that  it  was  not  intended  to  give  a  power  to  fix 
maximum  rates  without  regard  to  their  reasonableness,  and 
it  cannot  be  admitted  that  the  power  granted  may  be  exerted 
in  derogation  of  rights  secured  by  the  Constitution  of  the 
United  States,  and  that  the  judiciary  may  not,  when  its  juris- 
diction is  properly  invoked,  protect  those  rights.^^  But  while 
the  enforcement  by  a  State  of  a  general  scheme  of  maximum 
rates  so  unreasonably  low  as  to  be  unjust  and  unreasonable 
may  be  confiscatory  and  amount  to  taking  property  without 
due  process  of  law,  the  State  has  power  to  compel  a  railroad 
company  to  perform  a  particular  and  specified  duty  necessary 
for  the  convenience  of  the  public  even  though  it  may  entail 

19  Willcox  V.  Consolidated  Gas  Co.,  212  U.  S.  19,  53  L.  ed.  382,  29  Sup. 
Ct.  392,  rev'g  157  Fed.  849,  citing  San  Diego  Land  &  Town  Co.  v.  Jasper, 
189  U.  S.  439,  442,  47  L.  ed.  892,  23  Sup.  Ct.  892;  San  Diego  Land  &  Town 
Co.  V.  National  City,  174  U.  S.  739,  767,  43  L.  ed.  1154,  14  Sup.  Ct.  804. 

Reasonableness  of  rates,  see  Southern  Pac.  Co.  v.  Bartine  (U.  S.  C.  C), 
170  P^ed.  725. 

20  Smyth  v.  Ames,  169  U.  S.  466,  18  Sup.  Ct.  418,  42  L.  ed.  819,  30  Chicago 
L.  News,  243,  171  U.  S.  361,  18  Sup.  Ct.  888,  43  L.  ed.  197.  See  also  Missouri, 
Kansas  &  Texas  Ry.  Co.  v.  Interstate  Commerce  Commission  (U.  S.  C.  C), 
164  Fed.  645. 

21  Smyth  V.  Ames,  169  U.  S.  466,  18  Sup.  Ct.  418,  42  L.  ed.  819,  30  Chicago 
Leg.  News,  243,  171  U.  S.  361,  18  Sup.  Ct.  888,  43  L.  ed.  197. 

63 


§  35   CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

some  pecuniary  loss,  for  a  distinction  exists  between  the  two 
cases.'^  It  is  held,  however,  as  to  wharfage  that  it  is,  in  the 
absence  of  Federal  legislation,  governed  by  local  State  laws, 
and  if  the  rates  authorized  by  them  and  by  municipal  ordi- 
nances enacted  under  their  authority  are  unreasonable,  the 
remedy  must  be  sought  by  invoking  the  laws  of  the  State/^ 

§  35.  Same  Subject — Terminal  Charges  by  Carrier — Pro- 
ceedings Against  Connecting  Carrier — Discrimination — 
Joint  Through  Rate. 

A  carrier  may  charge  and  receive  compensation  for  services 
that  it  may  render,  or  procure  to  be  rendered,  off  its  own  line, 
or  outside  the  mere  transportation  thereover.  Where  the 
terminal  charge  is  reasonable  it  cannot  be  condemned,  or  the 
carrier  charging  it  required  to  change  it  because  prior  charges 
of  connecting  carriers  make  the  total  rate  unreasonable,  and 
in  determining  whether  the  charge  of  a  terminal  company  is 
or  is  not  reasonable  the  fact  that  connecting  carriers  own  the 
stock  of  the  terminal  company  is  immaterial,  nor  does  that 
fact  make  the  lines  of  the  terminal  company  part  of  the  lines 
or  property  of  such  connecting  carriers.  Again,  the  inquiry 
authorized  under  the  Hepburn  Act^^  relates  to  all  charges 

22  Atlantic  Coast  Line  Rd.  Co.  v.  North  Carolina  Corp.  Comm.,  206  U.  S. 
1,  51  L.  ed.  933,  27  Sup.  Ct.  585,  distinguishing  Smyth  v.  Ames,  169  U.  S. 
466,  18  Sup.  Ct.  418,  42  L.  ed.  819,  30  Chicago  Leg.  News,  243,  and  citing  as 
illustrating  the  distinction,  Minneapolis  &  St.  Louis  R.  Co.  v.  Minnesota, 
186  U.  S.  257,  46  L.  ed.  1151,  22  Sup.  Ct.  900;  St.  Louis  &  San  Francisco 
Ry.  Co.  V.  Gill,  156  U.  S.  649,  15  Sup.  Ct.  484,  39  L.  ed.  567.  This  last  case 
examines  in  detail  the  following  decisions:  Reagan  v.  Farmers'  Loan  &  Trust 
Co.,  154  U.  S.  362,  38  L.  ed.  1014,  14  Sup.  Ct.  1047;  Chicago  &  Grand  Trunk 
Ry.  Co.  V.  Wellman,  143  U.  S.  339,  30  L.  ed.  176,  12  Sup.  Ct.  400;  Chicago, 
Milwaukee  &  St.  Paul  Ry.  Co.  v.  Minnesota,  134  U.  S.  418,  33  L.  ed.  970, 
10  Sup.  Ct.  462;  Dow  v.  Beidelman,  125  U.  S.  681,  31  L.  ed.  841,  8  Sup.  Ct. 
1028.  The  principal  case  (Atlantic  Coast  Line  Co.,  etc.)  is  cited  in  Willcox  v. 
Consolidated  Gas  Co.,  212  U.  S.  19,  53  L.  ed.  382,  29  Sup.  Ct.  392,  in  dis- 
cussion of  the  point  therein  decided  as  to  illegal  discrimination  in  a  gas  rate 
act  between  the  city  and  the  consumers  individually,  the  sufficiency  of  the 
return  of  profits  and  the  constitutionaHty  of  the  statute. 

23  Ouachita  Packet  Co.  v.  Aiken,  121  U.  S.  444,  30  L.  ed.  976,  7  Sup. 
Ct.  907. 

24  Hepburn  Act  of  June  29,  1906,  §  15,  c.  3591,  34  Stat.  584. 

64 


RATP:    UEeULATION  §  35 

iiiafle  by  the  carrier,  and  on  such  an  in(iuiry  the  carrier  is 
entitled  to  have  a  finding  that  a  particular  charge  is  unrea- 
sonable before  he  is  required  to  change  it.  If  the  charge  of  a 
terminal  carrier  is  itself  reasonable  the  wrong  of  a  shipper  by 
excessive  aggregate  charges  should  be  corrected  by  proceed- 
ings against  the  connecting  carrier  guilty  of  the  wrong.  But 
the  convenience  of  the  commission  or  the  court  is  not  the 
measure  of  justice  and  will  not  justify  striking  down  a  terminal 
charge  when  the  real  overcharge  is  the  fault  of  a  prior  carrier .^^ 
It  is  the  duty  of  a  connecting  carrier  on  a  joint  through  rate 
to  accept  the  cars  delivered  to  it  by  the  initial  carrier,  and  it  is 
not  thereby  rendered  liable  for  any  wrongful  discrimination 
of  the  initial  carrier  merely  because  of  the  adoption  of  a  joint 
through  rate,  which  in  itself  is  reasonable;  nor  is  such  con- 
necting carrier  rendered  liable  for  any  such  wrongful  act  of 
the  initial  carrier  by  §  8  of  the  Interstate  Commerce  Act.^^ 

25  Interstate  Commerce  Commission  v.  Stickney,  215  U.  S.  98,  30  Sup.  Ct. 
— ,  54  L.  ed.  — .  In  this  case  it  appeared  that:  On  December  10,  1907,  the 
Interstate  Commerce  Commission  entered  an  order  requiring  certain  rail- 
roads running  into  Chicago  to  cease  and  desist  from  making  a  terminal  charge 
of  two  dollars  per  car  for  the  transportation  of  live  stock  beyond  the  tracks 
of  said  railroads  in  Chicago,  and  for  delivery  thereof  at  the  Union  Stock 
Yards,  and  requiring  them  to  establish  and  put  in  force  for  said  services  a 
charge  of  one  dollar  per  car;  compliance  with  this  order  was  postponed  by 
the  Commission  until  May  15,  1908.  On  May  7,  1908,  the  appellees  filed 
this  bill  in  the  Circuit  Court  of  the  United  States  for  the  District  of  Minne- 
sota, to  restrain  the  enforcement  of  said  order,  averring  that  the  actual  cost 
to  them  for  such  terminal  services  exceeded  in  each  instance  the  sum  of  two 
dollars  per  car,  and  that  the  companies  were  making  delivery  at  a  charge 
less  than  such  actual  cost;  that,  therefore,  the  reduction  of  the  charge  by 
the  commission  to  one  dollar  per  car  was  unreasonable,  oppressive  and  un- 
lawful. A  hearing  was  had  before  three  judges  of  the  Eighth  Circuit  and  a 
restraining  order  entered  as  prayed  for  by  the  railroad  companies,  from 
which  order  an  appeal  was  taken  to  the  Supreme  Court  and  the  order  was 
affirmed.  The  controversy  as  to  this  terminal  charge  was  of  long  duration. 
A  history  of  it  antecedent  to  this  case  will  be  found  in  Interstate  Commerce 
Commission  v.  Chicago,  Burlington  &  Quincy  Rd.  Co.,  186  U.  S.  320,  46 
L.  ed.  1182,  22  Sup.  Ct.  824.  Examine  Southern  Pacific  Co.  v.  Interstate 
Commerce  Commission,  200  U.  S.  536,  50  L.  ed.  585,  26  Sup.  Ct.  330,  rev'g 
Interstate  Commerce  Commission  v.  Southern  Pac.  Ry.,  132  Fed.  829,  con- 
sidered elsewhere,  herein. 

28  Penn  Refining  Co.  v.  Western  New  York  &  Penn.  Rd.  Co.,  208  U.  S. 
208,  28  Sup.  Ct.  268,  52  L.  ed.  456,  aff'g  137  Fed.  343,  70  C.  C.  A.  23. 

5  65 


§  30     CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

§  36.  Elements  in  Fixing  Rates— Franchise  an  Element— 
"  Good  Will  "—Gas  Rates. 

As  stated  under  a  preceding  section,^^  a  fair  return  should 
be  allowed  upon  the  reasonable  value  of  the  property,  based 
upon  the  particular  circumstances  of  each  case,  the  locality 
and  risk.  The  value  of  the  property  is  an  essential  element  in 
determining  whether  or  not  a  rate  is  confiscatory  and  this  is 
largely  a  matter  of  opinion  as  to  real  estate  and  a  plant,  also 
as  to  personal  estate  when  not  based  upon  the  actual  cost  of 
material  and  construction;  and  the  same,  as  to  matter  of  opin- 
ion, is  to  some  extent  true  concerning  deterioration  of  value 
of  a  plant .2»  So  whether  a  railroad  rate  is  confiscatory  so  as 
to  deprive  the  company  of  its  property  without  due  process 
of  law  within  the  meaning  of  the  Fourteenth  Amendment 
depends  upon  the  valuation  of  the  property,  the  income  de- 
rivable from  the  rate,  and  the  proportion  between  the  two, 
which  are  matters  of  fact  which  the  company  cannot  be  pre- 
vented from  trying  before  a  competent  tribunal  of  its  own 
choosing.2^  Again,  where  a  public  service  corporation  raises 
more  money  in  a  particular  year  than  required  for  actual 
depreciation  it  cannot  carry  the  excess  to  capital  for  the  pur- 
pose of  estimating  the  amount  on  which  it  is  entitled  to  pay 
dividends  in  determining  whether  a  rate  is  unconstitutional  as 
confiscatory,  and  the  onus  of  showing  that  this  has  not  been 
done  is  on  complainant  where  the  books  show  that  such  an 
excess  has  been  collected.     While  in  some  businesses  where 

27  See  §  34,  herein. 

28  Willcox  V.  Consolidated  Gas  Co.,  212  U.  S.  19,  53  L.  ed.  382,  29  Sup. 
Ct.  392,  rev'g  157  Fed.  840.  See  Knoxville  v.  Knoxville  Water  Co.,  212 
U.  S.  1,  29  Sup.  Ct.  148,  53  L.  ed.  371;  Stanislaus  County  v.  San  Joaquin  & 
King's  River  Canal  &  Irrig.  Co.,  192  U.  S.  201,  213,  48  L.  ed.  406,  24  Sup. 
Ct.  241,  rev'g  113  Fed.  930;  Cotting  v.  Kansas  City  Stock  Yards  Co.,  183 
U.  S.  79,  22  Sup.  Ct.  30,  46  L.  ed.  92,  82  Fed.  839;  San  Diego  Land  &  Town 
Co.  V.  National  City,  174  U.  S.  739,  757,  43  L.  ed.  1154,  19  Sup.  Ct.  804; 
Smyth  V.  Ames,  169  U.  S.  466,  546,  18  Sup.  Ct.  418,  42  L.  ed.  819,  30  Chicago 
Leg.  News,  243,  171  U.  S.  361,  18  Sup.  Ct.  888,  43  L.  ed.  197;  Southern  Pac. 
Co.  V.  Bartine  (U.  S.  C.  C),  170  Fed.  725. 

29  Prentis  v.  Atlantic  Coast  Line  Co.,  211  U.  S.  210,  29  Sup.  Ct.  67,  63  L. 
ed.  150. 

66 


RATE    REGULATION  §  36 

increased  demand  docs  not  involve  a  corresponding  increase 
in  expense,  increased  profits  may  result  from  decreased  rates, 
this  rule  does  not  apply  to  a  business,  such  as  that  of  a  tele- 
l)hone  company,  where  expenses  are  proportionately  increased 
with  increased  demand  and  service.^"  Again,  to  be  just  and 
reasonable,  within  the  meaning  of  the  constitutional  guaranty, 
1  he  rates  must  be  prescribed  with  reasonable  regard  for  cost  to 
the  carrier  of  the  service  rendered  and  for  the  value  of  the 
property  employed  therein;  but  this  does  not  mean  that  regard 
is  to  be  had  only  for  the  interests  of  the  carrier,  or  that  the 
rates  must  be  necessarily  such  as  to  render  its  business  profit- 
able, for  reasonable  regard  must  also  be  had  for  the  value  of  the 
service  to  the  public.  And  where  the  cost  to  the  carrier  is  not 
kept  within  reasonable  limits,  or,  where  for  any  reason  its  busi- 
ness cannot  reasonably  be  so  conducted  as  to  render  it  profit- 
able, the  misfortune  must  fall  upon  the  carrier,  the  same  as  it 
would  be  in  any  other  line  of  business .^^  Another  important 
rule  has  been  laid  down  as  follows,  in  a  case  as  to  gas  rates :  For 
the  purpose  of  fixing  rates  the  value  of  the  property  employed 
should  be  determined  as  of  the  time  when  the  inquiry  is  made, 
and  as  a  general  rule  the  corporation  is  entitled  to  the  benefit 
of  increased  value  since  acquisition;  and  the  same  case  holds 
that  a  provision  in  a  State  statute,  requiring  a  public  service 
corporation  to  perform  its  service  in  such  a  manner  that  its 
entire  plant  would  have  to  be  rebuilt  at  a  cost  on  which  no 
return  could  be  obtained  at  the  rate  fixed,  deprives  the  com- 
pany of  its  ability  to  secure  such  return  and  is  unconstitutional 
and  void.  But  the  court  excluded  "good  will"  as  an  element 
of  value  of  the  property  employed  where  a  public  service 
corporation  has  a  monopoly,  such  as  of  supplying  gas  in  a 
large  city.  The  court  also  concurred  with  the  opinion  below 
that  under  all  the  circumstances  of  the  case,  six  per  cent  was  a 

30  Louisiana  Railroad  Commission  v.  Cumberland  Teleg.  Co.,  212  U.  S. 
414,  53  L.  ed.  577,  29  Sup.  Ct.  357,  rev'g  156  Fed.  823.  But  quaere  and  not 
decided  whether  it  would  be  entitled  to  dividends  on  the  excess  above  men- 
tioned if  invested  in  extensions  and  additions. 

31  Missouri,  Kansas  &  Texas  Ry.  Co.  v.  Interstate  Commerce  Commission 
(U.  S.  C.  C),  1G4  Fed.  645. 

67 


§  37   CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES^ 

fair  return  on  the  value  of  the  property  employed,  and  that  a  rate 
yielding  that  return  was  not  confiscatory.  It  was  further 
held  that  franchises  of  a  public  service  corporation  are  property 
which  cannot  be  taken  or  used  by  others  without  compensa- 
tion; and,  therefore,  where  a  State  has  by  legislative  enactment 
permitted  such  corporations  to  capitalize  such  franchises,  their 
value  at  the  time  of  such  capitalization  should  be  included  in 
the  value  of  the  property  as  an  element  for  fixing  rates,  but  no 
increased  value  of  such  franchises  should  be  allowed ;  also,  that 
in  estimating  the  value  of  franchises,  for  the  purpose  of  fixing 
rates,  it  is  immaterial  that  the  corporation  is  taxed  on  a  greater 
value  than  that  allowed  if  it  charges  its  taxes  as  operating 
expenses  in  determining  net  income.  The  action,  however, 
having  been  brought  before  the  rate  took  effect  and  com- 
plainant having  failed  to  sustain  the  burden  of  clearly  show- 
ing that  the  rate  act  was  confiscatory,  the  bill  for  injunction 
was  dismissed  without  prejudice  to  complainant's  right  to 
bring  another  action  when  the  rate  should  go  into  effect  if  it 
then  proved  to  be  confiscatory.^^ 

§  37.  Water  Rates — Right  to  Bargain  Away  Power  to 
Regulate. 

Water  rates  may  be  regulated  .^^  And  the  power  to  regulate 
water  rates  is  a  governmental  power  continuing  in  its  nature 
which,  if  it  can  be  bargained  away  at  all,  can  only  be  by  words 
of  positive  grant,  and  if  any  reasonable  doubt  exists  in  regard 

32  Willcox  V.  Consolidated  Gas  Co.,  212  U.  S.  19,  53  L.  ed.  382,  29  Sup. 
Ct.  392,  rev'g  157  Fed.  849,  citing  upon  the  point  that  franchises  are  prop- 
erty, etc.,  Monongahela  Nav.  Co.  v.  United  States,  148  U.  S.  312,  37  L.  ed. 
4G.3,  13  Sup.  Ct.  622;  People  v.  O'Brien,  111  N.  Y.  1,  19  N.  Y.  St.  Rep.  173, 
18  N.  E.  692.  Six  per  cent  was  also  fixed  as  a  fair  return  in  Stanislaus 
County  V.  San  Joaquin  &  King's  River  Canal  &  Irrig.  Co.,  192  U.  S.  201, 
48  L.  ed.  406,  24  Sup.  Ct.  241,  rev'g  113  Fed.  930. 

33  Tampa  Water  Works  Co.  v.  Tampa,  199  U.  S.  241,  50  L.  ed.  178,  26 
Sup.  Ct.  55;  Stanislaus  Co.  v.  San  Joaquin  &  King's  River  Canal  &  Irriga- 
tion Co.,  192  U.  S.  201,  48  L.  ed.  406,  24  Sup.  Ct.  241;  Owensboro  v.  Owens- 
boro  Water  Works  Co.,  191  U.  S.  358,  48  L.  ed.  217,  24  Sup.  Ct.  82;  San 
Diego  Land  &  Town  Co.  v.  National  City,  174  U.  S.  739,  43  L.  ed.  1154,  19 
Sup.  Ct.  804.  See  Knoxville  v.  Knoxviile  Water  Co.,  212  U.  S.  1,  29  Sup. 
Ct.  148,  53  L.  ed.  371. 

68 


RATE    REGULATION  §  38 

thereto  it  must  be  resolved  in  favor  of  the  existence  of  the 
power.  Thus,  to  illustrate,  an  ordinance  of  a  city  of  Kentucky 
before  it  became  a  city  of  the  third  class,  giving  a  water  com- 
pany a  right  to  make  and  enforce,  as  part  of  the  conditions 
upon  which  it  would  supply  consumers,  all  needful  rules  and 
regulations  not  inconsistent  with  the  law  must  be  construed 
as  to  the  law,  as  it  might  be  altered,  and  when  the  city  became 
a  city  of  the  third  class  and  thus  had  power  under  the  general 
law  to  provide  the  city  with  water  by  contract  or  by  works  of 
its  own  and  to  make  regulations  for  the  management  thereof 
and  to  fix  prices  to  consumers,  an  ordinance  subsequently 
enacted  during  the  life  of  the  franchise,  fixing  the  price  of 
water,  is  not  void  as  against  the  water  company  under  the 
impairment  of  contract  clause  of  the  Federal  Constitution,  and 
in  the  absence  of  other  grounds  the  Circuit  Court  of  the  United 
States  has  no  jurisdiction  of  a  suit  in  equity  to  restrain  the 
enforcement  of  such  enacted  ordinance,  no  question  of  un- 
reasonableness of  rates  being  involved.^'*  But,  on  the  other 
hand,  although  a  city  may  have  power  to  regulate  water  rates, 
yet  the  power  to  reduce  them  may  be  so  affected  by  contract 
with  a  corporation  as  to  preclude  additional  burdens  being 
subsequently  imposed  as  a  condition  to  the  exercise  of  a 
corporate  franchise  to  supply  water.^^ 

§  38,  Regulation  of  Gas  Companies'  Rates. 

Gas  companies  are  also  subject  to  the  legislative  power  to 
fix  rates.^^  In  a  comparatively  recent  Federal  case  a  peculiar 
question  arose  as  follows: 

A  gas  company  brought  an  action  against  a  city  in  Illinois 
to  restrain  the  enforcement  of  an  ordinance  fixing  the  price 
of  gas,  on  the  ground  that  the  low  price  practically  amounted 
to  taking  property  without  compensation  and  that  the  ordi- 

3*  Owensboro  v.  Owensboro  Water  Works  Co.,  191  U.  S.  358,  48  L.  ed. 
217,  24  Sup.  Ct.  82. 

35  Los  Angeles  v.  Los  Angeles  City  Water  Co.,  177  U.  S.  558,  20  Sup.  Ct. 
736,  44  L.  ed.  886. 

38  Willcox  V.  Consolidated  Gas  Co.,  212  U.  S.  19,  53  L.  ed.  382,  29  Sup. 
Ct.  392,  rev'g  157  Fed.  849. 

69 


§  39   CONSTITUTIONAL   BASIS    OF   ACTIONS   AND    DEFENSES — 

nance  impaired  contract  rights.  The  case  was  tried  on  these 
questions,  but  they  were  ignored  by  the  court  which  decided 
adversely  to  the  company,  although  the  master  had  reported 
that  the  rates  were  confiscatory,  on  the  single  ground  that  the 
company  had  for  a  period  violated  the  anti-trust  law  of  Illinois 
and  thereby  was  not  entitled  to  relief.  It  was  held  that  al- 
though parties  making  an  agreement  by  the  anti-trust  act  of 
Illinois  might  while  the  agreement  was  in  force  be  subject  to 
its  penalties  and  whenever  they  ceased  to  act  under  the  agree- 
ment the  penalties  also  ceased.  As  the  case  had  been  tried  on 
one  theory  and  decided  on  another  and  injustice  had  probably 
resulted  the  judgment  was  reversed  and  the  case  sent  back  so 
that  the  terms  and  duration  of  the  illegal  agreement  might  be 
ascertained  and  taken  into  consideration  in  determining  the 
case.^' 

§  39.  Rate  Regulation — Exemption  and  Transfer  Thereof 
— Obligation  of  Contract — Consolidated  Companies — Com- 
binations as  to  Rates. 

Where  a  contract  claimed  to  have  been  impaired  was  made 
with  one  of  several  corporations  merged  into  the  complainant, 
and  concededly  affected  only  the  property  and  franchises 
originally  belonging  to  such  constituent  company,  it  was 
determined  that  divisional  relief  could  not  be  granted  affecting 
only  such  property,  when  the  bill  was  not  framed  in  that  aspect 
but  prayed  for  a  suspension  of  the  impairing  ordinance  as  to 
all  of  complainant's  property.  It  was  also  held  that  the  rule 
that  a  special  statutory  exemption  does  not  pass  to  a  new 
corporation  succeeding  others  by  consolidation  or  purchase  in 
the  absence  of  express  direction  to  that  effect  in  the  statute, 
was  applicable  where  the  constituent  companies  are  held  and 
operated  by  one  of  them,  under  authority  of  the  legislature. 
It  was  further  decided  that  even  if  an  asserted  exemption  from 
change  of  rates  existed  and  had  not  been  lost  by  consolidation, 
the  bill  could  not  be  sustained  where  no  such  contract  rights 

37  Peoria  Gas  &  Electric  Co.  v.  Peoria,  200  U.  S.  48,  50  L.  ed.  365,  26  Sup. 
Ct.  214. 

70 


RATE    REGULATION  §  40 

as  alleged  had  been  impaired  or  destroyed  by  the  ordinance.^* 
Again,  a  State  statute  prohibiting  combinations  of  insurance 
companies  as  to  rates,  commissions,  and  manner  of  transacting 
business  is  not  unconstitutional  as  depriving  the  companies  of 
their  property  or  of  their  liberty  of  contract  within  the  meaning 
of  the  Fourteenth  Amendment,  and  the  auditor  of  the  State 
will  not  be  enjoined  from  enforcing  the  provisions  of  the 
statute.  A  company  lawfully  doing  business  in  the  State  is  no 
more  bound  by  a  general  unconstitutional  enactment  than  a 
citizen  of  that  State .^'^ 

§  40.  Rate  Regulation— Long  and  Short  Hauls— Inter- 
state Commerce. 

A  State  statute  which  enacts  that  if  any  railroad  company 
shall,  within  the  State,  charge  or  receive  for  transporting 
passengers  or  freight  of  the  same  class,  the  same  or  a  greater 
sum  for  any  distance  than  it  does  for  a  longer  distance,  it  shall 
be  liable  to  a  penalty  for  unjust  discrimination,  includes,  by 
construction,  a  transportation  of  goods  under  one  contract  and 
by  one  voyage  from  the  interior  of  the  State  to  another  State 
and  is  therefore  commerce  among  the  States  even  as  to  such 
part  of  the  voyage  as  lies  within  the  State  although  there 
might  be  a  transportation  of  goods  which  is  begun  and  ended 
within  the  State  limits,  and  disconnected  with  any  carriage 
outside  the  State  and  so  not  constitute  commerce  among  the 
States;  this  latter  would  be  subject  to  State  regulation  and  the 
statute  valid,  but  the  former  is  National  in  its  character  and 
within  the  exclusive  power  of  Congress  to  regulate.^" 

38  People's  Gas  Light  &  Coke  Co.  v.  Chicago,  194  U.  S.  1,  48  L.  ed.  851, 
24  Sup.  Ct.  520.  See  St.  Louis  &  San  Francisco  Ry.  Co.  v.  Gill,  156  U.  S. 
G49,  15  Sup.  Ct.  484,  39  L.  ed.  567. 

3a  Carroll  v.  Greenwich  Ins.  Co.,  199  U.  S.  401,  26  Sup.  Ct.  66,  50  L.  ed. 
246,  Iowa  Code  of  1897,  §  1754. 

«  Wabash,  St.  Louis  &  Pac.  Ry.  Co.  v.  Illinois,  118  U.  S.  557,  30  L.  ed. 
244,  7  Sup.  Ct.  4.  The  statute  was  held  void  as  to  the  transportation  in 
question.  The  court  examined,  and  held  that  they  do  not  establish  a  con- 
trary doctrine,  the  following  cases:  Munn  v.  Illinois,  94  U.  S.  113,  24  L.  ed. 
77;  Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  Iowa,  94  U.  S.  155,  24  L.  ed. 
94;  Peik  v.  Chicago  &  Northwestern  Ry.,  94  U.  S.  164,  24  L.  ed.  97. 

That  a  State  Constitution  may  prohibit  discrimination  as  to  rates,  charges 

71 


§40    CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES 

When  competition  which  controls  rates  prevails  at  a  given 
point  a  dissimilarity  of  circumstances  and  conditions  is  created 
justifying  a  carrier  in  charging  a  lesser  rate  to  such  point  it 
being  the  longer  distance,  than  it  exacts  to  a  shorter  distance, 
and  noncompetitive  point  on  the  same  line.  A  nearer  and 
noncompetitive  point  on  the  same  line  is  not  entitled  to  lower 
rates  prevailing  at  a  longer  distance  and  competitive  place  on 
the  theory  that  it  could  also  be  made  a  competitive  point  if 
designated  lines  of  railway  carriers  by  combinations  between 
themselves  agreed  to  that  end.  The  competition  necessary  to 
produce  a  dissimilarity  of  conditions  must  be  real  and  con- 
trolling and  not  merely  conjectural  or  possible.  Where  a 
charge  of  a  higher  rate  for  a  longer  than  a  shorter  haul  over 
the  same  line  is  lawful  because  of  the  existence  of  controlling 
competition  at  the  longer  distance  place,  the  mere  fact  that  the 
less  charge  is  made  for  the  longer  distance  does  not  alone 
suffice  to  cause  the  lesser  rate  for  the  longer  distance  to  be 
unduly  discriminatory.  And  where  the  commission  had  found 
a  rate  to  be  unreasonable  solely  because  it  was  violative  of  the 
act  which  forbids  a  greater  charge  for  a  lesser  than  for  a  longer 
distance  under  stated  conditions  and  which  prohibits  undue 
discrimination,  it  was  held  that  as  the  grounds  upon  which  such 
holding  was  based  resulted  from  an  error  of  law  it  was  proper 
not  to  conclude  the  question  of  the  inherent  unreasonableness 
of  the  rates,  but  to  leave  it  open  for  the  further  action  by  the 
commission  to  be  considered  free  from  the  errors  of  law  which 
had  previously  influenced  the  commission.  A  carrier,  in  order 
to  give  particular  places  the  benefit  of  their  proximity  to  a 
competitive  point  and  thereby  afford  them  a  lower  rate  than 
they  would  otherwise  enjoy,  may  take  into  consideration  the 
rate  to  the  point  of  competition  and  make  it  the  basis  of  rates 
to  the  points  in  question.  To  give  a  lower  rate  as  the  result  oi 
competition  does  not  violate  the  i)rovisions  of  the  act  to  regu- 
late commerce.    It  was  also  held,  that  where  a  rate  was  based 

and  facilities,  and  as  to  the  effect  upon  connecting  roads  and  through  rates, 
see  Atchison,  Topeka  &  Santa  Fe  Rd.  Co.  v.  Denver  &  New  Orleans  Rd. 
Co.,  110  U.  S.  6G7,  2S  L.  ed.  291,  4  Sup.  Ct.  185,  rev'g  15  Fed.  650. 

72 


RATE    REGULATION  §  41 

on  an  error  of  fact,  which  was  not  c()ini)lained  of  before,  or 
acted  on  by  the  commission,  and  had  been  corrected  by  the 
carriers  long  before  the  decision  below,  and  the  corrected  rate 
had  been  in  force  for  a  long  period,  it  was  not  necessary  to 
revise  the  decnje  of  the  court  below,  which  was  in  all  other 
respects  correct,  so  as  to  secure  a  continuance  of  the  corrected 
rate.^i 

§  41.  Same  Subject. 

In  a  case  decided  in  the  Federal  Supreme  Court,  in  1900, 
it  was  held  that  although  the  Interstate  Commerce  Commission 
found  in  that  case  as  a  fact  that  the  competition  at  Nashville, 
which  formed  the  basis  of  contention  therein,  was  of  such  a 
preponderating  nature  that  the  carriers  must  either  continue 
to  charge  a  lesser  rate  for  a  longer  haul  to  Nashville  than  was 
asked  for  the  shorter  haul  to  Chattanooga,  or  to  abandon  all 
Nashville  traffic,  nevertheless  they  were  forbidden  by  the  act 
of  1887  "^^  to  make  the  lesser  charge  for  the  longer  haul ;  but 
since  that  ruling  of  the  commission  was  made  it  has  been 
settled  ^^  that  competition  which  is  controlling  on  traffic  and 
rates  produces  in  and  of  itself  the  dissimilarity  of  circumstance 
and  condition  described  in  the  statute,  and  that  where  this 
condition  exists  a  carrier  has  a  right  of  his  own  motion  to  take 
it  into  view  in  fixing  rates  to  the  competitive  point;  and  it 
follows  that  the  construction  affixed  by  the  commission  to  the 
statute  upon  which  its  entire  action  in  this  case  was  predicated 
was  wrong.  It  was  also  decided  that  the  only  principle  by 
which  it  was  possible  to  enforce  the  whole  statute  was  the  con- 
struction adopted  in  previous  opinions  of  the  Federal  Supreme 
Court ;  that  is,  that  a  competition  which  is  real  and  substantial, 
and  exercises  a  potential  influence  on  rates  to  a  particular 
point,  brings  into  play  the  dissimilarity  of  circumstance  and 
condition   provided   by  the  statute,   and  justifies  the   lesser 

« Interstate  Commerce  Commission  v.  Clyde  Steamship  Co.,  181  U.  S. 
29,  47  L.  ed.  1047,  23  Sup.  Ct.  687. 

<2  Act  of  February  4,  1887,  c.  104,  24  Stat,  379. 

«  Louisville  &  Nashville  Rd.  Co.  v.  Behlmer,  175  U.  S.  648,  44  L.  ed.  309, 
20  Sup.  Ct.  209,  and  other  cases  cited. 

73 


§  41       CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

charge  to  the  more  distant  and  competitive  point  than  to  the 
nearer  and  noncompetitive  place,  and  that  this  right  is  not 
destroyed  by  the  mere  fact  that,  incidentally,  the  lesser  charge 
to  the  competitive  point  may  seemingly  give  a  preference  to 
that  point,  and  the  greater  rate  to  the  noncompetitive  point 
may  apparently  engender  a  discrimination  against  it.^  A 
State  railroad  corporation  voluntarily  formed  cannot  exempt 
itself  from  the  control  reserved  to  the  State  by  its  Constitu- 
tion, and,  if  not  protected  by  a  valid  contract,  cannot  success- 
fully invoke  the  interposition  of  Federal  courts,  in  respect  to 
long  and  short  haul  clauses  in  a  State  Constitution  simply  on 
the  ground  that  the  railroad  is  property.'*^ 

44  East  Tennessee,  etc.,  Ry.  Co.  v.  Interstate  Commerce  Commission,  181 
U.  S.  1,  45  L.  ed.  719,  21  Sup.  Ct.  516.  Examine  Louisville  &  Nashville  Rd. 
Co.  V.  Eubank,  184  U.  S.  27,  22  Sup.  Ct.  277,  46  L.  ed.  416. 

45  Louisville  &  Nashville  Rd.  Co.  v.  Kentucky,  183  U.  S.  503,  46  L.  ed. 
298,  22  Sup.  Ct.  95. 


74 


INTERSTATE    COMMERCE 


§42 


CHAPTER  V 


CONSTITUTIONAL  BASIS  OF  ACTIONS  AND  DEFENSES — INTERSTATE 

COMMERCE  ^ 


46. 


47. 


42.  Interstate    Commerce — Power 

to  Regulate. 

43.  Same  Subject. 

44.  Same  Subject. 

45.  Regulation  of  Commerce — Dis- 

trict of  Columbia — Terri- 
tories. 

Regulation  of  commerce  — 
Business  Within  the  State — 
Combinations  —  Telegraph 
Companies — Common  Law. 

Interstate  Commerce — Regu- 
lation and  Control — Rail- 
roads. 

48.  Interstate  Commerce — Regula- 

tion and  Control- — Railroads 
Continued — Express  Com- 
panies. 

49.  Interstate  Commerce — Consti- 

tutionality and  Construction 
of  Commodities  Clause  of 
Hepburn  Act — Railroads — 
Carriers  as  Stockholders — 
Injunction  —  Mandamus  — 
Penalty. 

50.  State    Requirement   That   In- 

terstate and  Other  Trains 
Stop  at  Specified  Stations. 

Interstate  Commerce  —  Police 
Power  —  Intoxicating  Liq- 
uors— Carriers. 

Same  Subject — Delivery — Wil- 
son Act — Penalty. 

Interstate  Commerce — Intoxi- 


51. 


52. 


57 


58 


eating  Liquors  Continued — 
"  Arrival "- — Original  Pack- 
age— Wilson  Act. 

Same  Subject. 

Regulation  of  Conunerce — In- 
surance. 

Interstate  Commerce — Bridges 
— Navigable  Waters — Pow- 
ers of  Congress  and  of  the 
State. 

Interstate  Commerce — Police 
Power — Regulation  of  Grain 
Warehouses,  Elevators, 
Warehousemen,  etc. 

Interstate  Commerce — Police 
Power- — Quarantine  and  In- 
spection Regulations. 

59.  Same  Subject. 

60.  Interstate     Commerce — Taxa- 

tion Generally. 

61.  Interstate     Commerce — Taxa- 

tion —  Carriers  —  Express 
Companies  —  Vessels — Rail- 
roads— Telegraph  Compan- 
ies. 

62.  Interstate     Commerce — Taxa- 

tion— Railroads  Continued 
— Other  Property. 

Same  Subject — Property  Left 
Temporarily  in  State. 

Interstate  Commerce — Taxa- 
tion of  Bridges  and  Bridge 
Companies. 


63 


64 


53. 


§  42.  Interstate  Commerce— Power  to  Regulate. 

The  power  to  regulate  interstate  commerce  is  the  power  to 

1  See  §  1,  herein. 

As  will  appear  from  the  index  to  this  treatise  other  rules  and  decisions  as 

'75 


§  43    CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

prescribe  rules  by  which  such  commerce  must  be  governed 
but  the  rules  prescribed  must  have  a  real  and  substantial  rela- 
tion to,  or  connection  with,  the  commerce  regulated;  and  while 
this  power  to  regulate  is  great  and  paramount  it  cannot  be 
exerted  in  violation  of  any  fundamental  right  secured  by  other 
provisions  of  the  National  Constitution.^  Franchises  of  a 
corporation  chartered  by  the  State  are,  however,  so  far  as  they 
involve  questions  of  interstate  commerce,  exercised  in  sub- 
ordination to  the  power  of  Congress  to  regulate  such  com- 
merce; and  while  Congress  may  not  have  general  visitatorial 
power  over  State  corporations  its  powers  in  vindication  of  its 
own  laws  are  the  same  as  if  the  corporation  had  been  created 
by  an  act  of  Congress.^  But  one  engaging  in  interstate  com- 
merce does  not  thereby  submit  all  his  business  to  the  regulating 
power  of  Congress."*  And  any  exercise  of  State  authority,  in 
whatever  form  manifested,  which  directly  regulates  interstate 
commerce  is  repugnant  to  the  commerce  clause  of  the  Constitu- 
tion, This  is  positively  asserted.^  But  while  the  State  may 
not  legislate  for  the  direct  control  of  interstate  commerce,  a 
proper  police  regulation  which  does  not  conflict  with  con- 
gressional legislation  on  the  subject  involved  is  not  necessarily 
unconstitutional  because  it  may  have  an  indirect  effect  upon 
interstate  commerce.^ 

§  43.  Same  Subject. 

A  State  or  Territory  has  the  right  to  legislate  for  the  safety 

to  interstate  commerce  and  its  effect  upon  corporate  actions  and  defenses 
are  considered  elsewhere  herein  under  other  appropriate  headings. 

2  Adair  v.  United  States,  208  U.  S.  161,  28  Sup.  Ct.  277,  52  L.  ed.  43G. 
This  case  involved  the  constitutionaHty  of  provisions  of  the  Act  of  Congress 
of  June  1,  1898,  30  Stat.  424,  c.  370,  U.  S.  Comp.  Stat.  1901,  p.  3205,  concern- 
ing carriers  engaged  in  interstate  commerce  and  their  employes. 

3  Hale  v.  Henkel,  201  U.  S.  43,  50  L.  ed.  652,  26  Sup.  Ct.  370. 

4  Employers'  Liabihty  Cases,  207  U.  S.  463,  28  Sup.  Ct.  141,  52  L.  ed.  297. 
See  United  States  v.  Erie  R.  Co.  (U.  S.  D.  C),  166  Fed.  352,  355. 

5  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  223,  29  Sup.  Ct.  633, 
634;  Atlantic  Coast  Line  Rd.  Co.  v.  Wharton,  207  U.  S.  328,  334,  52  L.  ed. 
230,  234,  28  Sup.  Ct.  121,  123. 

6  Asbell  v.  Kansas,  209  U.  S.  251,  28  Sup.  Ct.  485,  52  L.  ed.  778. 

76 


INTERSTATE   COMMERCE  §  43 

and  welfare  of  its  people,  which  is  not  taken  from  it  because 
of  the  exclusive  right  of  Congress  to  regulate  interstate  com- 
merce; and  an  insp(>ction  law  affecting  interstate  commerce 
is  not  for  that  reason  invalid  unless  it  is  in  conflict  with  an  act 
of  Congress  or  an  attempt  to  regulate  interstate  commerced 
Again,  the  power  of  the  Federal  Government  to  regulate  com- 
merce is  not  in  conflict  with  the  reserved  rights  of  the  several 
States  under  the  Constitution,  nor  does  it  deprive  them  of  the 
I)ower  to  pass  laws  in  the  nature  of  police  regulations  under 
what  is  known  as  the  police  power,  but  on  all  matters  that  are 
the  subjects  of  commerce  within  the  meaning  of  the  Federal 
Constitution,  such  regulations  must  be  limited  to  subjects  of 
police  control  and  must  not  in  themselves  be  regulations  of 
commerce.*  And  the  rule  is  fully  recognized  that,  ''The  effect 
of  a  State  constitutional  provision  or  of  any  State  legislation 
upon  interstate  commerce  must  l)e  direct  and  not  merely 
incidental  and  unimportant ;  but  it  seems  that  where  the  neces- 
sary result  of  enforcing  the  provision  may  be  to  limit  or  pro- 
hibit the  transportation  of  articles  from  without  the  State  to  a 
point  within  it,  or  from  a  point  within  to  a  point  without  the 
State,  interstate  commerce  is  thereby  affected,  and  may  be 
thereby  to  a  certain  extent  directly  regulated,  and  in  that 
event  the  effect  of  the  provision  is  direct  and  important  and 
not  a  mere  incident."  "     Legislation,  therefore,  which  is  an 

^  McLean  v.  Denver  &  Rio  Grande  Rd.  Co.,  203  U.  S.  38,  27  Sup.  Ct.  1, 
51  L.  ed.  78. 

8  Gibbons  v.  Ogden,  9  Wheat.  (22  U.  S.)  1,  6  L.  ed.  23.    See  §§  7-9,  herein. 

9  Louisville  &  Nashville  Rd.  Co.  v.  Eubank,  184  U.  S.  27,  38,  22  Sup.  Ct. 
277,  46  L.  ed.  416  (a  case  of  carriers;  regulation  of  rates;  long  and  short 
hauls;  Kentucky  Constitution;  held  invalid  so  far  as  made  applicable  to  or 
affecting  interstate  commerce),  per  Mr.  Justice  Peckham,  citing  and  con- 
sidering Wabash,  St.  Louis  &  Pacific  Ry.  Co.  v.  Illinois,  118  U.  S.  557,  3U 
L.  ed.  244,  7  Sup.  Ct.  4  (a  case  as  to  constitutional  law;  railroads;  transpor- 
tation charge;  discrimination  in;  invalidity  of  Illinois  statute;  interstate 
commerce;  what  constitutes;  interference  with;  power  of  Congress;  and  reg- 
ulation of  State  statutes.  Distinguishing  Munn  v.  Illinois,  94  U.  S.  113,  24 
L.  ed.  77;  Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  Iowa,  94  U.  S.  155,  24 
L.  ed.  94;  Peik  v.  Chicago  &  Northwestern  Ry.,  94  U.  S.  164,  24  L.  ed.  97); 
Hall  V.  De  Cuir,  95  U.  S.  485,  24  L.  ed.  547  (a  case  of  constitutional  law; 
commerce  regulation;  transportation  of  passengers;  and  Louisiana  statute; 

77 


§  44      COxNSTlTUTlOXAL   BASIS    OF    ACTIONS    AND    DEFENSES — 

attempt,  in  virtue  of  the  police  power  of  the  State,  to  regulate 
interstate  commerce  must  yield,  so  far  as  there  is  a  conflict,  to 
the  powers  which  belong  exclusively  to  Congress.^''  So  a  State 
may  not  under  pretense  of  protecting  the  public  health  exclude 
the  products  of  merchandise  of  other  States,  and  the  court  will 
determine  for  itself  whether  it  is  a  genuine  exercise  of  the  police 
power  or  really  and  substantially  a  regulation  of  interstate 
commerce  .^^ 

§  44.  Same  Subject. 

A  State  may,  however,  in  the  absence  of  express  action  by 
Congress  or  by  the  Interstate  Commerce  Commission,  regulate 
for  the  benefit  of  its  citizens  local  matters  affecting  interstate 
commerce  .^^  The  following  general  rules  have  also  been  as- 
serted: (a)  The  power  to  regulate  commerce,  interstate  and 
foreign,  vested  in  Congress,  is  the  power  to  prescribe  the  rules 
by  which  it  shall  be  governed,  that  is,  the  conditions  upon 
which  it  shall  be  conducted;  to  determine  when  it  shall  be  free 
and  when  subject  to  duties  or  other  exactions,  (b)  Such  com- 
merce is  a  subject  of  national  character  and  requires  uniformity 
of  regulation,  (c)  Interstate  commerce  by  corporations  is  en- 
titled to  the  same  protection  against  State  exactions  which  is 
given   in   such   commerce   when   carried   on   by   individuals. 

(d)  As  to  those  subjects  of  commerce  which  are  local  or  limited 
in  their  nature  or  sphere  of  operation,  the  State  may  prescribe 
regulations   until   Congress   assumes   control   of  them.     And 

(e)  as  to  such  as  are  national  in  their  character,  and  require 
uniformity  of  regulation,  the  power  of  Congress  is  exclusive;  and 
until  Congress  acts,  such  commerce  is  entitled  to  be  free  from 
State  exaction  and  burdens. ^^     The  regulation  of  commerce 

held  unconstitutional  and  void  to  the  extent  that  it  was  a  regulation  of 
interstate  commerce). 

Principal  case  is  cited  in  State,  ex  rel.  Railroad  Commission,  v.  Adams 
Express  Co.  (Ind.,  1908),  85  N.  E.  966,  967. 

10  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  222,  29  Sup.  Ct.  633,634. 

11  Asbell  V.  Kansas,  209  U.  S.  251,  52  L.  ed.  778,  28  Sup.  Ct.  485. 

12  Missouri  Pacific  Ry.  Co.  v.  Larabee  Flour  Mills  Co.,  211  U.  S.  612,  29 
Sup.  Ct.  214. 

13  Gloucester  Ferry  Co.  v.  Pennsylvania,  114  U.  S.  196,  29  L.  ed.  158,  5 

78 


INTEK.STATE    COMMERCE  §  44 

between  the  States  is  of  such  comprehensive  reach  as  to  affect 
all  the  citizens  of  all  the  States  of  the  Union,  and  it  is  unneces- 
sary that  Congress  should  first  exercise  its  authority  to  regulate 
before  the  States  would  be  restricted  in  their  legislative  power. 
The  Federal  Constitution  is  itself  restrictive  of  such  local  au- 
thority, and  the  power  of  Congress  is  accordingly  exclusive.^'' 
It  is  held,  however,  that  the  question  whether,  when  Congress 

Sup.  Ct.  826.  See  Butterfield  v.  Stranahan,  192  U.  S.  470,  24  Sup.  Ct.  349, 
48  L.  ed.  252;  Bowman  v.  Chicago  &  N.  W.  Ry.  Co.,  125  U.  S.  465,  31  L.  ed. 
700,  S  Sup.  Ct.  689,  1062;  Cooper  Mfg.  Co.  v.  Ferguson,  113  U.  S.  727,  28 
L.  ed.  1137,  5  Sup.  Ct.  739;  Railroad  Co.  (Hannibal  &  St.  Joseph  Rd.  Co.)  v. 
Husen,  95  U.  S.  465,  24  L.  ed.  527  (now  can  such  power  be  exercised  over 
the  interstate  transportation  of  subjects  of  commerce). 

i*  La  Moine  Lumber  &  Trading  Co.  v.  Kesterson  (U.  S.  C.  C),  171  Fed. 
980,  983,  per  Wolverton,  Dist.  J.     Compare  next  following  section,  herein. 

Commerce  regulation — as  to  exclusive  or  concurrent  powers  of  Congress 
and  the  States,  see  the  following  cases:  Adams  Express  Co.  v.  Kentucky, 
214  U.  S.  218,  29  Sup.  Ct.  633,  53  L.  ed.  972;  Missouri  Pacific  Ry.  Co.  v. 
Larabee  Flour  Mills  Co.,  211  U.  S.  612,  620,  622,  29  Sup.  Ct.  214,  53  L.  ed. 
352;  Asbell  v.  Kansas,  209  U.  S.  251,  28  Sup.  Ct.  485,  52  L.  ed.  778;  McLean 
v.  Denver  &  Rio  Grande  Ry.  Co.,  203  U.  S.  38,  51  L.  ed.  78,  27  Sup.  Ct.  1; 
New  York,  New  Haven  &  Hartford  Rd.  Co.  v.  Interstate  Commerce  Com- 
mission, 200  U.  S.  361,  26  Sup.  Ct.  272,  50  L.  ed.  596;  Northern  Securities 
Co.  V.  United  States,  193  U.  S.  197,  48  L.  ed.  679,  24  Sup.  Ct.  436;  Coving- 
ton &  Cincinnati  Bridge  Co.  v.  Kentucky,  154  U.  S.  204,  14  Sup.  Ct.  1087, 
38  L.  ed.  962;  Manchester  v.  Massachusetts,  139  U.  S.  240,  35  L.  ed.  159, 
11  Sup.  Ct.  559;  Philadelphia  &  Southern  Steamship  Co.  v.  Pennsylvania, 
122  U.  S.  32(3,  7  Sup.  Ct.  1118,  30  L.  ed.  1200;  Robbins  v.  Shelby  Co.  Tax 
Dist.,  120  U.  S.  489,  7  Sup.  Ct.  592,  30  L.  ed.  694;  Vv^abash,  St.  Louis  &  P. 
Ry.  Co.  V.  Illinois,  118  U.  S.  557,  30  L.  ed.  244,  7  Sup.  Ct.  4;  Morgan's  Steam- 
ship Co.  V.  Louisiana  Board  of  Health,  118  U.  S.  455,  30  L.  ed.  237,  6  Sup. 
Ct.  1114;  Pickard  v.  Pullman  Southern  Car  Co.,  117  U.  S.  34,  6  Sup.  Ct. 
635,  29  L.  ed.  785;  Brown  v.  Houston,  114  U.  S.  622,  29  L.  ed.  257,  5  Sup. 
Ct.  1091;  Gloucester  Ferry  Co.  v.  Pennsylvania,  114  U.  S.  196,  29  L.  ed. 
158,  5  Sup.  Ct.  826;  Head  Money  Cases,  112  U.  S.  580,  28  L.  ed.  798,  5  Sup. 
Ct.  247;  Mobile,  County  of,  v.  Kimball,  102  U.  S.  091,  26  L.  ed.  238;  Sherlock 
v.  Ailing,  93  U.  S.  99,  23  L.  ed.  819;  Henderson  v.  New  York,  92  U.  S.  259, 
23  L.  ed.  543;  Lottawanna,  The,  21  Wall.  (88  U.  S.)  558,  22  L.  ed.  654; 
State  Freight  Tax  Case,  15  Wall.  (82  U.  S.)  232,  21  L.  ed.  146;  Crandall  v. 
Nevada,  6  Wall.  (73  U.  S.)  35,  18  L.  ed.  745;  License  Tax  Cases,  5  Wall.  (72 
U.  S.)  462,  18  L.  ed.  497;  Gilman  v.  Philadelphia,  3  Wall.  (70  U.  S.)  713, 
18  L.  ed.  96;  Pennsylvania  v.  Wheeling  &  Belmont  Bridge  Co.,  18  How. 
(59  U.  S.)  421,  15  L.  ed.  435;  Passenger  Cases,  7  How.  (48  U.  S.)  283,  12 
L.  ed.  702;  License  Cases,  5  How.  (46  U.  S.)  504,  573,  12  L.  ed.  256;  Gib- 
bons v.  Ogden,  9  Wheat.  (22  U.  S.)  1,6  L.  ed.  23. 

79 


§  45      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES 

fails  to  provide  a  regulation  by  laws  as  to  any  particular  sub- 
ject of  commerce  among  the  States,  it  is  conclusive  of  its  in- 
tention that  that  sul:)jcct  shall  be  free  from  positive  regula- 
tion, or  that,  until  Congress  intervenes,  it  shall  be  left  to  be 
dealt  with  by  the  States,  is  one  to  be  determined  by  the  cir- 
cumstances of  each  case  as  it  arises.^^  The  Interstate  Com- 
merce Act  embraces  the  whole  field  of  interstate  conmierce;  it 
does  not  exempt  such  foreign  commerce  as  is  carried  on  a 
through  bill  of  lading,  but  in  terms  applies  to  the  transporta- 
tion of  property  shipped  from  any  place  in  the  United  States 
to  a  foreign  country  and  carried  from  such  place  to  a  port  of 
transhipment.^^ 

§  45.  Regulation  of  Commerce — District  of  Columbia — 
Territories. 

The  power  of  Congress  to  regulate  commerce  in  the  District 
of  Columbia  and  Territories  is  plenary  and  does  not  depend 
upon  the  commerce  clause,  and  a  statute  regulating  such  com- 
merce necessarily  supersedes  a  territorial  statute  on  the  same 
subject.  So  an  act  of  Congress  may  be  unconstitutional  as 
measured  by  the  commerce  clause,  and  constitutional  as 
measured  by  the  power  to  govern  the  District  of  Columbia  and 
the  Territories,  and  the  test  of  separability  is  whether  Con- 
gress would  have  enacted  the  legislation  exclusively  for  the 
District  and  the  Territories.^^ 

15  Bowman  v.  Cliicago  &  Northwestern  Ry.  Co.,  125  U.  S.  465,  8  Sup.  Ct. 
689,  31  L.  ed.  700. 

Commerce  regulation — effect  of  nonexercise  of  power  of  Congress,  see 
Union  Bridge  Co.  v.  United  States,  204  U.  S.  364,  27  Sup.  Ct.  367,  51  L.  ed. 
523;  Walling  v.  Michigan,  116  U.  S.  446,  29  L.  ed.  091,  6  Sup.  Ct.  454;  Brown 
V.  Houston,  114  U.  S.  622,  5  Sup.  Ct.  1091,  29  L.  ed.  257;  Escanaba  Co.  v. 
Chicago,  107  U.  S.  678,  2  Sup.  Ct.  185,  27  L.  ed.  442;  Welton  v.  Missouri,  91 
U.  S.  275,  23  L.  ed.  347;  Crandall  v.  Nevada,  6  Wall.  (73  U.  S.)  35,  18  L. 
od.  745. 

18  Armour  Packing  Co.  v.  United  States,  209  U.  S.  56,  28  Sup.  Ct.  428, 
52L.  ed.  681. 

17  El  Paso  &  Northeastern  Ry.  Co.  v.  Gutierrez,  215  U.  S.  87,  54  L.  ed.  — , 
30  Sup.  Ct.  — ,  aff'g  117  S.  W.  420,  and  approving  Hyde  v.  Southern  Ry. 
Co.,  31  App.  D.  C.  — . 

As  to  power  of  Congress  to  enact  discriminatory  legislation  under  the 

80 


INTERSTATE    COMMERCE  §  46 

§46.  Regulation  of  Commerce — Business  Within  the 
State  —  Combinations  —  Telegraph  Companies  —  Common 
Law. 

The  fact  that  a  corporation  is  engaged  in  interstate  com- 
merce does  not  deprive  the  State  of  power  to  exercise  reason- 
able control  over  its  business  done  wholly  within  the  State.^* 
So,  although  the  jurisdiction  of  Congress  over  commerce 
among  the  States  is  full  and  complete,  it  is  not  questioned  that 
it  has  none  over  that  which  is  wholly  within  a  State,  and 
therefore  none  over  combinations  or  agreements  so  far  as  they 
relate  to  a  restraint  of  such  trade  or  commerce;  nor  does  it 
acquire  any  jurisdiction  over  that  part  of  a  combination  or 
agreement  which  relates  to  commerce  wholly  within  a  State, 
by  reason  of  the  fact  that  the  combination  also  covers  and 
regulates  connnerce  which  is  interstate.^^  Again,  a  statute  of 
a  State,  intended  to  regulate  or  to  tax  or  to  impose  any  other 
restriction  upon  the  transmission  of  persons  or  property  or 
telegraj^hic  messages  from  one  State  to  another,  is  not  within 
that  class  of  legislation  which  the  States  may  enact  in  the 
absence  of  legislation  by  Congress;  and  such  statutes  are  void 

commerce  clause  of  the  Constitution,  see  United  States  v.  Delaware  &  Hud- 
son Co.,  213  U.  S.  366,  53  L.  ed.  836,  29  Sup.  Ct.  527,  noted  in  District  of 
Columbia  v.  Brooke,  214  U.  S.  138,  149,  53  L.  ed.  941,  29  Sup.  Ct.  560,  as 
holding,  "  that  Congress  may  in  the  exercise  of  the  powers  to  regulate  com- 
merce among  the  States,  discriminate  between  commodities  and  between 
carriers  engaged  in  such  commerce,  and  it  was  said  that  the  assertion  that 
'injustice  and  favoritism'  might  'be  operated  thereby,'  could  'have  no 
weight  in  passing  upon  the  question  of  power.'  "  In  the  citing  case  (214 
U.  S.  138,  149)  it  was  held  that  if  the  power  of  Congress  to  enact  discrimi- 
natory legislation  as  to  the  District  of  Columbia  is  limited  either  expressly 
or  by  implication,  the  prohibition  cannot  be  stricter  or  more  extensive  than 
the  due  process  and  equal  protection  clauses  of  the  Fourteenth  Amendment 
upon  the  States.  But,  qiuere,  and  not  decided  whether  there  is  any  pro- 
hibition on  Congress  from  enacting  discriminatory  legislation,  and  whether, 
in  the  absence  of  any  express  proliibition  to  that  effect,  any  prohibition  can 
be  implied,  especially  in  regard  to  the  exercise  of  poUce  power  in  the  District 
of  Columbia. 

18  McGuire  v.  Chicago,  Burlington  &  Quincy  Rd.  Co.,  131  Iowa,  340,  108 
N.  W.  902. 

19  Addyston  Pipe  &  Steel  Co.  v.  United  States,  175  U.  S.  211,  44  L.  ed. 
136,  20  Sup.  Ct.  96. 

6  81 


§  40      CUNSTITtmONAL    BASIS    UF    ACTIONS    AiND    DEFENSES — 

even  as  to  that  part  of  such  transmission  which  may  he  within 
the  State.20 

The  giving  telegraph  companies  the  right  to  construct  antl 
operate  their  lines  through,  along  and  over  the  public  domain, 
military  or  post  roads  and  navigable  waters  of  the  United 
States,  was  a  legitimate  regulation  of  commercial  intercourse 
by  telegraph  among  the  States  and  appropriate  legislation  to 
carry  into  execution  the  power  of  Congress  over  the  postal 
service;  it  was  merely  an  exercise  of  national  power  to  with- 
draw such  intercourse  from  State  control  and  interference.^^ 
Again,  the  powers  conferred  upon  Congress  to  regulate  com- 
merce with  foreign  nations  and  among  the  several  States,  and 
to  establish  post  offices  and  post  roads,  are  not  confined  to  the 
instrumentalities  of  conmierce,  or  of  the  postal  service  known 
or  in  use  when  the  Constitution  was  adopted,  but  keep  pace 
with  the  progress  of  the  country,  and  adapt  themselves  to  the 
new  developments  of  time  and  circumstances.  They  were 
intended  for  the  government  of  the  business  to  which  they 
relate,  at  all  times  and  under  all  circumstances;  and  it  is  not 
only  the  right  but  the  duty  of  Congress  to  take  care  that 
intercourse  among  the  States  and  the  transmission  of  intelli- 
gence are  not  obstructed  or  unnecessarily  incumbered  by  State 
legislation.^^ 

There  is  no  body  of  Federal  common  law,  separate  and  dis- 
tinct from  the  common  law  existing  in  the  several  States,  in 
the  sense  that  there  is  a  body  of  statute  law  enacted  by  Con- 
gress separate  and  distinct  from  the  body  of  statutes  enacted 

20  Wabash,  St.  Louis  &  Pac.  Ry.  Co.  v.  Illinois,  118  U.  S.  557,  30  L.  ed. 
244,  7  Sup.  Ct.  4.  Examine  Lake  Shore  &  Michigan  Southern  Ry.  Co.  v. 
Ohio,  173  U.  S.  285,  298,  43  L.  ed.  702,  19  Sup.  Ct.  451,  per  Mr.  Justice  Har- 
lan. Compare  Bowman  v.  Chicago  &  N.  W.  Ry.  Co.,  125  U.  S.  465,  31  L. 
ed.  700,  8  Sup.  Ct.  689,  1062;  McGuire  v.  Chicago,  Burlington  &  Quincy  Rd. 
Co.,  131  Iowa,  .340,  369,  108  N.  W.  902. 

21  Western  Union  Telegraph  Co.  v.  Pennsylvania  Rd.  Co.,  105  U.  S.  540, 
49  L.  ed.  412,  25  Sup.  Ct.  1.33;  Act  of  Congress,  July  24,  1866,  14  Stat.  221, 
Rev.  Stat.,  §§  5263  et  seq.  See  Joyce  on  Electric  Law  (2d  ed.),  §§  38-67. 
See  also  Id.,  §§  30-37c,  68-83,  1.30-140a. 

22  Pensacola  Telegraph  Co.  v.  Western  Union  Teleg.  Co.,  96  U.  S.  1,  24 
L.  ed.  708. 

82 


INTERSTATE   COMMERCE  §  47 

by  the  several  States.  The  principles  of  the  common  law  are 
operative  upon  all  interstate  commercial  transactions,  except 
so  far  as  they  are  modified  by  congressional  enactment.^^ 

§  47.  Interstate  Commerce — Regulation  and  Control— 
Railroads. 

Congress  has  undoubted  power  to  subject  to  regulations 
adopted  by  it  every  carrier  engaged  in  interstate  commerce.^^ 
But  so  far  as  the  will  of  Congress  respecting  commerce  among 
the  States  by  means  of  railroads  can  be  determined  from  the 
enactment  of  the  provisions  of  the  law  to  be  found  in  the 
Revised  Statutes,'^  they  are  indications  of  an  intention  that 
such  transportation  of  commodities  between  the  States  shall  be 
free  except  when  restricted  by  Congress,  or  by  a  State  with  the 
express  permission  of  Congress.'^  And  Congress  has  authorized 
every  railroad  company  in  the  United  States  to  carry  all 
passengers  and  freight  over  its  road  from  one  State  to  another 
State  and  receive  compensation  therefor  ;2^  and  any  exercise 
of  State  authority  directly  regulating  interstate  commerce  is 
repugnant  to  the  commerce  clause  of  the  Constitution.^^ 

23  Western  Union  Telegraph  Co.  v.  Call  Pub.  Co.,  181  U.  S.  92,  45  L.  ed. 
765,  21  Sup.  Ct.  561. 

As  to  abrogation  by  Interstate  Commerce  Act  of  common-law  remedy  for 
recovery  of  unreasonable  charges,  see  Texas  &  Pacific  Ry.  Co.  v.  Cisco  Oil 
Mill  Co.,  204  U.  S.  449,  51  L.  ed.  562,  27  Sup.  Ct.  358. 

24  New  York,  New  Haven  &  Hartford  Rd.  Co.  v.  Interstate  Commerce 
Commission,  200  U.  S.  361,  26  Sup.  Ct.  272,  50  L.  ed.  596. 

25  Rev.  Stat.  U.  S.,  §§  4252-4289;  Id.,  chap.  6,  title  48,  §  5258. 

26  Bowman  v.  Chicago  &  Northwestern  Ry.  Co.,  125  U.  S.  465,  8  Sup.  Ct. 
689,  31  L.  ed.  700. 

27  "Section  5258  of  the  Revised  Statutes  of  the  United  States  (U.  S. 
Comp.  Stat.,  1901,  p.  3564)  provides,  'Every  railroad  company  in  the 
United  States  *  *  *  is  hereby  authorized  to  carry  upon  and  over  its 
road  *  *  *  all  passengers  *  *  *  freight,  and  property  on  their 
way  from  any  State  to  another  State,  and  to  receive  compensation  there- 
for.' New  Orleans  Gas  Light  Co.  v.  Louisiana  Light  &  H.  P.  &  Mfg.  Co., 
115  U.  S.  650,  29  L.  ed.  516,  6  Sup.  Ct.  252;  Wabash,  St.  Louis  &  Pac.  R. 
Co.  V.  Illinois,  118  U.  S.  557,  30  L.  ed.  244,  1  Inters.  Comm.  Rep.  31,  7  Sup. 
Ct.  4. "  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  223,  29  Sup.  Ct. 
633,  53  L.  ed.  972. 

28  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  29  Sup.  Ct.  633;  At- 

83 


§  47      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

While  railways  are  bound  to  provide  primarily  and  ade- 
quately for  the  accommodation  of  those  to  whom  they  are 
directly  tributary,  they  have  the  legal  right,  after  all  these 
local  conditions  have  been  met,  to  adopt  special  provisions 
for  through  traffic,  and  legislative  interference  therewith  is  an 
infringement  upon  the  clause  of  the  Constitution  which  re- 
quires that  commerce  between  the  States  shall  be  free  and 
unobstructed  .2^    So  the  interstate  transportation  of  cars  from 
another  State  which  have  not  been  delivered  to  the  consignee, 
but  remained  on  the  track  of  the  railroad  company  in  the  con- 
dition in  which  they  were  originally  brought  into  the  State  is 
not  completed  and  they  are  still  within  the  protection  of  the 
commerce  clause  of  the  Constitution.''^     Again,  an  absolute 
requirement  that  a  railroad  engaged  in  interstate  commerce 
shall  furnish  a  certain  numbers  of  cars  on  a  specified  day,  to 
transport  merchandise  to  another  State,  regardless  of  every 
other  consideration  except  strikes  and  other  public  calamities, 
transcends  the  police  power  of  the  States  and  amounts  to  a 
burden  upon  interstate  commerce;  and  articles  of  a  State 
statute  which  constitute  such  a  requirement,  are,  when  applied 
to  interstate  commerce  shipments,  void  as  a  violation  of  the 
commerce  clause  of  the  Federal  Constitution.    Such  a  regula- 
tion cannot  be  sustained  as  to  interstate  commerce  shipments 
as  an  exercise  of  the  police  power  of  the  State .^^    But  a  statute 
of  a  State,  providing  that  no  contract  shall  exempt  any  railroad 
corporation  from  the  liability  of  a  common  carrier,  or  carrier 
of  passengers,  which  would  have  existed  if  no  contract  had 
been  made,  does  not,  as  applied  to  a  claim  for  an  injury  hap- 
pening within  the  State  under  a  contract  for  interstate  trans- 

lantic  Coast  Line  v.  Wharton,  207  U.  S.  328,  52  L.  ed.  230,  28  Sup.  Ct.  121. 
See  Bowman  v.  Chicago  &  Northwestern  Ry.  Co.,  125  U.  S.  465,  8  Sup.  Ct. 
689,  31  L.  ed.  700. 

29  Cleveland,  C.  C.  &  St.  L.  Ry.  Co.  v.  lUinois,  177  U.  S.  514,  20  Sup.  Ct. 
722,  44  L.  ed.  868. 

30  McNeill  V.  Southern  Railway  Co.,  202  U.  S.  543,  50  L.  ed.   1143,  26 
Sup.  Ct.  722. 

31  Houston  &  Texas  Central  R.  Co.  v.  Mayes,  201  U.  S.  321,  50  L.  ed.  772, 
26  Sup.  Ct.  491;  Rev.  Stat.  Tex.,  Articles  4997-5000. 

84 


INTERSTATE    COMMERCE  §  48 

portation,  contravene  the  provision  of  the  Constitution  of  the 
United  Stat(>s  enipowerin<^  Con<j;r(>ss  to  regulate  interstate 
commerce.^^  So  the  statutes  of  New  York  regulating  the 
heating  of  steam  passenger  ears,  and  directing  guards  and 
guard  posts  to  be  placed  on  railroad  bridges  and  trestles  and 
the  approaches  thereto,  were  passed  in  the  exercise  of  powers 
resting  in  the  State  in  the  absence  of  action  by  Congress,  and, 
when  applied  to  interstate  commerce,  do  not  violate^  the  Con- 
stitution of  the  United  States.^^  Again,  a  cab  service  main- 
tained by  the  Pennsylvania  Railroad  Company  to  take  passen- 
gers to  and  from  its  terminus  in  the  city  of  New  York,  for  which 
the  charges  are  separate  from  those  of  other  transportation 
and  wholly  for  service  within  the  State  of  New  York,  is  not 
interstate  commerce,  although  all  p(>rsons  using  the  cabs 
within  the  company's  regulations  are  either  going  to  or  coming 
from  the  State  of  New  Jersey  by  the  company's  ferry;  such  cab 
service  is  subject  to  the  control  of  the  State  of  New  York  and 
the  railroad  company  is  not  exempt,  on  account  of  being 
engaged  in  interstate  commerce,  from  the  State  privilege  tax 
of  carrying  on  the  business  of  running  cabs  for  hire  between 
points  wholly  within  the  State.^"* 

§  48.  Interstate  Commerce — Regulation  and  Control— 
Railroads  Continued — Express  Companies. 

Although  a  railroad  corporation  may  be  largely  engaged  in 
interstate  commerce  it  is  amenable  to  State  regulation  and 
taxation  as  to  any  of  its  service  which  is  wholly  performed 
within  the  State  and  not  as  a  part  of  interstate  commerce.^^ 
Where  a  State  statute  applies  to  both  intrastate  and  interstate 

32  Chicago,  M.  &  St.  P.  Ry.  Co.  v.  Solan,  169  U.  S.  133,  18  Sup.  Ct.  289, 
42  L.  ed.  688. 

33  New  York,  New  Haven  &  Hartford  Rd.  Co.  v.  New  York,  165  U.  S. 
628,  41  L.  ed.  853,  17  Sup.  Ct.  418;  Laws  of  1887,  c.  616;  Laws  of  1888, 
c.  189. 

34  Pennsylvania  Rd.  Co.  v.  Knight,  192  U.  S.  21,  48  L.  ed.  325,  24  Sup. 
Ct.  202,  aff'g  171  N.  Y.  354. 

35  Pennsylvania  Rd.  Co.  v.  Knight,  192  U.  S.  21,  48  L.  ed.  325,  24  Sup. 
Ct.  202,  aff'g  171  N.  Y.  354. 

85 


§  48      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

shipments,  but  the  shipment  involved  is  wholly  intrastate  thj 
court  will  not  consider  the  validity  of  the  statute  when  applied 
to  interstate  shipments.^^  A  State  may  also,  in  the  exercise  of 
its  police  power,  by  a  regulation  designed  to  secure  the  well- 
being  and  to  promote  the  general  welfare  of  the  people  within 
the  State,  prohibit  the  running  of  freight  trains  within  it;; 
limits  on  Sunday;  and  even  though  such  legislation  may  affec. 
interstate  commerce  in  a  limited  degree  it  is  not  for  that  reason 
a  regulation  of  that  commerce  or  a  needless  intrusion  upon  the 
domain  of  Federal  jurisdiction,  especially  where  there  is  noth- 
ing in  the  legislation  that  suggests  an  intent  to  regulate  in- 
terstate commerce  or  that  the  enactment  was  for  any  other 
purpose  than  to  prescribe  a  rule  of  civil  duty  for  all  who,  on 
Sunday,  are  within  the  territorial  jurisdiction  of  the  State;  and 
such  regulation  will  be  held  in  force  until  superseded  and  dis- 
placed by  some  act  of  Congress,  passed  in  the  execution  of  the 
power  granted  to  it  by  the  Constitution.^^  Although  carriers 
by  express  have  the  common-law  right  to  reasonably  fix  their 
tolls  with  reference  to  the  extent  of  the  service  rendered  and 
may  establish  reasonable  delivery  limits  within  a  city  or  town, 
still,  in  Indiana  the  legislature  may  require,  under  penalty, 
express  companies  to  deliver  to  the  consignee  express  matter 
received  by  them  free  of  any  delivery  charge  in  cities  having  a 
population  of  more  than  a  certain  number  specified  in  the 
statute,  and  may,  on  refusal  of  the  company  to  comply  with 
the  statute,  enforce  the  penalty  in  the  absence  of  any  Federal 
statute  governing  the  interstate  shipment  of  goods  by  ex- 
press. If,  however,  such  an  act  should  be  so  construed,  as  to 
apply  to  interstate  shipments,  it  could  not  be  said  that  it  is  not 
a  regulation  of  commerce,  much  less  that  it  could  not  come  in 
conflict  with  the  power  of  regulation  imposed  in  the  interstate 
commerce  commission.  It  might  be,  however,  that  if  it  were 
found  that  the  companies  were  casting  upon  their  other  traffic 
the  expense  of  long  and  burdensome  free  deliveries  an  order 

36  Seaboard  Air  Line  Ry.  v.  Seegers,  207  U.  S.  73,  52  L.  ed.  108,  28  Sup. 
Ct.  28,  aff'g73S.  C.  71. 

:<7  Hennington  v.  Georgia,  163  U.  S.  299,  41  L.  ed.  166,  16  Sup.  Ct.  1086. 

86 


INTERSTATE   COMMERCE  §  49 

would  be  made  forbidding  the  same  and  substituting  a  reason- 
able n^gulation  or  practice  designed  to  give  greater  equality. 
Such  a  consideration  would  operate  to  suspend  the  State 
statute  as  to  interstate  shipments  by  express;  and  besides,  any 
State  enactment  which  imposes  a  local  burden  of  transporta- 
tion which  in  its  operation  would  require  the  carrier  to  adjust 
his  interstate  rate  with  reference  thereto,  amounts  to  an 
attempted  regulation  of  interstate  commerce  and  is,  therefore, 
void  as  to  such  transactions.  The  Interstate  Commerce  Act, 
however,  as  amended  by  the  Railroad  Act  of  1906,  supersedes 
a  State  statute  legislating  as  to  the  same  subject-matter.^* 

§  49.  Interstate  Commerce— Constitutionality  and  Con- 
struction of  Commodities  Clause  of  Hepburn  Act  —Railroads 
—  Carriers  as  Stockholders  —  Injunction  —  Mandamus — 
Penalty. 

In  an  important  case  recently  decided  in  the  Federal  Supreme 
Court  it  appeared  that:  after  the  first  day  of  May,  1908,  the 
Government  of  the  United  States  commenced  proceedings  by 
bill  in  equity  against  each  of  certain  corporations,  to  enjoin 
each  from  carrying  in  interstate  commerce  any  coal  produced 
under  the  circumstances  hereinafter  stated.  At  the  same  time 
a  petition  in  mandamus  was  filed  against  each  corporation, 
seeking  to  accomplish  the  same  result.  Both  the  equity  cases 
and  the  mandamus  proceedings  were  based  upon  the  assump- 
tion that  the  first  section  of  the  act  to  regulate  commerce,  as 
amended  and  re-enacted  by  the  law  usually  referred  to  as  the 
Hepburn  Act,^^  contained  a  provision,  generally  known  as  the 
commodities  clause,  which  caused  it  to  be  illegal  for  the  cor- 
porations after  May  1,  1908,  to  transport  in  interstate  com- 
merce coal  with  which  the  railroad  companies  were  or  had  been 
connected  or  associated  in  any  of  the  modes  below  stated. 

38  state  V.  Adams  Express  Co.  (Ind.,  1908),  85  N.  E.  966,  83  N.  E.  337; 
Ind.  Acts  of  1901,  p.  97,  c.  62;  Burns'  Ann.  Stat.,  1901,  §  3312a;  Act  of  Con- 
gress of  Feb.  4,  1887,  c.  104,  §  0,  24  Stat.  380  (U.  S.  Comp.  Stat.,  1901, 
p.  3156)  as  am'd  by  Rd.  Act  of  June  29,  1906,  c.  3591,  §  3,  34  Stat.  589 
(U.  S.  Comp.  Stat.,  1907,  pp.  899  et  seq.). 

39  Approved  June  29,  1906,  c.  3591,  34  Stat.  584. 

87 


§  49      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

Except  in  the  particular  that  one  of.  the  corporations  claimed 
that  it  was  not  a  railroad  company  within  the  meaning  of  the 
commodities  clause,  they  all  defended  substantially  upon  the 
ground  that  when  correctly  interpreted  the  commodities  clause 
did  not  forbid  the  interstate  commerce  traffic  in  coal  by  them 
carried  on.     If  it  did,  the  clause  was  assailed  as  inherently 
repugnant  to  the  Constitution  because  the  right  to  enact  it  was 
not  embraced  within  the  authority  conferred  upon  Congress 
to  regulate  commerce.    In  addition  it  was  contended  that  even 
if,  abstractly  considered,  the  grant  might  be  embraced  within 
the  grant  of  power  to  regulate  commerce,  nevertheless  its  pro- 
visions were  in  conflict  with  the  due  process  clause  of  the  Fifth 
Amendment  to  the  Constitution,  because  of  the  destructive 
effect  which  the  enforcement  of  its  provisions  would  produce 
on  the  rights  of  property  which  the  corporations  possessed 
and  had  long  enjoyed  under  the  sanction  of  valid  State  laws. 
It  was  besides  insisted  that  in  any  eveiit  the  clause  was  repug- 
nant to  the  Constitution,  because  of  the  discrimination  caused 
by  the  exception  as  to  timber  and  the  manufactured  products 
thereof.     Aside  from  the  contention  of  one  of  the  corporations, 
above  noted,  that  it  was  not  a  railroad  company  within  the 
meaning  of  that  term  as  used  in  the  statute,  because  it  was 
merely  a  coal  company  whose  transporting  operations  were 
but   incidental   to   its    mining    operations,    the    corporations, 
parties  to  the  record,  by  means  of  railroads  owned  and  operated 
by  them,  were  engaged  in  transporting  coal  from  the  anthracite 
coal  fields  in  Pennsylvania  to  points  of  market  for  ultimate 
delivery  in  other  States.    With  much  of  the  coal  so  transported 
the  corporations  had  been  or  were  connected  by  some  relation 
distinct  from  the  association  which  was  necessarily  engendered 
by  the  transportation  of  the  commodity  by  the  corporations 
as  common  carriers  in  interstate  commerce.     While  the  busi- 
ness of  the  corporations,  generally  speaking,  had  these  char- 
acteristics, there  were  differences  between  them.    Some  of  the 
corporations  owned  and  worked  mines  and  transported  over 
their  own  rails  in  interstate  commerce  the  coal  so  mined,  either 
for  their  own  account  or  for  the  account  of  those  who  had 
88 


INTERSTATE   COMMEHCE  §  49 

acciuircd  title  to  the  coal  piior  to  the  beginning  of  the  trans- 
portation. Others,  while  opei-ating  railroads  not  only  owned 
but  also  leased  and  operated  coal  mines,  and  carried  the  coal 
j)roduced  from  such  mines  in  the  same  way.  Again,  others 
of  the  railroad  companies,  although  not  operating  mines,  were 
the  owners  of  stock  in  corporations  engaged  in  mining  coal, 
the  coal  so  produced  by  such  corporations  being  carri(>d  in 
interstate  commerce  by  the  railroad  companies  holding  the 
stock  in  the  producing  coal  companies,  either  for  account  of 
the  producing  corporations  or  for  persons  to  whom  the  coal 
had  been  sold  at  the  point  of  production  prior  to  the  beginning 
of  interstate  commerce.  This,  moreover,  was,  additionally, 
the  ca^e  as  to  some  of  the  railroad  companies  who,  as  above 
stated,  were  engaged  both  in  the  production  of  coal  from  mines 
owned  by  them  and  in  interstate  transportation  of  such 
product.  All  the  attributes  thus  enjoyed  by  the  corporations 
had  been  possessed  by  them  for  a  long  time  and  were  expressly 
conferred  by  the  laws  of  Pennsylvania,  and,  in  some  instances, 
also  by  the  laws  of  other  States,  in  which  the  companies  like- 
wise, in  part,  carried  on  their  business.  The  cases  were  sub- 
mitted on  the  pleadings,  and  were  heard  and  decided  at  one 
and  the  same  time.  Treating  the  clause  of  the  above  statute 
as  having  the  meaning  which  the  Government  contended  for, 
the  court  came  to  consider  the  alleged  repugnancy  of  the 
enactment  to  the  Constitution.  In  the  principal  opinion  the 
subject  was  at  least  formally  approached,  not  for  the  purpose 
of  determining  whether  inherently  the  commodities  clause  was 
within  the  competency  of  Congress  to  enact  as  a  regulation  of 
commerce,  but  w^hether  the  provisions  of  that  clause  were 
repugnant  to  the  Constitution  because  of  the  destructive  effect 
of  its  prohibitions  upon  the  vast  sum  of  property  rights  which 
the  corporations  were  found  to  enjoy  as  a  result  of  valid  State 
laws.  It  was  decided  below  that,  as  applied  to  the  defendants, 
the  commodities  clause  was  not  within  the  power  of  Congress 
to  enact  as  a  regulation  of  commerce ;  a  member  of  the  court 
dissented  in  a  written  opinion.  Judgments  and  decrees  were 
entered  denying  the  application  for  mandamus  and  dismissing 

89 


§  49      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

the  bills  of  complaint.    The  Federal  Supreme  Court,  in  revers- 
ing and  remanding  with  directions  for  such  further  proceedings 
as  might  be  necessary  to  apply  and  enforce  the  statute  as 
interpreted  by  it,  held  that:  (1)  Although  a  limitation  to  its 
operation  might  be  reasonable  and  thus  assuage  the  radical 
results  of  a  prohibitory  statute,  if  it  is  not  expressed  in  the 
statute,  to  engraft  such  a  limitation  would  be  pure  judicial 
legislation.      In    construing   the    commodities    clause    of   the 
Hepburn  Act  the  suggestion  of  the  Government  to  limit  its 
application  to  commodities  while  in  the  hands  of  a  carrier  or  its 
first  vendee,  and,  as  thus  construed,  extend  the  indirect  interest 
prohibition  to  commodities  belonging  to  corporations  the  stock 
whereof  is  owned  in  whole  or  in  part  by  the  carrier,  or  those 
which  had  been  mined,  manufactured  or  produced  by  the  carrier 
prior  to  the  transportation,  cannot  be  accepted.    (2)  The  duty  of 
the  Federal  Supreme  Court  in  construing  a  statute  which  is 
reasonably  susceptible  of  two  constructions,  one  of  which  would 
render  it  unconstitutional  and  the  other  valid,  to  adopt  that 
construction  which  saves  its  constitutionality^''  includes  the 
duty  of  avoiding  a  construction  which  raises  grave  and  doubtful 
constitutional  questions  if  the  statute  can  be  reasonably  con- 
strued so  as  to  avoid  such  questions."^!     (3)  This  rule  applied  to 
the  commodities  clause  of  the  Hepburn  Act  so  as  to  avoid  decid- 
ing the  constitutional  questions  which  would  arise  if  the  clause 
were  construed  so  as  to  prohibit  the  carrying  of  commodities 
owned  by  corporations  of  which  the  carrier  is  a  shareholder, 
or  which  it  had  mined,  manufactured  or  produced  at  some 
time  prior  to  the  transportation.     (4)  Where  ambiguity  exists 
it  is  the  duty  of  a  court  construing  a  statute  to  restrain  the 
wider  and  doubtful  provisions  so  as  to  make  them  accord  with 
the  narrow  and  more  reasonable  provisions  and  thus  harmonize 
the  statute.     (5)  A  prohibition  in  an  act  of  Congress  will  not 
be  extended  to  include  a  subject  where  the  extension  raises 

40  Citing  Knights  Templar  Indemnity  Co.  v.  Jarman,  187  U.  S.  197,  47 
L.  ed.  139,  23  Sup.  Ct.  108. 

41  Citing  Harriman  v.  Interstate  Com.  Comm.,  211  U.  S.  407,  53  L.  ed. 
253,  29  Sup.  Ct.  115. 

90 


INTERSTATE    COMMERCE  §49 

grave  constitutional  questions  as  to  the  power  of  Congress, 
where  one  branch  of  that  body  rejected  an  amendment  specifi- 
cally including  such  subject  within  the  prohibition.  (6)  In  the 
construction  of  a  statute  the  power  of  the  lawmaking  body  to 
enact  it,  and  not  the  consequences  resulting  from  the  enact- 
ment, is  the  criterion  of  constitutionality.  (7)  The  provision 
contained  in  the  Hepburn  Act^^  commonly  called  the  com- 
modities clause,  does  not  prohibit  a  railway  company  from 
moving  commodities  in  interstate  commerce  because  the  com- 
pany has  manufactured,  mined  or  produced  them,  or  owned 
them  in  whole  or  in  part,  or  has  had  an  interest,  direct  or  in- 
direct, in  them,  wholly  irrespective  of  the  relation  or  connection 
of  the  carrier  with  the  commodities  at  the  time  of  transporta- 
tion. (8)  The  provision  of  the  commodities  clause  relating  to 
interest,  direct  or  indirect,  does  not  embrace  an  interest  which 
a  carrier  may  have  in  a  producing  corporation  as  the  result  of 
ownership  by  the  carrier  of  stock  in  such  corporation,  provided 
the  corporation  has  been  organized  in  good  faith.  (9)  Reject- 
ing the  construction  placed  by  the  Government  upon  the 
commodities  clause,  it  is  decided  that  that  clause,  when  all  its 
provisions  are  harmoniously  construed,  has  solely  for  its  object 
to  prevent  carriers  engaged  in  interstate  commerce  from  being 
associated  in  interest  at  the  time  of  transportation  with  the 
commodities  transported,  and  it  therefore  only  prohibits  rail- 
road companies  engaged  in  interstate  commerce  from  trans- 
portating  in  such  commerce  commodities  under  the  following 
circumstances  and  conditions:  (a)  When  the  commodity  has 
been  manufactured,  mined  or  produced  by  a  railway  company 
or  under  its  authority  and  at  the  time  of  transportation  the 
railway  company  has  not  in  good  faith  before  that  act  of 
transportation  parted  with  its  interest  in  such  commodity; 
{b)  when  the  railway  company  owns  the  commodity  to  be 
transported  in  whole  or  in  part;  (c)  when  the  railway  company 
at  the  time  of  transportation  has  an  interest,  direct  or  indirect, 
in  a  legal  sense  in  the  commodity,  which  last  prohibition  does 
not  apply  to  commodities  manufactured,  mined,  produced, 
42  Approved  June  29,  1906,  c.  3591,  34  Stat.  584. 

91 


§  49      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES 

owned,  etc.,  by  a  corporation  because  a  railway  company  is  a 
stockholder  in  such  corporation.  Such  ownership  of  stock  in  a 
producing  company  by  a  railway  company  does  not  cause  it  as 
owner  of  the  stock  to  have  a  legal  interest  in  the  commodity 
manufactured,  etc.,  by  the  producing  corporation.  (10)  As 
thus  construed  the  commodities  clause  is  a  regulation  of  com- 
merce inherently  within  the  power  of  Congress  to  enact  .^ 
The  contention  that  the  clause  if  applied  to  pre-existing  rights 
will  operate  to  take  property  of  railroad  companies  and  there- 
fore violate  the  due  process  provision  of  the  Fifth  Amendment, 
having  been  based  upon  the  assumption  that  the  clause  pro- 
hibited and  restricted  in  accordance  with  the  construction 
which  the  Government  gave  that  clause  is  not  tenable  as  to 
the  act  as  now  construed  which  merely  enforces  a  regulation 
of  commerce  by  which  carriers  are  compelled  to  dissociate 
themselves  from  the  products  which  they  carry  and  does  not 
prohibit  where  the  carrier  is  not  associated  with  the  commodity 
carried.  (11)  The  constitutional  power  of  Congress  to  make 
regulations  for  interstate  commerce  is  not  limited  by  any  re- 
quirement that  the  regulations  should  apply  to  all  commodities 
alike,  nor  does  an  exception  of  one  commodity  from  a  general 
regulation  of  interstate  commerce  necessarily  render  a  statute 
unconstitutional  as  discriminating  between  carriers;  and  the 
exception  of  timber  in  the  commodities  clause  of  the  Hepburn 
Act  does  not  render  the  act  unconstitutional,  nor  can  the 
question  of  the  expediency  of  such  an  exception  affect  the 
question  of  power.  (12)  Where,  as  in  this  instance,  the  pro- 
vision for  penalties  is  separable  from  the  provisions  for  regula- 
tions, the  court  will  not  consider  the  question  of  the  constitu- 
tionality of  the  penalty  provisions  in  a  suit  brought  by  the 
Government  to  enjoin  carriers  from  violating  the  regulations 
and  in  which  no  penalties  are  sought  to  be  recovered.  (13)  As 
the  construction  now  given  the  act  differs  widely  from  the 
construction  which  the  Government  gave  to  the  act  and  which 
it  was  the  purpose  of  these  suits  to  enforce,  it  is  not  necessary 

«  Citing  New  Haven  Railroad  v.  Interstate  Com.  Comm.,  200  U.  S.  361, 
50  L.  ed.  515,  26  Sup.  Ct.  272. 

92 


INTERSTATE    COMMERCE  §  50 

in  reversing  and  remanding,  to  direct  the  character  of  decrees 
which  shall  be  entered,  but  simply  to  reverse  and  remand  the 
case  with  directions  to  enforce  and  apply  the  statute  as  it  is 
now  construed.  (14)  Although  the  Delaware  and  Hudson 
Company  may  originally  have  been  chartered  principally  for 
mining  purposes,  as  it  is  now  engaged  as  a  common  carrier  by 
rail  in  the  transportation  of  coal  in  th(^  channels  of  interstate 
commerce,  it  is  a  railroad  company  within  the  purview  of  the 
commodities  clause  and  is  subject  to  the  provisions  of  that 
clause  as  they  are  now  construed.^ 

§  50.  State  Requirement  That  Interstate  and  Other  Trains 
Stop  at  Specified  Stations.^^ 

Whether  an  order  stopj^ing  interstate  trains  at  specified 
stations  is  a  direct  regulation  of  interstate  commerce  depends 
on  the  local  facilities  at  those  stations,  inability  of  fast  inter- 
state trains  to  make  schedule,  loss  of  patronage  and  compen- 
sation for  carrying  the  mails,  and  the  inability  of  such  trains 
to  pay  expenses  if  additional  stops  are  required  are  all  matters 
to  be  considered  in  determining  whether  adequate  facilities 

"  United  States  v.  Delaware  &  Hudson  Co.,  213  U.  S.  366,  53  L.  ed.  836, 
29  Sup.  Ct.  527,  rev'g  164  Fed.  215,  cited  in  District  of  Columbia  v.  Brooke, 
214  U.  S.  138,  149,  53  L.  ed.  941,  29  Sup.  Ct.  560,  as  holding,  "That  Congress 
may  in  the  exercise  of  the  powers  to  regulate  commerce  among  the  States, 
discriminate  between  commodities  and  between  carriers  engaged  in  such 
commerce.  And  it  was  said  that  the  assertion  that  'injustice  and  favorit- 
ism' might  'be  operated  thereby,'  could  'have  no  weight  in  passing  upon 
the  question  of  power.'  "  In  the  citing  case  the  question,  in  connection 
with  the  citation,  was  discrimination,  the  power  of  Congress  and  police 
power. 

In  a  case  as  to  the  construction  of  the  Commerce  Act  and  the  reasonable- 
ness of  terminal  charges  the  court,  per  Mr.  Justice  Brewer,  in  discussing  the 
case  in  delivering  the  opinion  of  the  court,  said:  "Further,  it  is  shown  by 
the  affidavits  that  the  amount  of  such  terminal  charge  is  not  entered  upon 
the  general  freight  charges  of  the  companies,  but  is  kept  as  a  separate  item. 
The  Union  Stock  Yards  Company  is  an  independent  corporation  and  the 
fact,  if  it  be  a  fact,  that  most  or  even  all  of  its  stock  is  owned  by  the  several 
railroad  companies  entering  into  Chicago  does  not  make  its  line  or  property 
part  of  the  lines  or  property  of  the  separate  railroad  companies."  Interstate 
Commerce  Commission  v.  Stickney,  215  U.  S.  98,  54  L.  ed.  — ,  30  Sup. 
Ct.— . 

*5See  §  118,  herein. 

93 


§  50      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

have  been  furnished  to  the  stations  at  which  the  company  is 
ordered  by  State  authorities  to  stop  such  trains;  and  wliile  the 
sufficiency  of  the  facilities  above  mentioned  is  not  of  itself  a 
Federal  question,  it  may  be  considered  by  the  United  States 
Supreme  Court  for  the  purpose  of  determining  whether  an 
order,  requiring  interstate  trains  to  stop  at  stations  within  the 
State  already  adequately  suppUed  with  transportation  facilities, 
does  or  does  not  regulate  interstate  commerce,  and  such  an 
order  made  directly  or  through  the  instrumentality  of  a 
commission  is  void  where  the  local  facilities  are,  as  above  stated, 
adequate  ."^^ 

So  where  a  State  statute  required  all  regular  passenger  trains 
to  stop  a  sufficient  length  of  time  at  county  seats  to  receive 

46  Atlantic  Coast  Line  Rd.  Co.  v.  Wharton,  207  U.  S.  328,  52  L.  ed.  230, 
28  vSup.  Ct.  121,  123,  rev'g  74  S.  C.  80,  53  S.  E.  290.  The  court,  per  Justice 
Peckham,  says:  "The  term"  adequate  or  reasonable  faciUties  "is  not  in  its 
nature  capable  of  exact  definition.  It  is  a  relative  expression,  and  has  to 
be  considered  as  caUing  for  such  faciUties  as  might  be  fairly  demanded,  re- 
gard being  had,  among  other  things,  to  the  size  of  the  place,  the  extent  of 
the  demand  for  transportation,  the  cost  of  furnishing  the  additional  accom- 
modations asked  for,  and  to  all  other  facts  which  would  have  a  bearing  upon 
the  convenience  and  cost.  *  *  *  That  the  inhabitants  of  a  place  de- 
mand greater  faciUties  than  they  have  is  not  at  all  conclusive  as  to  the 
reasonableness  of  their  demand  for  something  more.  *  *  *  To  stop 
these  trains  at  Latta  "  (the  station  covered  by  the  order)  "  and  other  stations 
like  it,  which  could  bring  equally  strong  reasons  for  the  stoppage  of  trains 
at  their  stations  would  wholly  change  the  character  of  the  trains"  (as  to 
speol)  "and  would  result  in  the  inabiUty  of  what  had  been  fast  trains  to 
make  their  schedule  time,  and  a  consequent  loss  of  patronage,  also  the  loss 
of  compensation  for  carrying  the  mails,  which  would  be  withdrawn  from 
them,  and  the  end  would  be  the  withdrawal  of  the  trains,  because  of  their 
inability  to  pay  expenses.  All  these  are  matters  entitled  to  consideration 
when  the  question  of  convenience  and  adequate  faciUties  arises.  *  *  * 
Of  course  it  is  not  reasonable  to  suppose  that  the  same  faciUties  can  be 
given  to  places  of  very  small  population  that  are  suppUed  to  their  neighbors 
who  live  in  much  larger  communities.  *  *  *  Nevertheless  the  fair 
needs  of  the  locality  for  transportation  to  other  local  points  must  be  con- 
sidere!  and  provided  for.  This,  as  we  think,  has  been  done."  See  Mississippi 
Railroad  Commission  v.  IlUnois  Central  Rd.  Co.,  203  U.  S.  335,  27  Sup.  Ct. 
90,  51  L.  ed.  209.  Examine  Atlantic  Coast  Line  Rd.  Co.  v.  North  Carolina 
Corporation  Commission,  206  U.  S.  1,  51  L.  ed.  933,  27  Sup.  Ct.  585.  The 
judgment  of  the  State  Supreme  Court,  in  the  principal  case,  directing  a 
mandamus  was  held  erroneous  and  reversed  and  the  case  remanded. 

94 


INTERSTATE   COMMERCE  §  50 

and  let  off  passengers  with  safety,  it  appeared  that  the  de- 
fendant company  furnished  four  regular  passenger  trains  per 
day  each  way,  which  were  sufficient  to  accommodate  all  the 
local  and  through  business,  and  that  all  such  trains  stopped  at 
county  seats;  the  act  was  held  to  be  invalid  as  applied  to  an 
express  train  intended  only  for  through  passengers  from  St. 
Louis  to  New  York.^''  But  it  has  been  held  that  the  statute  of 
Ohio  relating  to  railroad  companies,  in  that  State,  which 
provides  that,  "Each  company  shall  cause  three,  each  way,  of 
its  regular  trains  carrying  passengers,  if  so  many  are  run  daily, 
Sundays  excepted,  to  stop  at  a  station,  city  or  village,  contain- 
ing over  three  thousand  inhabitants,  for  a  time  sufficient  to 
receive  and  let  off  passengers;  if  a  company,  or  any  agent  or 
employe  thereof,  violate,  or  cause  or  permit  to  be  violated, 
this  provision,  such  company,  agent  or  employe  shall  be  liable 
to  a  forfeiture  of  not  more  than  one  hundred  nor  less  than 
twenty-five  dollars,  to  be  recovered  in  an  action  in  the  name  of 
the  State,  upon  the  complaint  of  any  person,  before  a  justice 
of  the  peace  of  the  county  in  which  the  violation  occurs,  for  the 
benefit  of  the  general  fund  of  the  county;  and  in  all  cases  in 
which  a  forfeiture  occurs  under  the  provision  of  this  section, 
the  company  whose  agent  or  employe  caused  or  permitted  such 
violation  shall  be  liable  for  the  amount  of  the  forfeiture,  and 
the  conductor  in  charge  of  such  train  shall  be  held,  prima  facie, 
to  have  caused  the  violation"  is  not,  in  the  absence  of  legis- 
lation by  Congress  on  the  subject,  repugnant  to  the  Constitution 
of  the  United  States,  when  applied  to  interstate  commerce 
through  the  State  of  Ohio  on  the  Lake  Shore  and  Michigan 
Southern  Railway.'**  In  another  case  it  is  decided  that  a  State 
may  require  all  regular  passenger  trains  running  wholly  within 
the  State  to  stop  at  stations  at  county  seats  long  enough  to 
discharge  and  take  on  passengers  with  safety."*^ 

47  Cleveland,  C.  C.  &  St.  L.  Ry.  Co.  v.  Illinois,  177  U.  S.  514,  20  Sup.  Ct. 
722,  44  L.  ed.  868. 

48  Lake  Shore  &  M.  S.  Ry.  Co.  v.  Ohio,  173  U.  S.  285,  43  L.  ed.  702,  19 
Sup.  Ct.  465. 

*9Gladson  v.  Minnesota,   166  U.  S.  427,  41   L.  ed.   1064,   17  Sup.  Ct 
627. 

95 


§  51       CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

§  51.  Interstate  Commerce —Police  Power— Intoxicating 
Liquors  — Carriers. 

The  right  to  send  liquors  from  one  State  into  another,  and 
the  act  of  sending  the  same  is  interstate  commerce  the  regula- 
tion of  which  has  been  committed  by  the  Federal  Constitution 
to  Congress.^"  A  State  statute,  therefore,  which  operates  as  an 
interference  with  interstate  commerce  by  prohibiting  the  bring- 
ing intoxicating  liquors  into  a  State  from  another  State  by 
interstate  carriers  is  void.^^  And  this  applies  not  only  to  a 
State  law  which  denies  such  rights,  but  also  to  one  which 
substantially  interferes  with  or  hampers  the  same.^^  So  a  State 
cannot,  for  the  purpose  of  protecting  its  people  against  the 
evils  of  intemperance,  enact  laws  which  regulate  commerce 
between  its  people  and  those  of  other  States  of  the  Union, 
unless  the  consent  of  Congress,  express  or  implied,  is  first 
obtained .^^     The   respective   States   have,    however,    plenary 

50  Vance  v.  W.  A.  Vandercook  Co.,  170  U.  S.  438,  18  Sup.  Ct.  674,  42 
L.  ed.  1100. 

"In  Vance  V.  W.  A.  Vandercook  Co.,  170  U.  S.  438,  444,  42  L.  ed.  1100, 
1103,  18  Sup.  Ct.  674,  676,  Mr.  Justice  Wliite  delivering  the  opinion  of  the 
court  said:  'Equally  well  established  is  the  proposition  that  the  right  to 
send  liquors  from  one  State  into  another,  and  the  act  of  sending  the  same, 
is  interstate  commerce,  the  regulation  whereof  has  been  committed  by  the 
Constitution  of  the  United  States  to  Congress,  and,  hence,  that  a  State 
law  which  denies  such  a  right  or  substantially  interferes  with  or  hampers 
the  same,  is  in  conflict  with  the  Constitution  of  the  United  States,'  "  per 
Mr.  Justice  Brewer,  in  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  222, 
29  Sup.  Ct.  633,  634,  53  L.  ed.  972. 

"Liquor,  however  obnoxious  and  hurtful  it  may  be  in  the  judgment  of 
many,  is  a  recognized  article  of  commerce.  License  Cases,  5  How.  (46  U.  S.) 
504,  577,  12  L.  ed.  256,  289;  Leisy  v.  Hardin,  135  U.  S.  100-110,  34  L.  ed. 
128-133,'  3  Inters.  Com.  Rep.  36,  10  Sup.  Ct.  Rep.  681,"  per  Mr.  Justice 
Brewer  in  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  222,  29  Sup. 
Ct.  633,  634,  53  L.  ed.  972. 

51  Louisville  &  Nashville  Rd.  Co.  v.  F.  W.  Cook  Brewing  Co.  (U.  S.  C.  C. 
A.),  172  Fed.  117.    See  last  preceding  note. 

52  Vance  v.  W.  A.  Vandercook  Co.,  170  U.  S.  438,  42  L.  ed.  1100,  18  Sup. 
Ct.  674.     See  first  note  under  this  section. 

53  Bowman  v.  Chicago  &  Northwestern  Ry.  Co.,  125  U.  S.  465,  8  Sup.  Ct. 
689,  1062,  31  L.  ed.  700.  In  this  case  a  statute  of  Iowa  (Iowa  Code,  §  1553,  as 
amended  by  chap.  143  of  the  Acts  of  the  Twentieth  General  Assembly  in 
1886)  forbidding  common  carriers  to  bring  intoxicating  liquors  into  the 
State  from  any  other  State  or  Territory,  without  being  lu-st  furnished  with 

96 


INTERSTATE    COMMERCE  §  .)! 

power  to  regulate  the  sale  of  intoxicating  liquors  within  their 
borders,  and  the  scope  and  extent  of  such  regulations  depend 
solely  on  the  judgment  of  the  lawmaking  power  of  the  States, 
provided,  always,  they  do  not  transcend  the  limits  of  State 
authority  by  invading  rights  which  are  secured  by  the  Federal 
Constitution,  and  provided  further  that  the  regulations  as 
adopted  do  not  operate  as  a  discrimination  against  the  rights 
of  residents  and  citizens  of  other  States  of  the  Union .^'* 

§  52.  Same  Subject — Delivery — Wilson  Act — Penalty. 

Transportation  of  an  article  in  interstate  commerce  is  not 
complete  until  the  article  is  delivered  to  the  consignee  :^^  nor 
does  the  Wilson  Act  ^^  cause  State  laws  to  attach  to  an  inter- 
state shipment  until  the  completion  of  the  transit  by  delivery 

a  certificate,  under  the  seal  of  the  auditor  of  the  county  to  which  it  is  to 
be  transported  or  consigned,  certifying  that  the  consignee  or  person  to  whom 
it  is  to  be  transported  or  delivered  is  authorized  to  sell  intoxicating  liquors 
in  the  county,  although  adopted  without  a  purpose  of  affecting  interstate 
commerce,  but  as  a  part  of  a  general  system  designed  to  protect  the  health 
and  morals  of  the  people  against  the  evils  resulting  from  the  unrestricted 
sale  and  manufacture  of  intoxicating  liquors  within  the  State,  was  held  to 
be  neither  an  inspection  law,  nor  a  quarantine  law,  but  essentially  a  regula- 
tion of  commerce  among  the  States,  affecting  interstate  commerce  in  an 
essential  and  vital  part,  and  not  being  sanctioned  by  the  authority,  express 
or  implied,  of  Congress,  was  repugnant  to  the  Constitution  of  the  United 
States. 

54  Vance  v.  W.  A.  Vandercook  Co.,  170  U.  S.  438,  18  Sup.  Ct.  674,  42  L. 
ed. 1100. 

States  may  control  liquor  traffic.  Lloyd  v.  Dollison,  194  U.  S.  445,  48  L. 
ed.  1062,  24  Sup.  Ct.  703. 

55  Rhodes  V.  Iowa,  170  U.  S.  412,  42  L.  ed.  1088,  18  Sup.  Ct.  664. 

"That  the  transportation  is  not  complete  until  delivery  to  the  consignee 
is  also  settled.  In  Rhodes  v.  Iowa,  170  U.  S.  412,  426,  42  L.  ed.  1088,  1096, 
18  Sup.  Ct.  664,  669,  it  was  held  that  the  Wilson  Act  (26  Stat.  313,  chap.  728, 
U.  S.  Comp.  Stat.,  1901,  p.  3177)  'was  not  intended  to  and  did  not  cause  the 
power  of  the  State  to  attach  to  an  interstate  commerce  shipment,  whilst 
the  merchandise  was  in  transit  under  such  shipment  and  until  its  arrival 
at  the  point  of  destination,  and  delivery  there  to  the  consignee,'  "  per  Mr. 
Justice  Brewer,  in  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  222, 
29  Sup.  Ct.  633,  634,  53  L.  ed.  972. 

58  Act  of  Aug.  8,  1890,  chap.  728,  26  Stat.  313.  As  to  purpose  of  this  act 
see  Delameter  v.  South  Dakota,  205  U.  S.  93,  51  L.  ed.  724,  27  Sup. 
Ct.  447. 

7  97 


§  52      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES— 

to  the  consignee .^'='     So  where  a  code  provided  that:  "If  any 
express  company,  railway  company  or  any  agent  or  person  in 
the  employ  of  any  express  company,  or  of  any  common  carrier, 
or  any  person  in  the  employ  of  any  common  carrier,  or  if  any 
other  person  shall  transport  or  convey  between  points,  or  from 
one  place  to  another  within  this  State,  for  any  other  persons 
or  corporation,  any  intoxicating  liquors,  without  having  first 
been  furnished  w4th  a  certificate  from  and  under  the  seal  of  the 
county  auditor  of  the  county  to  which  said  liquor  is  to  be  trans- 
ported or  is  consigned  for  transportation,  or  within  which  it  is 
to  be  conveyed  from  place  to  place,  certifying  that  the  consignee 
or  person  to  whom  said  liquor  is  to  be  transported,  conveyed 
or  delivered,  is  authorized  to  sell  such  intoxicating  liquors  in 
such  county,  such  company,  corporation  or  person  so  offending, 
and  each  of  them,  and  any  agent  of  said  company,  corporation 
or  person  so  offending,  shall  upon  conviction  thereof,  be  fined 
in  the  sum  of  one  hundred  dollars  for  each  offense  and  pay  costs 
of  prosecution,  and  the  costs  shall  include  a  reasonable  attorney 
fee  to  be  assessed  by  the  court,  w^hich  shall  be  paid  into  the 
county  fund,  and  stand  committed  to  the  county  jail  until  such 
fine  and  costs  of  prosecution  are  paid;"  it  was  decided  that  such 
statute  could  not  be  held  to  apply  to  a  box  of  spirituous  liquors, 
shipped  by  rail  from  a  point  in  another  State  to  a  citizen  of  the 
State  of  enactment  of  said  code  provision,  at  his  residence  in 
the  latter  State  while  in  transit  from  its  point  of  shipment  to 
its  delivery  to  the  consignee,  without  causing  the  statute  to  be 
repugnant  to  the  Federal  Constitution.    It  was  further  deter- 
mined that  moving  such  goods  in  the  station  from  the  platform 
on  which  they  were  put  on  arrival  to  the  freight  warehouse  was 
a  part  of  the  interstate  commerce  transportation  .^«     And  a 
State  cannot  by  statute  make  penal  all  shipments  of  liquor 
which  are  to  be  paid  for  on  delivery,  commonly  called  C.  0.  D. 
shipments,  and  provide  that  the  place  where  the  money  is  paid 
or  the  goods  delivered  shall  be  deemed  to  be  the  place  of  sale, 

67  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  29  Sup.  Ct.  633,  53 
L.  ed.  972. 

58  Rhodes  V.  Iowa,  170  U.  S.  412,  18  Sup.  Ct.  664,  42  L.  ed.  1088. 

98 


INTERSTATE  COMMERCE  §  53 

and  that  the  carrier  and  his  agents  dcliNcring  the  goods  shall 
be  jointly  liable  with  the  vendor,  as  such  a  law  as  applied  to 
shipments  from  other  States  is  an  attempt  to  regulate  inter- 
state conmierce.'^'* 

§  53.  Interstate  Commerce — Intoxicating  Liquors  Con- 
tinued— "  Arrival  " — Original  Package — Wilson  Act. 

In  the  absence  of  congressional  legislation,  goods  moving  in 
interstate  commerce  cease  to  be  such  commerce  only  after  de- 
livery and  sale  in  the  original  package,  and  the  word  "arrival " 
as  used  in  the  Wilson  law  means  delivery  of  the  goods  to  the 
consignee  and  not  merely  reaching  their  destination.  Nor  does 
the  power  of  the  State  over  intoxicating  liquors  from  other 
States  in  original  packages  after  delivery  and  before  sale, 
given  by  the  Wilson  law,  attach  before  notice  and  expiration 
of  a  reasonable  time  for  the  consignee  to  receive  the  goods  from 
the  carrier,  and  this  rule  is  not  affected  by  the  fact  that  under 
the  State  law  the  carrier's  liability  as  such  may  have  ceased 
and  become  that  of  a  warehouseman.^"  Again,  a  State  statute 
prohibiting  the  sale  of  any  intoxicating  liquors,  except  for 
pharmaceutical,  medicinal,  chemical  or  sacramental  purposes, 
and  under  a  license  from  a  county  court  of  the  State,  is,  as 
applied  to  a  sale  by  the  importer  in  the  original  packages  or 
kegs,  unbroken  and  unopened,  of  such  liquors  manufactured  in 
and  brought  from  another  State,  unconstitutional  and  void,  as 
repugnant  to  the  clause  of  the  Constitution  granting  to  Congress 

59-Adams  Express  Co.  v.  Kentucky,  206  U.  S.  129,  51  L.  ed.  987,  27  Sup. 
Ct.  609. 

"In  Adams  Express  Co.  v.  Kentucky,  20G  V.  S.  129,  135,  51  L.  ed. 
987,  991,  27  Sup.  Ct.  606,  607,  it  was  said:  'The  testimony  showed  that 
the  package  containing  a  gallon  of  whiskey,  was  shipped  from  Cincinnati, 
Ohio,  to  George  Meeze,  at  East  Bernstadt,  Kentucky.  The  transaction  was 
therefore  one  of  interstate  commerce,  and  within  the  exclusive  jurisdiction 
of  Congress.  The  Kentucky  statute  is  obviously  an  attempt  to  regulate  such 
interstate  commerce.  This  is  hardly  questioned  bj^  the  Court  of  Appeals, 
and  is  beyond  dispute  under  the  decisions  of  tliis  court,'  "  per  Mr.  Justice 
Brewer,  in  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  223,  29  Sup.  Ct. 
633,  634,  53  L.  ed.  972. 

soHeyman  v.  Southern  Ry.  Co.,  203  U.  S.  270.  27  Sup.  Ct.  104,  51  L.  ed. 
178,  rev'g  118  Ga.  616. 

99 


§  53      CONSTITUTIONAL    BASIS    OF   ACTIONS    AND    DEFENSES — 

the  power  to  regulate  commerce  with  foreign  nations  and  among 
the  several  States.*^^  So  the  power  to  ship  merchandise  from 
one  State  into  another  carries  with  it,  as  an  incident,  the  right 
of  the  receiver  of  the  goods,  to  sell  them  in  the  original  packages, 
any  State  regulation  to  the  contrary  notwithstanding;  that  is 
to  say,  that  the  goods  received  by  interstate  commerce  remain 
under  the  shelter  of  the  interstate  commerce  clause  of  the 
Constitution,  until  by  a  sale  in  the  original  package  they  have 
been  commingled  with  the  general  mass  of  property  in  the  State; 
but  since  the  enactment  of  1890  ^^  which  provides :  "  That  all 
fermented,  distilled  or  other  intoxicating  liquors  or  liquids 
transported  into  any  State  or  Territory,  or  remaining  therein 
for  use,  consumption,  sale  or  storage  therein,  shall  upon  arrival 
in  such  State  or  Territory  be  subject  to  the  operation  and  effect 
of  the  laws  of  such  State  or  Territory  enacted  in  the  exercise 
of  its  police  powers,  to  the  same  extent  and  in  the  same  manner 
as  though  such  liquids  or  liquors  had  been  produced  in  such 
State  or  Territory,  and  shall  not  be  exempt  therefrom  by  reason 
of  being  introduced  therein  in  original  packages  or  otherwise," 
while  the  receiver  of  intoxicating  liquors  in  one  State,  sent 
from  another  State,  has  the  constitutional  right  to  receive  them 
for  his  own  use,  without  regard  to  the  State  laws  to  the  contrary, 
he  can  no  longer  assert  the  right  to  sell  them  in  the  original 
packages  in  defiance  of  law.  A  State  statute,  therefore,  is  uncon- 
stitutional in  so  far  as  it  compels  the  resident  of  the  State  who 
desires  to  order  alcholic  liquors  for  his  own  use,  to  first  communi- 
cate his  purpose  to  a  State  chemist,  and  in  so  far  as  it  deprives 
any  nonresident  of  the  right  to  ship  by  means  of  interstate 
commerce  any  liquor  into  the  State  enacting  such  law  unless 
previous  authority  is  obtained  from  the  officers  of  that  State, 
where,  on  the  face  of  such  regulations,  it  is  clear  that  they 
^^ubject  the  constitutional  right  of  the  nonresident  to  ship  into 
the  State  and  of  the  resident  of  the  State  to  receive  for  his  own 

«i  Leisy  v.  Hardin,  135  U.  S.  100,  10  Sup.  Ct.  681,  34  L.  ed.  128,  overruling 
Pierce  v.  New  Hampshire,  5  How.  (46  U.  S.)  504,  12  L.  ed.  256. 

62  Act  of  Aug.  8,  1890,  chap.  728,  26  Stat.  313,  U.  S.  Comp.  Stat.,  1901, 
p.  3177. 

100 


INTERSTATE   COMMERCE  §  54 

use,  to  conditions  which  are  wholly  incompatible  with  and 
repugnant  to  the  existence  of  the  right  which  the  statute  itself 
acknowledges.^^ 

§  54.  Same  Subject. 

Although  a  State  may  not  forbid  a  resident  therein  from 
ordering  for  his  own  use  intoxicating  li(juors  from  another 
State  it  may  forbid  the  carrying  on  within  its  borders  of  the 
business  of  soliciting  orders  for  such  liquor  although  such  orders 
may  only  contemplate  a  contract  resulting  from  final  acceptance 
in  another  State.^^  In  another  case  it  is  held  that:  (1)  A  State 
statute  which  operates  upon  beer  and  malt  liquors  shipped  from 
other  States  after  their  arrival  and  while  held  for  sale  and  com- 
sumption  within  the  State,  is  not  an  interference  with  inter- 
state commerce  in  view  of  the  provisions  of  the  Wilson  Act. 
(2)  A  State  regulation,  valid  under  the  Wilson  Act,  as  to  liquors 
shipped  from  another  State  after  delivery  at  destination,  is 
not  an  interference  with  interstate  commerce  because  it 
affects  traffic  in,  and  deters  shipment  of,  the  article  into  that 
State.  (3)  The  regulation  of  the  sale  of  liquor  is  essentially  a 
police  power  of  the  State,  and  a  provision  in  a  State  law,  tending 
to  determine  the  purity  of  malt  liquors  sold  in  the  State,  is  an 
exercise  of  the  same  power.  And  (4)  The  purpose  of  the  Wilson 
Act  is  to  make  liquor,  after  its  arrival  in  a  State,  a  domestic 

03  Vance  v.  W.  A.  Vandercook  Co.,  170  U.  S.  43S,  18  Sup.  Ct.  674,  42  L. 
ed.  1100;  S.  C,  act  of  March  5,  1897,  No.  340,  amending  act  of  March  6, 
1896,  No.  61.  See  Scott  v.  Donald,  165  U.  S.  58,  41  L.  ed.  632,  17  Sup.  Ct. 
265. 

"Original  package."  Whether  the  right  of  transportation  of  an  article  of 
commerce  from  one  State  to  another  includes  by  necessary  implication  the 
right  of  the  consignee  to  sell  it  in  unbroken  packages  at  the  place  where  the 
transportation  terminates,  qucere.  Bowman  v.  Chicago  &  Northwestern  Ry. 
Co.,  125  U.  S.  465,  8  Sup.  Ct.  689,  31  L.  ed.  700.  Examine  Cook  v.  Marshall 
County,  Iowa,  196  U.  S.  261,  25  Sup.  Ct.  233,  49  L.  ed.  271;  Austin  v.  Ten- 
nessee, 179  U.  S.  343,  45  L.  ed.  225,  21  Sup.  Ct.  132;  Schollenberger  v. 
Pennsylvania,  171  U.  S.  1,  21,  43  L.  ed.  49,  18  Sup.  Ct.  757;  Rahrer,  In  re 
140  U.  S.  545,  35  L.  ed.  572,  11  Sup.  Ct.  865. 

As  to  purpose  of  Wilson  Act  and  also  as  to  original  package,  see  Dela- 
meter  v.  South  Dakota,  205  U.  S.  93,  51  L.  ed.  724,  27  Sup.  Ct.  447. 

M  Delameter  v.  South  Dakota,  205  U.  S.  93,  27  Sup.  Ct.  447,  51  L.  ed.  724. 

101 


§  55      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

product,  and  to  confer  power  on  the  States  to  deal  with  it 
accordingly.  The  police  power  is,  hence,  to  be  measured  by  the 
right  of  the  State  to  control  or  regulate  domestic  products,  and 
this  creates  a  State  and  not  a  Federal  question  as  respects  the 
commerce  clause  of  the  Constitution ;  and  the  Federal  Supreme 
Court  cannot  review  the  determination  of  the  State  Court  that 
a  State  statute  involved  in  such  a  case  was  not  a  revenue  but 
an  inspection  measure .^^  Again,  a  State  may  control  the  sale 
of  liquor  by  the  dispensary  system  adopted  in  South  Carolina, 
but  when  it  does  so  it  engages  in  ordinary  private  business 
which  is  not,  by  the  mere  fact  that  it  is  being  conducted  by  a 
State,  exempted  from  the  operation  of  the  taxing  power  of  the 
National  Government.^  States  also  have  beyond  question  the 
general  power  to  control  and  regulate  within  their  borders  the 
business  of  dealing  in  or  soUciting  orders  for  the  purchase  of 
intoxicating  liquors,  especially  so  since  the  passage  of  the  Wil- 
son Act.^^ 

§  55.  Regulation  of  Commerce — Insurance. 

The  business  of  insurance  is  not  commerce,  and  the  making 
of  a  contract  of  insurance  is  a  mere  incident  of  commercial 
intercourse  in  which  there  is  no  difference  whatever  between 
insurance  against  fire,  insurance  against  the  perils  of  the  sea, 
or  insurance  of  life.^*  So  the  Penal  Code  of  a  State  making  it 
a  misdemeanor  for  a  person  in  the  State  to  procure  insurance 
for  a  resident  therein  from  an  insurance  company  not  incor- 
porated under  its  laws  and  which  had  not  filed  the  bond  required 
by  the  laws  of  the  State  relative  to  insurance,  is  not  a  regu- 

«5  Pabst  Brewing  Co.  v.  Crenshaw,  198  U.  S.  17,  49  L.  ed.  925,  25  Sup.  Ct. 
552. 

68  South  CaroUna  v.  United  States,  199  U.  S.  4.37,  50  L.  ed.  261,  26  Sup. 
Ct.  110. 

67  Delamater  v.  South  Dakota,  205  U.  S.  93,  51  L.  ed.  724,  27  Sup.  Ct.  447. 

68  New  York  Life  Ins.  Co.  v.  Cravens,  178  U.  S.  389,  44  L.  ed.  1116,  20 
Sup.  Ct.  962;  Hooper  v.  California,  155  U.  S.  648,  15  Sup.  Ct.  209,  .39  L.  ed. 
297,  per  Mr.  Justice  White;  Philadelphia  Fire  Assoc,  v.  New  York,  119 
U.  S.  110,  7  Sup.  Ct.  108,  30  L.  ed.  342;  Paul  v.  Virginia,  8  Wall.  (75  U.  S.) 
168,  19  L.  ed.  357.  Principal  case  is  cited  in  Lottery  Case,  188  U.  S.  321, 
367,  368,  47  L.  ed.  492,  23  Sup.  Ct.  321,  in  dissenting  opinion. 

102 


INTERSTATE    COMMERCE  §  56 

lation  of  commerce,  and  does  not  conflict  with  the  Constitution 
of  the  United  States,  when  enforced  against  the  agent  of  a  New 
York  firm  in  the  code  State  who,  through  his  principals  and 
by  telegram,  procured  for  a  resident  in  such  code  State  apply- 
ing for  it  there,  marine  insurance  on  an  ocean  steamer,  from  an 
insurance  company  incorporated  under  .the  laws  of  Massachu- 
setts, and  which  had  not  filed  the  bond  required  by  the  laws  of 
the  code  State .*^"  In  the  absence  of  action  on  the  part  of  Con- 
gress a  State  may  regulate  the  conduct  of  local  delivery  of  tele- 
graph messages  after  the  interstate  transit  by  wire  is  com- 
pleted 7" 

§  56.  Interstate  Commerce — Bridges — Navigable  Waters 
— Powers  of  Congress  and  of  the  States. 

The  navigable  waters  of  the  United  States  include  such  as 
are  navigable  in  fact,  and  which,  by  themselves  or  their  con- 
nections, form  a  continuous  channel  for  commerce  with  foreign 
countries  or  among  the  States.  Over  these  Congress  has  control 
])y  virtue  of  the  power  vested  in  it  to  regulate  commerce  with 
foreign  nations  and  among  the  several  States .'^^    So  commerce 

69  Hooper  v.  CaHfornia,  155  U.  S.  648,  39  L.  ed.  297,  15  Sup.  Ct.  209,  40 
Cent.  L.  J.  228. 

70  Western  Union  Teleg.  Co.  v.  Wilson,  21.3  U.  S.  52,  53  L.  ed.  693,  29 
Sup.  Ct.  403,  citing  Western  Union  Teleg.  Co.  v.  James,  162  U.  S.  650,  40 
L.  ed.  105,  16  Sup.  Ct.  934. 

71  Miller  v.  New  York,  109  U.  S.  385,  27  L.  ed.  971,  3  Sup.  Ct.  228. 

As  to  commerce  and  navigable  waters  see  the  following  cases:  Leovy  v. 
United  States,  177  U.  S.  621,  44  L.  ed.  914,  20  Sup.  Ct.  797;  St.  Anthony 
Falls  Water  Power  Co.  v.  St.  Paul  Water  Commissioners,  168  U.  S.  349,  42 
L.  ed.  497,  18  Sup.  Ct.  157;  Lake  Shore  &  Micliigan  Southern  Ry.  Co.  v 
Ohio,  165  U.  S.  365,  17  Sup.  Ct.  357,  41  L.  ed.  747;  Covington  &  Cincinnati 
Bridge  Co.  v.  Kentucky,  154  U.  S.  204,  14  Sup.  Ct.  1087,  38  L.  ed.  962 
Luxton  V.  North  River  Bridge  Co.,  153  U.  S.  525,  14  Sup.  Ct.  891,  38  L.  ed 
808;  Illinois  Cent.  Rd.  Co.  v.  Ilhnois,  146  U.  S.  387,  36  L.  ed.  1018,  13  Sup 
Ct.  110;  Willamette  Iron  Bridge  Co.  v.  Hatch,  125  U.  S.  1,  31  L.  ed.  629 
8  Sup.  Ct.  811;  Sands  v.  Manistee  River  Imp.  Co.,  123  U.  S.  288,  8  Sup.  Ct 
113,  31  L.  ed.  149;  Huse  v.  Glover,  119  U.  S.  543,  30  L.  ed.  487,  7  Sup.  Ct 
313;  Escanaba  Co.  v.  Chicago,  107  U.  S.  678,  2  Sup.  Ct.  185,  27  L.  ed.  442 
Bridge  Co.  v.  United  States,  105  U.  S.  470,  26  L.  ed.  1143;  South  Carolina  v. 
Georgia,  93  U.  S.  4,  23  L.  ed.  782;  Railroad  Go.  v.  Richmond,  19  Wall.  (86 
U.  S.)  584,  22  L.  ed.  173;  MonteUo,  The,  11  Wall.  (78  U.  S.)  411,  20  L.  ed. 
191;  Gihnan  v.  Philadelphia,  3  WaU.  (70  U.  S.)  713,  18  L.  ed.  96;  Pennsyl- 

103 


§  56      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

comprehends  navigation;  and  to  free  navigation  froiii  unrea- 
sonable obstructions  by  compelling  the  removal  of  bridges 
which  are  such  obstructions  is  a  legitimate  exercise  of  the 
power  of  Congress  to  regulate  commerce  7^ 

It  is  also  competent  for  Congress,  having  authorized  the  con- 
struction of  a  bridge  of  a  given  height,  over  a  navigable  water, 
to  empower  the  Secretary  of  War  to  determine  whether  the 
proposed  structure  will  be  a  serious  obstruction  to  navigation, 
and  to  authorize  changes  in  the  plan  of  the  proposed  structure.'^ 
But  acts  of  Congress  wliich  merely  regulate  the  height  of 
bridges  over  a  navigable  river  and  the  width  of  their  spans  in 
order  that  they  may  not  interfere  with  navigation,  and  which 
declare  that  such  bridges  shall  be  regarded  as  post  roads, 
confer  no  right  or  franchise  on  a  bridge  company  to  erect  an 
interstate  bridge  or  collect  tolls  for  its  use,  and  do  not  interfere 
with  the  right  of  the  State  granting  the  bridge  company  the 
right  to  erect  such  bridge  to  impose  taxes 7^ 

The  doctrine  has  been  asserted  and  reasserted,  however, 
that  in  the  absence  of  legislation  by  Congress  a  State  may 
authorize  a  navigable  stream  within  its  limits  to  be  obstructed 
by  a  bridge  or  highway 7^  So  a  State  may  authorize  extensions 
thereon  of  an  interstate  bridge  and  connections  therewith  nec- 
essary to  make  it  available  for  the  use  contemplated  where  its 
construction  has  been  authorized  by  Congress,  and  even  though 
such  extensions  and  connections  were  not  within  the  plans  and 
specifications  as  approved  by  the  Secretary  of  War,  the  con- 

vania  v.  Wheeling  &  Belmont  Bridge  Co.,  18  How.  (59  U.  S.)  421,  15  L.  ed. 
435;  Veazie  v.  Moor,  14  How.  (55  U.  S.)  568,  14  L.  ed.  545;  United  States  v. 
Coombs,  12  Pet.  (37  U.  S.)  72,  9  L.  ed.  1004;  New  York  v.  Miln,  11  Pet. 
(36  U.  S.)  102,  9  L.  ed.  648;  Wilson  v.  Blackbird  Creek  Marsh  Co.,  2  Pet. 
(27  U.  S.)  245,  7  L.  ed.  412;  Gibbons  v.  Ogden,  9  Wheat.  (22  U.  S.)  1,  6 
L.  ed.  23.    See  note  at  end  of  this  section. 

72  Union  Bridge  Co.  v.  United  States,  204  U.  S.  364,  51  L.  ed.  523,  27  Sup. 
Ct.  367. 

73  Miller  v.  New  York,  109  U.  S.  385,  27  L.  ed.  971,  3  Sup.  Ct.  228. 

74  Henderson  Bridge  Co.  v.  Kentucky,  166  U.  S.  150,  41  L.  ed.  953,  17 
Sup.  Ct.  532. 

75Cardwell  v.  American  Bridge  Co.,  113  U.  S.  205,  28  L.  ed.  959,  5  Sup. 
Ct.  423. 

104 


INTERSTATE    COMMERCE  §  56 

demnation  of  the  land  necessary  for  their  construction  does  not 
contravene  an  act  of  Congress  making  it  unlawful  to  deviate 
in  the  construction  of  any  bridges  over  navigable  waters  from 
the  plan  approved  by  said  Secretary 7^ 

78  Stone  V.  Southern  Illinois  Bridge  Co.,  200  U.  S.  267,  51  L.  ed.  1057,  27 
Sup.  Ct.  615,  aff'g  19-4  Mo.  175. 

See  also  as  to  bridges  the  following  cases:  Chicago,  Burlington  &  Quincy 
Ry.  Co.  V.  Drainage  Comm'rs,  200  U.  S.  561,  26  Sup.  Ct.  341,  50  L.  ed.  590, 
afT'g  212  111.  103,  72  N.  E.  219  (constitutional  law;  police  power  of  State; 
drainage;  removal  of  railroad  bridge);  Keokuk  &  Hamilton  Bridge  Co.  v. 
Illinois,  175  U.  S.  626,  20  Sup.  Ct.  205,  44  L.  ed.  299  (interstate  bridge; 
Federal  franchise;  interstate  commerce;  taxation;  assessment  of  entire  cap- 
ital); Henderson  Bridge  Co.  v.  Henderson  City,  173  U.  S.  592,  624,  43  L. 
ed.  823,  835,  19  Sup.  Ct.  545,  553  (bridge  extending  to  State  water  boundary; 
bridge  authorized  by  Congress;  State's  power  of  taxation;  municipal  tax- 
ation; nonexemption  from  taxation;  constitutional  law);  Lake  Shore  & 
Michigan  Southern  Ry.  Co.  v.  Ohio,  165  U.  S.  365,  17  Sup.  Ct.  357,  41  L. 
ed.  747  (interstate  commerce;  bridges;  navigable  waters);  Covington  & 
Cincinnati  Bridge  Co.  v.  Kentucky,  154  U.  S.  204,  14  Sup.  Ct.  1087,  38  L. 
ed.  962  (interstate  bridge;  regulation  of  interstate  commerce;  constitutional 
law;  powers  of  Congress;  limitation  of  State's  authority;  tolls;  corporation 
contract  with  States);  Luxton  v.  North  River  Bridge  Co.,  153  U.  S.  525,  14 
Sup.  Ct.  891,  38  L.  ed.  808  (commerce  regulation;  power  of  Congress;  inter- 
state bridge;  constitutional  law);  Henderson  Bridge  Co.  v.  Henderson  City, 
141  U.  S.  679,  35  L.  ed.  900,  12  Sup.  Ct.  114  (taxation  of  bridge;  commerce; 
agency  of  Government);  Hannibal  &  St.  Joseph  Rd.  Co.  v.  Missouri  River 
Packet  Co.,  125  U.  S.  260,  31  L.  ed.  731,  8  Sup.  Ct.  874  (interstate  bridge; 
when  not  a  lawful  structure  within  meaning  of  act  of  Congress) ;  Willamette 
Iron  Bridge  Co.  v.  Hatch,  125  U.  S.  1,  31  L.  ed.  629,  8  Sup.  Ct.  811  (bridging 
navigable  river  below  port  of  entry;  police  power  of  State);  Washer  v.  Bul- 
litt County,  110  U.  S.  558,  28  L.  ed.  249,  4  Sup.  Ct.  249  (counties;  common 
law  and  statutory  powers  as  to  bridges);  Escanaba  Co.  v.  Chicago,  107  U.  S. 
678,  2  Sup.  Ct.  185,  27  L.  ed.  442  (commerce  regulation;  concurrent  powers; 
authority  of  State  and  city  over  bridges  over  navigable  waters) ;  Bridge  Co.  v. 
United  States,  105  U.  S.  470,  26  L.  ed.  1143  (bridges  over  navigable  waters; 
power  of  Congress  to  regulate);  Wright  v.  Nagle,  101  U.  S.  791,  25  L.  ed. 
921  (State  legislative  power;  toll  bridge  franchise;  obUgation  of  contract); 
Railroad  Co.  v.  Richmond,  19  Wall.  (86  U.  S.)  584,  22  L.  ed.  173  (interstate 
commerce;  bridges  over  Mississippi  River;  enforcement  of  grain  elevator 
contract) ;  Clinton  Bridge,  The,  10  Wall.  (77  U.  S.)  454,  19  L.  ed.  969  (inter- 
state bridge  as  post  route;  powers  of  Congress;  constitutional  law);  Oilman 
V.  Philadelphia,  3  Wall.  (70  U.  S.)  713,  18  L.  ed.  96  (commerce  regulation; 
bridges  over  navigable  waters;  power  of  Congress;  injunction;  suit  by  ri- 
parian ovraer);  Pennsylvania  v.  Wheeling  &  Belmont  Bridge  Co.,  18  How. 
(59  U.  S.)  421,  15  L.  ed.  435  (commerce  regulation;  power  of  Congress;  ob- 
structions of  navigation;  bridge  over  Ohio  river;  concurrent  powers  of  State 
and  Federal  Covernments). 

105 


§  57       CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

§  57.  Interstate  Commerce — Police  Power — Regulation 
of  Grain  Warehouses,  Elevators,  Warehousemen,  etc. 

As  a  matter  of  domestic  concern  a  State  may  prescribe  regu- 
lations for  warehousing  and  inspecting  grain  and  for  public 
warehouses  generally,  situated  and  carrying  on  their  business 
exclusively  within  her  borders,  even  though  they  are  used  as 
instruments  by  those  engaged  in  interstate  as  well  as  in  State 
commerce;  and  until  Congress  acts  in  reference  to  their  inter- 
state relations,  such  regulations  are  enforceable,  notwithstand- 
ing they  may  indirectly  operate  upon  commerce  beyond  her 
immediate  jurisdiction.  A  case  may  exist,  however,  which 
precludes  a  State,  under  the  form  of  regulating  her  own  affairs, 
from  encroaching  in  the  above  matters  upon  the  exclusive 
domain  of  Congress  in  respect  to  interstate  commerce. '''  It  is 
also  a  legitimate  exercise  of  the  police  power  over  a  business 
affected  by  a  public  interest  and  not  in  violation  of  the  Federal 
Constitution  for  a  State  to  provide  by  statute  for  a  maximum 
charge  for  elevating,  recei\ang,  weighing  and  discharging  grain, 
and  that  in  the  process  of  handling  grain  by  means  of  floating 
and  stationary  elevators,  the  lake  vessels  or  propellers,  the 
ocean  vessels  or  steamships,  and  canal  boats,  shall  only  be 
required  to  pay  the  actual  cost  of  trimming  or  shoveling  to 
the  leg  of  the  elevator  when  unloading,  and  trimming  cargo 
when  loading.''*  But  a  statute  regulating  grain  warehouses 
and  weighing  and  handling  of  grain  and  declaring  elevators, 
etc.,  to  be  public  warehouses,  and  their  owners  to  be  public 
warehousemen,  and  requiring  them  to  give  bond  for  the  faithful 
performance  of  their  duty  as  such,  also  fixing  rates  of  storage, 
and  requiring  them  to  keep  insured  for  the  owner's  benefit  all 
grain  stored  with  them,  does  not  apply  to  elevators  built  by  a 
person  only  for  the  purpose  of  storing  his  own  grain,  and  not 
to  receive  and  store  the  grain  of  others,  and,  being  so  construed, 
such  an  enactment  does  not  deny  the  equal  protection  of  the 

77  Munn  V.  Illinois,  94  U.  S.  113,  24  L.  ed.  77. 

78  Budd  V.  New  York,  143  U.  S.  517,  12  Sup.  Ct.  468,  .36  L.  ed.  247.  Ex- 
plaining Chicago,  Minneapolis  &  St.  Paul  Ry.  Co.  v.  Minnesota,  134  U.  S. 
418,  33  L.  ed.  970,  10  Sup.  Ct.  462. 

106 


INTERSTATE   COMMERCE  §  58 

laws  to  the  owner  of  an  elevator  made  a  public  warehouse  by  it, 
nor  does  it  deprive  him  of  his  property  without  due  process 
of  law,  nor  amount  to  a  regulation  of  commerce  between  the 
States,  and  is  not  in  conflict  with  the  Federal  Constitution.'^ 

§  58.  Interstate  Commerce — Police  Power — Quarantine 
and  Inspection  Regulations. 

While  a  State  may  enact  sanitary  laws,  and  for  the  purpose 
of  self-protection,  establish  quarantine  and  reasonable  inspec- 
tion n^gulations,  and  prevent  persons  and  animals  having 
contagious  or  infectious  diseases  from  entering  the  State,  it 
cannot,  beyond  what  is  absolutely  necessary  for  self-protection, 
interfere  with  transportation  into  or  through  its  territory;  and 
the  power  vested  in  Congress  to  regulate  commerce  precludes 
State  quarantine  regulations  affecting  the  transportation  of 
cattle  by  interstate  railroads  and  interfering  with  interstate 
commerce.  Such  regulations  are  not  a  legitimate  exercise  of 
the  police  power  of  a  State;  that  power  cannot  be  exercised 
over  the  interstate  transportation  of  subjects  of  commerce .*° 

79  Brass  v.  Stoeser,  153  U.  S.  391,  38  L.  ed.  757,  14  Sup.  Ct.  857. 

80  Railroad  Co.  (Hannibal  &  St.  Joseph  Rd.  Co.)  v.  Husen,  95  U.  S.  465, 
24  L.  ed.  527.  Examine  Asbell  v.  Kansas,  209  U.  S.  251,  52  L.  ed.  778,  28 
Sup.  Ct.  485,  aff'g  60  Kan.  51;  Reid  v.  Colorado,  187  U.  S.  137,  47  L.  ed.  108, 
23  Sup.  Ct.  92,  aff'g  29  Colo.  333,  68  Pac.  228;  Missouri,  Kansas  &  T.  R.  Co. 
V.  Haber,  169  U.  S.  613,  628,  42  L.  ed.  878,  18  Sup.  Ct.  488. 

The  principal  case  is  cited  in  Keller  v.  United  States,  213  U.  S.  138,  144, 
53  L.  ed.  941,  29  Sup.  Ct.  470;  Jacobson  v.  Massachusetts,  197  U.  S.  11,  28, 
49  L.  ed.  643,  25  Sup.  Ct.  358;  Crossman  v.  Lurman,  192  U.  S.  189,  196,  ?4 
Sup.  Ct.  234,  48  L.  ed.  401 ;  Compagnie  Frangaise,  De  Navigation  A.  Vapeur 
V.  Board  of  Health,  186  U.  S.  380,  399,  46  L.  ed.  1209,  22  Sup.  Ct.  811; 
Louisiana  v.  Texas,  176  U,  S.  1,  24,  44  L.  ed.  347,  20  Sup.  Ct.  251;  Lake 
Shore  &  Michigan  S.  Ry.  Co.  v.  Oliio,  173  U.  S.  285,  300,  325,  19  Sup.  Ct. 
465,  43  L.  ed.  702;  New  York  v.  Roberts,  171  U.  S.  658,  677,  19  Sup.  Ct. 
235,  43  L.  ed.  345  (in  dissenting  opinion) ;  Schollenberger  v.  Pennsylvania, 
171  U.  S.  1,  13,  43  L.  ed.  49,  18  Sup.  Ct.  757;  Hennington  v.  Georgia,  163 
U.  S.  299,  313,  41  L.  ed.  166,  16  Sup.  Ct.  1086;  Louisville  &  Nashville  Rd. 
Co.  V.  Kentucky,  161  U.  S.  677,  700,  40  L.  ed.  849,  16  Sup.  Ct.  714;  Plumley 
V.  Massachusetts,  155  U.  S.  461,  468,  39  L.  ed.  223,  15  Sup.  Ct.  154;  Bren- 
nan  v.  Titusville,  153  U.  S.  289,  300,  14  Sup.  Ct.  829,  38  L.  ed.  719;  Lawton  v. 
Steele,  152  U.  S.  133,  137,  14  Sup.  Ct.  499,  38  L.  ed.  385;  Minnesota  v. 
Barber,  136  U.  S.  313,  324,  34  L.  ed.  455,  10  Sup.  Ct.  862;  Leisy  v.  Hardin, 
135  U.  S.  100,  120,  153,  10  Sup.  Ct.  681,  34  L.  ed.  128;  Bowman  v.  Cliicago  & 

107 


§  58      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

But  until  Congress  acts  upon  the  subject  a  State  may  in  the 
exercise  of  its  police  power  enact  laws  for  the  inspection  of  cattle 
coming  from  other  States. ^^  So  a  State  may  establish  a  system 
of  quarantine  laws  for  the  protection  of  health,  even  though 
some  of  the  rules  may  amount  to  a  regulation  of  commerce, 
provided  that  Congress  has  not  acted  in  the  matter  by  covering 
the  same  ground  or  by  forbidding  State  laws.^^  And  a  State  or 
Territory  has  the  right  to  legislate  for  the  safety  and  welfare 
of  its  people,  which  is  not  taken  from  it  because  of  the  exclusive 
right  of  Congress  to  regulate  interstate  commerce;  and  an 
inspection  law  affecting  interstate  commerce  is  not  for  that 
reason  invalid  unless  it  is  in  conflict  with  an  Act  of  Congress 
cr  is  an  attempt  to  regulate  interstate  commerce.  So  a  law 
of  a  Territory  ^^  making  it  an  offense  for  any  railroad  com- 
pany to  receive  for  shipment  beyond  the  limits  of  the  Territory, 
hides,  which  had  not  been  inspected  as  required  by  the  law  is 
not  unconstitutional  as  an  unwarranted  regulation  of,  or  bur- 
den on,  interstate  commerce.  The  law  being  otherwise  valid 
the  amount  of  an  inspection  fee  is  not  a  judicial  question;  it 
rests  with  the  legislature  to  fix  the  amount,  and  will  only 
present  a  valid  objection  if  so  unreasonable  and  dispropor- 
tionate to  the  services  rendered  as  to  attack  the  good  faith  of  the 
law.  It  was  also  held,  concerning  the  above  stated  law,  that 
the  court  would  take  judicial  notice  of  the  fact  that  cattle  run 
at  large  in  the  great  stretches  of  country  in  the  West,  identified 
only  as  to  ownership  by  brands,  and  of  the  necessity  for,  and 
use  of,  branding  of  such  cattle,  and  that  it  would  not  strike 
down  State  or  territorial  legislation,  essential  for  prevention  of 
crime,  requiring  the  inspection  of  hides  to  be  shipped  without 

Northwestern  Ry.  Co.,  125  U.  S.  465,  491,  492,  513,  31  L.  ed.  700,  8  Sup. 
Ct.  689,  1062;  Philadelphia  &  Southern  Steamship  Co.  v.  Pennsylvania,  122 
U.  S.  326,  345,  30  L.  ed.  1200,  7  Sup.  Ct.  1118;  New  Orleans  Gas  Co.  v. 
Louisiana  Light  Co.,  115  U.  S.  650,  662,  29  L.  ed.  516,  6  Sup.  Ct.  252;  Brown 
V.  Houston,  114  U.  S.  622,  631,  5  Sup.  Ct.  1091,  29  L.  ed.  257. 

81  Asbell  V.  Kansas,  209  U.  S.  251,  52  L.  ed.  778,  28  Sup.  Ct.  485. 

82  Morgan's  Steamship  Co.  v.  Louisiana  Board  of  Health,  118  U.  S.  455,  30 
L.  ed.  237,  6  Sup.  Ct.  1114.  Examine  Oceanic  Steam  Navigation  Co.  v. 
Stranahan,  214  U.  S.  320,  53  L.  ed.  1013,  29  Sup.  Ct.  671,  aff' g  155  Fed.  428. 

83  Act  of  New  Mexico  of  March  19,  1901. 

108 


INTERSTATE    COMMERCE  §  59 

the  State,  although  the  statute  did  not  require  such  inspection 
of  hides  not  to  be  so  shipped.  It  was  also  decided  that  the 
provision  in  §  10,  Art.  I,  of  the  Constitution  of  the  United 
States  that  States  shall  not  lay  imposts  and  duties  on  imports 
and  exports  was  not  contravened  by  a  State  inspection  law  ap- 
plicable only  to  goods  shipped  to  other  States,  and  not  to 
goods  shipped  directly  to  foreign  countries.*'* 

§  59.  Same  Subject. 

While  in  a  proper  case  Federal  authorities  may  adopt  a 
quarantine  line  adopted  by  a  State,  where  the  Secretary  makes 
regulations  adopting  it  as  applying  to  all  commerce  whether 
interstate  or  intrastate,  and  nothing  on  the  face  of  the  order 
indicates  whether  he  would  have  made  such  an  order  if  limited 
to  interstate  commerce,  the  order  is  not  divisible,  and  the 
court  cannot  declare  that  it  relates  solely  to  interstate  com- 
merce but  must  declare  it  void  as  an  entirety.*^  Again,  the 
rule  that  State  inspection  laws,  which  do  not  provide  adequate 
inspection  and  impose  a  burden  beyond  the  cost  of  inspection, 
are  repugnant  to  the  commerce  clause  of  the  Constitution, 
does  not  apply  to  liquors  after  they  have  ceased  to  be  articles 
of  interstate  commerce  under  the  provisions  of  the  Wilson 
Act.*^  But  a  State  law  requiring  the  inspection  of  meats  and 
the  payment  by  the  owner  thereof  of  a  certain  per  cent  to  the 
inspector  for  his  compensation  is  void  as  being  in  restraint  of 
interstate  commerce  and  as  imposing  a  discriminating  tax 
upon  the  products  and  industries  of  some  States  in  favor  of 
those  of  another.  The  principle  is  also  applicable,  in  such  a 
case,  that  a  State  enactment  is  void,  if,  by  its  necessary  opera- 
tion, it  destroys  rights  granted  or  secured  by  the  Constitution 
of  the  United  States."     A  State  statute  providing  for  the 

84  McLean  v.  Denver  &  Rio  Grande  R.  Co.,  203  U.  S.  38,  51  L.  ed.  78,  27 
SupCt.  l,aff'g78Pac.  74. 

85  Illinois  Central  Rd.  v.  McKendree,  203  U.  S.  514,  51  L.  ed.  298,  27  Sup. 
Ct.  153. 

86  Pabst  Brewing  Co.  v.  Crenshaw,  198  U.  S.  17,  49  L.  ed.  925,  25  Sup. 
Ct.  552. 

87  Brimmer  v.  Rebman,  138  U.  S.  78,  34  L.  ed.  862,  11  Sup.  Ct.  213. 

109 


§  60      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

inspection  of  oil  is  not  an  unconstitutional  bun  Ic  ii  on  interstate 
commerce  as  applied  to  oil  coming  from  other  States  but  mean- 
while stored  in  the  State  enacting  the  statute  for  convenience 
of  distribution  and  for  reshipping  from  tank  cars  and  barrel- 
ing.** A  State  may  require  all  logs  running  out  of  a  boom, 
chartered  or  to  be  chartered,  to  be  surveyed,  inspected  and 
sealed,  and  improvements  made  in  a  navigable  river  by  the 
construction  of  the  boom  and  its  works,  and  the  exaction  of 
reasonable  charges  for  the  use  of  such  works,  including  fees  of 
State  officials  for  inspecting  and  sealing,  cannot,  when  done 
under  State  authority  be  considered  in  any  just  sense  a  burden 
upon  interstate  commerce.*^ 

§  60.  Interstate  Commerce — Taxation — Generally.^" 

Interstate  commerce  by  corporations  is  entitled  to  the  same 
protection  against  State  exactions  which  is  given  to  such 
commerce  when  carried  on  by  individuals.'^^  Interstate  com- 
merce cannot  be  taxed  at  all  by  a  State,  even  though  the  same 
amount  of  tax  should  be  laid  on  domestic  commerce,  or  that 
which  is  carried  on  solely  within  the  State.^^  Again,  the  follow- 
ing propositions  as  to  the  taxation  by  States  and  their  mu- 
nicipalities or  corporations  engaged  in  carrying  on  interstate 
commerce  have  been  settled;  the  Constitution  of  the  United 
States  having  given  to  Congress  the  power  to  regulate  com- 
merce, not  only  with  foreign  nations,  but  among  the  several 
States,  that  power  is  necessarily  exclusive  whenever  the  sub- 
jects are  national  in  their  character,  or  admit  of  only  one 
uniform  system  or  plan  of  regulation.    No  State  can  compel  a 

88  General  Oil  Co.  v.  Grain,  209  U.  S.  211,  52  L.  ed.  754,  28  Sup.  Ct.  475; 
Tenn.  act  of  1899,  chap.  349,  pp.  811,  814.  See  Diamond  Match  Co.  v.  On- 
tonagon, 188  U.  S.  82,  23  Sup.  Ct.  266,  47  L.  ed.  394. 

89  Lindsay  &  Phelps  Co.  v.  Mullen,  176  U.  S.  126,  20  Sup.  Ct.  325,  44  L. 
ed.  400. 

90  As  to  taxation,  see  also  §§  67  e<  seq.,  herein. 

91  Gloucester  Ferry  Co.  v.  Pennsylvania,  114  U.  S.  196,  5  Sup.  Ct.  826, 
29  L.  ed.  158. 

Taxation  of  Franchises,  see  Joyce  on  Franchises,  §§  417-461. 

92  Robbins  v.  Shelby  Taxing  Dist.,  120  U.  S.  489,  30  L.  ed.  694,  7  Sup.  Ct. 
592. 

110 


intp:rstate  commerce  §61 

party  individual  or  corporation,  to  pay  for  the  privilege  of 
engaging  in  interstate  commerce.  This  immunity  does  not 
prevent  a  State  from  imposing  ordinary  property  taxes  upon 
property  having  a  situs  within  its  territory  and  employed  in 
interstate  commerce.  The  franchise  of  a  corporation,  although 
that  franchise  is  the  business  of  interstate  commerce,  is,  as  a 
part  of  its  property,  subject  to  State  taxation,  providing  at 
least  the  franchise  is  not  derived  from  the  United  States.  No 
corporation,  even  though  engaged  in  interstate  commerce,  can 
appropriate  to  its  own  use  property  public  or  private,  without 
liability  to  a  charge  therefor.^^  A  State  may  also  impose  upon 
a  consolidated  company  composed  of  several  foreign  corpora- 
tion a  charge  of  a  percentage  upon  its  entire  authorized  stock 
as  a  fee  to  the  State  for  filing  the  articles  of  consolidation  in 
the  office  of  the  Secretary  of  State  without  which  filing  it  could 
not  possess  the  powers,  immunities  and  privileges  of  a  cor- 
poration in  such  State,  and  such  charge  is  not  a  tax  on  inter- 
state commerce,  or  the  right  to  carry  on  the  same,  or  the  in- 
struments thereof;  and  its  enforcement  involves  no  attempt 
on  the  part  of  the  State  to  extend  its  taxing  power  beyond  its 
territorial  limits.^^  The  protection  of  the  commerce  clause  of 
the  Federal  Constitution  is  not,  however,  available  to  defeat 
a  State  stamp  tax  law  on  transactions  wholly  within  a  State 
because  they  affect  property  without  that  State,  or  because 
one  or  both  of  the  parties  previously  came  from  other  States.^^ 

§  61.  Interstate  Commerce  — Taxation  — Carriers  — Ex- 
press Companies  —  Vessels  —  Railroads  —  Telegraph  Com- 
panies.^^ 

Although,  as  above  stated,  it  is  well  settled  that  no  State 
can  interfere  with  interstate  commerce  through  the  imposition 

93  Atlantic  &  Pacific  Telegraph  Co.  v.  Philadelphia,  190  U.  S.  160,  47  L. 
ed.  995,  23  Sup.  Ct.  817,  citing  Robbins  v.  Shelby  Taxing  District,  120  U.  S. 
489,  492,  30  L.  ed.  694,  7  Sup.  Ct.  592. 

M  Ashley  v.  Ryan,  153  U.  S.  436,  17  Sup.  Ct.  865,  .38  L.  ed.  773. 

95  Hatch  V.  Reardon,  204  U.  S.  152,  51  L.  ed.  415,  27  Sup.  Ct.  188,  aff'g 
184N.  Y.  431. 

98  As  to  taxation,  see  also  §§  67  et  seq.,  herein. 

Ill 


§  Gl       CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

of  a  tax  which  is,  in  effect,  a  tax  for  the  privilege  of  transacting 
such  commerce,  still  such  restriction  upon  the  power  of  a  State 
does  not  in  the  least  degree  abridge  its  right  to  tax  at  their 
full  value  all  the  instrumentalities  used  for  such  commerce. 
The  capital  stock  of  a  corporation  and  the  shares  in  a  joint- 
stock  company  represent  not  only  its  tangible  property,  but 
also  its  intangible  property,  including  therein  all  corporate 
franchises  and  all  contracts,  privileges  and  good  will  of  the 
concern;  and  when,  as  in  the  case  of  an  express  company,  the 
tangible  property  of  the  corporation  is  scattered  through  differ- 
ent States  by  means  of  which  its  business  is  transacted  in  each, 
the  situs  of  this  tangible  property  is  not  simply  where  its  home 
office  is,  but  is  distributed  wherever  its  tangible  property  is 
located  and  its  work  is  done.    So  it  is  declared  in  this  connection 
that   no   fine-spun   theories  about   situs   should   interfere  to 
enable  these  large  corporations,  whose  business  is  of  necessity 
carried  on  through  many  States,  from  bearing  in  each  State 
such  burden  of  taxation  as  a  fair  distribution  of  the  actual 
value  of  their  property  among  those  States  requires.^''     It  is 
further  decided  that  although  the  transportation  of  the  sub- 
jects of  interstate  commerce,  or  the  receipts  received  there- 
from, or  the  occupation  or  business  of  carrying  it  on,  cannot 
be  directly  subjected  to  State  taxation,  yet  property  belong- 
ing to  corporations  or  companies  engaged  in  such  commerce 
may  be;  and  whatever  the  particular  form  of  the  exaction,  if 
it  is  essentially  only  property  taxation,  it  v/ill  not  be  con- 
sidered as  falling  within  the  inhibition  of  the  Constitution. 
The  property  of  corporations  engaged  in  interstate  commerce, 
situated  in  the  several  States  through  which  their  lines  or 
business  extends,  may  be  valued  as  a  unit  for  the  purposes  of 
taxation,  taking  into  consideration  the  uses  to  which  it  is  put 
and  all  the  elements  making  up  the  aggregate  value;  and  a 
')roportion  of  the  whole  fairly  and  proj^erly  ascertained  may 
be  taxed  by  the  particular  State,  without  violating  any  Federal 
restriction.    While  there  is  an  undoubted  distinction  between 

Adams  Express  Co.  v.  Ohio,  166  U.  S.  185,  41  L.  ed.  965,  17  Sup.  Ct. 


97 

604. 

112 


INTERSTATE    COMMERCE  §  61 

the  property  of  railroad  and  telegraph  companies  and  that  of 
express  companies,  there  is  the  same  unity  in  the  use  of  the 
entire  property  for  the  specific  purposes,  and  there  arc  the 
same  elements  of  value,  arising  from  such  use.  The  classifica- 
tion of  express  companies  with  railroad  and  telegraph  com- 
panies, as  subject  to  the  unit  rule,  does  not  deny  the  equal 
protection  of  the  laws;  as  that  provision  in  the  Fourteenth 
Amendment  was  not  intended  to  prevent  a  State  from  adjust- 
ing its  system  of  taxation  in  all  proper  and  reasonable  ways, 
and  was  not  intended  to  compel  a  State  to  adopt  an  iron  rule 
of  equal  taxation.^*  Nor  is  the  general  rule  that  tangible  per- 
sonal property  is  subject  to  taxation  by  the  State  in  which  it 
is,  no  matter  where  the  domicile  of  the  owner  may  be,  affected 
by  the  fact  that  the  property  is  employed  in  interstate  trans- 
portation on  either  land  or  water.  Vessels  registered  or  en- 
rolled are  not  exempt  from  ordinary  rules  respecting  taxation 
of  personal  property.  The  artificial  situs  created  as  the  home 
port  of  a  vessel,  under  §  4141,  Rev.  Stat.,  only  controls  the 
place  of  taxation  in  the  absence  of  an  actual  situs  elsewhere. 
Vessels,  though  engaged  in  interstate  commerce,  employed  in 
such  commerce  wholly  within  the  limits  of  a  State,  are  subject 
to  taxation  in  that  State  although  they  may  have  been  registered 
or  enrolled  at  a  port  outside  its  limits. '*'*  So  the  business  of 
receiving  and  landing  of  passengers  and  freight  is  incident  to 
their  transportation,  and  a  tax  upon  such  receiving  and  land- 
ing is  a  tax  upon  transportation  and  upon  commerce,  interstate 
or  foreign,  involved  in  such  transportation.  The  only  inter- 
ference by  a  State  with  the  landing  and  receiving  of  passengers 
or  freight  arriving  by  vessels  from  another  State  or  from  a 
foreign  country  which  is  permissible,  is  confined  to  measures 
to  prevent  confusion  among  the  vessels,  and  collisions  between 
them,  to  insure  their  safety  and  convenience,  and  to  facilitate 

98  Adams  Express  Co.  v.  Ohio,  165  U.  S.  194,  17  Sup.  Ct.  305,  41  L.  ed. 
683.  Case  followed  in  Adams  Express  Co.  v.  Kentucky,  166  U.  S.  171,  17 
Sup.  Ct.  527,  41  L.  ed.  960;  Adams  Express  Co.  v.  Indiana,  165  U.  S.  255, 
41  L.  ed.  707,  17  Sup.  Ct.  901. 

99  Old  Dominion  Steamship  Co.  v.  Virginia,  198  U.  S.  299,  25  Sup.  Ct. 
686,  49  L.  ed.  1059. 

8  113 


§  61       CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

the  discharge  or  receipt  of  their  passengers  or  freight.  Free- 
dom of  transportation  between  the  States,  or  between  the 
United  States  and  foreign  countries,  implies  exemption  from 
charges  other  than  such  as  are  imposed  by  way  of  compensation 
for  the  use  of  the  property  employed,  or  for  facilities  afforded 
for  its  use,  or  as  ordinary  taxes  upon  the  value  of  the  property.^ 
A  State  statute,  however,  which  levies  a  tax  upon  the  gross 
receipts  of  railroads  for  the  carriage  of  freight  and  passengers, 
into,  out  of,  or  through  the  State  is  a  tax  upon  commerce 
among  the  States  and  is,  therefore,  void.  While  a  State  may 
tax  the  money  actually  within  the  State,  after  it  has  passed 
beyond  the  stage  of  compensation  for  carrying  persons  or 
property,  as  it  may  tax  other  money  or  property  within  its 
limits,  a  tax  upon  receipts  for  this  class  of  carriage  specifically 
is  a  tax  upon  the  connnerce  out  of  which  it  arises,  and,  if  that 
be  interstate  commerce,  it  is  void  under  the  Constitution. 
The  States  cannot  be  permitted,  under  the  guise  of  a  tax  upon 
business  transacted  within  their  borders,  to  impose  a  burden 
upon  commerce  among  the  States,  when  the  business  so  taxed 
is  itself  interstate  commerce.^  So  a  State  statute  imposing  a 
tax  upon  railroad  companies  ecjual  to  one  per  cent  of  their 
gross  receipts  is,  as  to  those  companies  whose  receipts  include 
receipts  from  interstate  business  a  burden  on  interstate  com- 
merce and  as  such  violative  of  the  commerce  clause  of  the 
Constitution.^ 

1  Gloucester  Ferry  Co.  v.  Pennsylvania,  114  U.  S.  196,  5  Sup.  Ct.  826,  29 
L.  ed.  158.  See  Henderson  v.  New  York,  92  U.  S.  259,  23  L.  ed.  543  [criti- 
cising Passenger  Cases,  7  How.  (48  U.  S.)  283,  12  L.  ed.  702;  New  York  v. 
Miln,  11  Pet.  (36  U.  S.)  102,  9  L.  ed.  648];  State  Freight  Tax  Case,  15  Wall. 
(82  U.  S.)  232,  21  L.  ed.  146.  Compare  Head  Money  Cases,  112  U.  S.  580, 
28  L.  ed.  798,  5  Sup.  Ct.  247,  where  act  of  Congress  imposing  a  charge  upon 
every  passenger  not  a  citizen  of  this  country  was  held  a  valid  exercise  of  its 
power  to  regulate  commerce. 

2  Fargo  V.  Michigan,  121  U.  S.  230,  30  L.  ed.  888,  7  Sup.  Ct.  857. 

3  Galveston,  Harrisburg  &  San  Antonio  Ry.  Co.  v.  Texas,  210  U.  S.  217, 
52  L.  ed.  1031,  28  Sup.  Ct.  638,  rev'g  97  S.  W.  71,  following  Philadelphia  & 
Southern  Mail  S.  S.  Co.  v.  Pennsylvania,  122  U.  S.  326,  30  L.  ed.  1200,  7  Sup. 
Ct.  1118,  distinguishing  Maine  v.  Grand  Trunk  Ry.  Co.,  142  U.  S.  217,  35 
L.  ed.  994,  12  Sup.  Ct.  121,  163,  and  held  that  the  latter  case  does  not  over- 
rule the  former. 

114 


INTERSTATE    COMMERCE  §  62 

A  single  tax,  aissesscd  under  the  laws  of  a  State  upon  receipts 
of  a  telegraph  company  which  were  partly  derived  from  inter- 
state commerce  and  partly  from  commerce  within  the  State, 
and  which  were  capable  of  separation  but  were  returned  and 
assessed  in  gross  and  without  separation  or  apportionment,  is 
invalid  in  proportion  to  the  extent  that  such  receipts  were  de- 
rived from  interstate  commerce,  but  is  otherwise  valid;  and 
while  a  Circuit  Court  of  the  United  States  should  enjoin  the 
collection  of  the  tax  upon  the  portion  of  the  receipts  derived 
from  interstate  commerce,  it  should  not  interfere  with  those 
derived  from  commerce  entirely  within  the  State."* 

§  62.  Interstate  Commerce — Taxation — Railroads  Con- 
tinued— Other  Property.^ 

While  a  State  cannot  impose  a  tax  on  the  movement  or 
transportation  of  persons  or  property  from  one  State  to  another 
and  such  a  tax  is  an  interference  with  and  a  regulation  of 
commerce  between  the  States,  beyond  the  power  of  the  State 
to  impose,  ^  still  a  State  tax  against  a  railroad  corporation, 
incorporated  under  its  laws,  on  account  of  transportation  done 
by  it  from  one  point  within  the  State  to  another  point  within 
it,  but  passing  during  the  transportation  without  the  State 
and  through  part  of  another  State,  is  not  a  tax  upon  interstate 
commerce,  and  does  not  infringe  the  provisions  of  the  Con- 
stitution of  the  United  States.^  So  a  statute  of  a  State,  im- 
posing a  tax  on  the  capital  stock  of  all  corporations  engaged 
in  the  transportation  of  freight  or  passengers  within  the  State, 
under  which  a  corporation  of  another  State,  engaged  in  running 
railroad  cars  into,  through  and  out  of  the  State,  and  having  at 
all  times  a  large  number  of  such  cars  within  the  State,  is  taxed 

*  Ratterman  v.  Western  Union  Tel.  Co.,  127  U.  S.  411,  32  L.  ed.  229,  8 
Sup.  Ct.  1127.  (The  decisions  of  this  court  respecting  the  taxation  of  tele- 
graph companies  reviewed  in  this  case.)  See  Joyce  on  Electric  Law  (2d  ed.), 
§§83a-11.3a,  911-940b. 

s  As  to  taxation,  see  also  §§  67  et  seq.,  herein. 

8  Railroad  Co.  v.  Maryland,  21  Wall.  (88  U.  S.)  456,  22  L.  ed.  678. 

7  Lehigh  Valley  R.  R.  Co.  v.  Pennsylvania,  145  U.  S.  192,  36  L.  ed.  672, 
12  Sup.  Ct.  806,  45  Atl.  L.  J.  511,  11  Ry.  &  Corp.  L.  J.  302. 

115 


§  ()o       CONSTITUTIONAL    BASIS    OF   ACTIONS  AND    DEFENSES — 

by  taking  as  the  basis  of  assessment  such  proportion  of  its 
capital  stock  as  the  number  of  miles  of  railroad  over  which  its 
cars  are  run  within  the  State  bears  to  the  whole  number  of 
miles  in  this  and  other  States  over  which  its  cars  are  run,  does 
not,  as  applied  to  such  a  corporation,  violate  the  clause  of  the 
Constitution  of  the  United  States  granting  to  Congress  the 
power  to  regulate  commerce  among  the  several  States.®  Again, 
a  State  statute  which  requires  every  corporation,  person  or 
association  operating  a  railroad  within  the  State  to  pay  an 
annual  tax  for  the  privilege  of  exercising  its  franchises  therein, 
to  be  determined  by  the  amount  of  its  gross  transportation 
receipts,  and  further  provides  that,  when  applied  to  a  railroad 
lying  partly  within  and  partly  without  the  State,  or  to  one 
operated  as  a  part  of  a  line  or  system  extending  beyond  the 
State,  the  tax  shall  be  equal  to  the  proportion  of  the  gross 
receipts  in  the  State,  to  be  ascertained  in  the  manner  provided 
by  the  statute,  does  not  conflict  with  the  Constitution  of  the 
United  States;  and  the  tax  thereby  imposed  upon  a  foreign 
corporation,  operating  a  line  of  railway,  partly  within  and 
partly  without  the  State,  is  one  within  the  power  of  the  State 
to  levy.** 

§  63.  Same  Subject— Property  Left  Temporarily  in  State.^° 

Another  factor  of  importance  is  that  merchandise  may  cease 
to  be  interstate  commerce  at  an  intermediate  point  between  the 
place  of  shipment  and  ultimate  destination;  and  if  kept  at 
such  point  for  the  use  and  profit  of  the  owners  and  under  the 
protection  of  the  laws  of  the  State,  it  becomes  subject  to  the 
taxing  and  police  power  of  the  State.^^  So  there  may  be  an 
interior  movement  of  property  through  the  State  which  does 
not  constitute  interstate  commerce  even  though  the  property 

8  Pullman's  Palace  Car  Co.  v.  Pennsylvania,  141  U.  S.  18,  35  L.  ed.  613, 
11  Sup.  Ct.  876,  followed  in  Pullman's  Palace  Car  Co.  v.  Hayward,  141 
U.  S.  36,  35  L.  ed.  621,  11  Sup.  Ct.  883. 

9  Maine  v.  Grand  Trunk  Ry.  Co.,  142  U.  S.  217,  35  L.  ed.  904,  12  Sup.  Ct. 
121,  163,  11  Ry.  &  Corp.  L.  J.  52,  48  Am.  &  Eng.  R.  Cas.  602. 

10  As  to  taxation,  see  also  §§  66  e<  seq.,  herein. 

11  General  Oil  Co.  v.  Crain,  209  U.  S.  211,  52  L.  ed.  754,  28  Sup.  Ct.  475. 

116 


interstatp:  commerce  §  64 

come  from  or  be  destined  to  another  State  there  to  be  trans- 
ported by  railroad,  so  that  logs  left  in  a  sorting  boom  or  gap 
after  those  intended  to  be  actually  used  are  taken  away  are 
not  property  engaged  in  interstate  commerce  so  as  to  be 
exempt  from  taxation  in  the  State  where  located .^^  But  sheep 
driven  through  a  State  from  a  point  without  to  another  point 
without  such  State  for  the  purpose  of  being  shipped  by  rail 
from  the  latter  point  is  property  engaged  in  interstate  com- 
merce to  such  an  extent  as  to  be  exempt  from  taxation  by  the 
State  through  which  they  are  driven.^^  Again,  while  a  State 
may  tax  property  which  has  moved  in  the  channels  of  inter- 
state commerce  after  it  is  at  rest  within  the  State  and  has 
become  commingled  with  the  mass  of  property  therein,  it  may 
not  discriminate  against  such  pi'operty  by  imposing  upon  it  a 
burden  of  taxation  greater  than  that  imposed  upon  similar 
domestic  property  .^^ 

§  64.  Interstate  Commerce — Taxation  of  Bridges  and 
Bridge  Companies.^^ 

A  tax  on  the  capital  stock  of  an  interstate  bridge,  which  is 
not  a  tax  on  franchises  conferred  by  the  Federal  Government, 
but  on  those  conferred  by  the  State,  is  not  a  tax  on  interstate 
connnerce.^^  So  a  railroad  bridge  across  a  navigable  river 
forming  the  boundary  line  between  two  States  is  not  by  reason 
of  being  an  instrument  of  interstate  commerce  exempt  from 
taxation  by  either  State  upon  the  part  within  it.^^    And  a  tax 

12  Diamond  Match  Co.  v.  Ontonagon,  1S8  U.  R.  82,  23  Sup.  Ct.  266,  47 
L.  ed.  394,  following  Coe  v.  Errol,  116  U.  S.  517,  2!)  L.  ed.  715,  6  Sup.  Ct. 
475. 

13  Kelley  v.  Rhodes,  188  U.  S.  1,  47  L.  ed.  359,  23  Sup.  Ct.  259.  Distin- 
guishing Pittsburg  &  Southern  Coal  Co.  v.  Bates,  156  U.  S.  577,  15  Sup.  Ct. 
415,  39  L.  ed.  538;  Coe  v.  Errol,  116  U.  S.  517,  6  Sup.  Ct.  475,  29  L.  ed.  715; 
Brown  v.  Houston,  114  U.  S.  622,  29  L.  ed.  257,  5  Sup.  Ct.  1091. 

"  Darnell  &  Son  Co.  v.  Memphis,  208  U.  S.  113,  28  Sup.  Ct.  247,  52  L.  ed. 
413. 

15  As  to  taxation,  see  also  §§  67  e<  seq.,  herein. 

18  Keokuk  &  Hamilton  Bridge  Co.  v.  Illinois,  175  U.  S.  626,  44  L.  ed.  299, 
20  Sup.  Ct.  205. 

1^  Pittsburg,  Cincinnati,  Chicago  &  St.  Louis  Ry.  Co.  v.  Board  Public 
Works  West  Virginia,  172  U.  S.  32,  43  L.  ed.  354,  19  Sup.  Ct.  90.    See  Hen- 

117 


§  64       CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSKS— 

is  not  one  on  interstate  business  carried  on,  over,  or  by  means 
of  an  interstate  bridge,  where  the  company  does  not  transact 
such  business  but  it  is  carried  on  by  the  persons  and  corpora- 
tions which  pay  the  company  tolls  for  the  privilege  of  using 
such  bridge;  and  the  fact  that  the  tax  may  to  some  extent  be 
affected  by,  and  might  be  supposed  to  increase  the  rate  of 
tolls,  is  too  remote  and  incidental  to  make  it  a  tax  on  the 
business  transacted.^* 

derson  Bridge  Co.  v.  Henderson  City,  141  U.  S.  679,  35  L.  ed.  900,  12  Sup. 
Ct.  114. 

18  Henderson  Bridge  Co.  v.  Kentucky,  166  U.  S.  150,  41  L.  ed.  953,  17 
Sup.  Ct.  532. 


118 


FEDERAL  AGENCIES — TAXATION 


65 


CHAPTER  VI 

CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — FEDERAL 
AGEN(;iES — TAXATION  ^ 


G5.  Instrumentalities  of  Federal 
Government — Federal  and 
State  Control  —  National 
Banks. 

66.  Same  Subject. 

67.  Taxation — Power   of  States — 

Generally. 

68.  Taxation — Obligation  of  Con- 

tract— Equal  Protection  of 
Law — Due  Process  of  Law. 

69.  Taxation  —  Exemptions^ — In- 

strumentalities of  Federal 
Government  —  State  Agen- 
cies. 

70.  Taxation — Instrumentalities  of 

Federal  Government — Qual- 
ification or  Limitation  of 
Doctrine  of  Exemption. 

7L  Taxation — National  Banks. 

72.  Taxation  —  Savings  Banks  — 
Obligations,    Securities, 


Bonds,  Stocks,   Notes,  etc., 
of  United  States. 

Same  Subject. 

Same  Subject — When  Tax  Is 
on  Franchise. 

Taxation — Franchises  or  Privi- 
leges Conferred  by  Congress 
—  Railroads  —  Telegraph 
Companies. 

Taxation — Railroads. 
77.  Taxation —  Franchises — Capi- 
tal Stock. 

Taxation  —  "Franchise"  — 
"  Corporate  Franchise  "  — 
Bridge  Companies  —  Insur- 
ance Companies — Uniform- 
ity of  Taxation. 

Exemption  from  Taxation — 
Power  of  State  as  to — Effect 
of  Consolidation,  etc. 


76 


78 


79 


§  65.  Instrumentalities  of  Federal  Government — Federal 
and  State  Control — National  Banks. 

In  1875  the  Federal  Supreme  Court  held  that  national  banks 
which  are  organized  under  and  brought  into  existence  by  an 
act  of  Congress,^  which  body  is  the  sole  judge  of  the  necessity 
for  their  creation,  are  the  instruments  designed  to  be  used  to 
aid  the  Government  in  the  administration  of  an  important 

1  See  §  1,  herein. 

As  to  interstate  commerce  and  taxation,  see  §§  60-64,  herein. 

2  Act  of  June  3,  1864,  chap.  106,  13  Stat.  99,  100,  18  Stat.  123;  Rev.  Stat. 
U.S.,  §§  5133-5243;  Comp.  Stat.  U.  S.,  1901,  pp.  3454  et  seq.;  Comp.  Stat. 
U.  S.,  1907,  p.  1035. 

119 


§  (35       CONSTITUTIONAL    BASIS    OF   ACTIONS   AND  DEFENSES — 

branch  of  the  public  service,  and  the  States  can  exercise  no 
control  over  them,  nor  in  anywise  affect  their  operation, 
except  so  far  as  Congress  may  see  proper  to  permit.^  In  Waite 
V.  Dowley,^  a  case  as  to  the  validity  of  a  State  statute  relating 
to  the  taxation  of  stockholders,  decided  in  1876,  Mr.  Jus- 
tice Miller  said:  ''The  proposition  on  which  this  statute  is 
asserted  to  be  void  is  that  Congress  has  legislated  upon  the 
same  subject,  and  that,  where  there  exists  a  concurrent  right 
of  legislation  in  the  States  and  in  Congress,  and  the  latter  has 
exercised  its  power,  there  remains  in  the  States  no  authority 
to  legislate  on  the  same  matter.  It  is  not  necessary  to  dispute 
that  proposition,  nor,  when  stated  in  this  general  language, 
can  it  be  controverted.  It  is  none  the  less  true,  however,  that 
the  line  which  divides  what  is  occupied  exclusively  by  any 
legislation  of  Congress  from  what  is  left  open  for  the  action  of 
the  States  is  not  always  well  defined,  and  is  often  distinguished 
by  such  nice  shades  of  differences  on  each  side  as  to  require  the 
closest  scrutiny  when  the  principle  is  invoked,  as  it  is  in  this 
case.  We  have  more  than  once  held  in  this  court  that  the 
national  banks  organized  under  the  acts  of  Congress  are  sub- 
ject to  State  legislation,  except  when  such  legislation  is  in  con- 
flict with  some  act  of  Congress,  or  where  it  tends  to  impair  or 
destroy  the  utility  of  such  banks,  as  agents  or  instrumentalities 
of  the  United  States,  or  interferes  with  the  purposes  of  their 
creation."  In  Davis  v.  Elmira  Savings  Bank,^  a  case  decided 
in  1895,  it  was  held  that  a  State  law  which  provides  for  the 
payment  by  the  receiver  of  an  insolvent  bank,  in  the  first 
place,  of  deposits  in  the  bank  by  savings  banks,  when  applied 
to  an  insolvent  national  bank,  is  in  conflict  with  a  statute  ^  of 
the  United  States,  directing  the  Comptroller  of  the  Currency 
to  make  ratable  dividends  of  the  money  paid  over  to  him  by 
such  receiver,   on  all  claims  proved  to  his  satisfaction,   or 

3  Farmers'  &  Mechanics'  Nat.  Bk.  v.  Bearing,  91  U.  S.  29,  23  L.  ed.  196. 

4  94  U.  S.  527,  533,  24  L.  ed.  181. 

5  161  U.  S.  275,  283,  40  L.  ed.  700,  16  Sup.  Ct.  502. 

6  Rev.  Stat.  U.  S.,  §  5236;  Comp.  Stat.  U.  S.,  1901,  p.  3508;  see  Scott  & 
Beamen's  Index  Analyses  of  Fed.  Stat.,  title  Nat.  Bks. 

120 


FEDERAL  AGENCIES TAXATION  §  66 

adjudicated  in  a  court  of  competent  jurisdiction,  and  is  there- 
fore void  when  attempted  to  be  applied  to  a  national  bank. 
It  was  declared  by  Mr.  Justice  White  in  this  case  that  national 
banks  are  instrumentalities  of  the  Federal  Government  created 
for  a  public  purpose,  and  as  such  subject  to  the  paramount 
authority  of  the  United  States.  It  follows  that  an  attempt  by 
the  State,  to  define  their  duties  or  control  the  conduct  of  their 
affairs  is  absolutely  void,  wherever  such  attempted  exercise  of 
authority  expressly  conflicts  with  the  laws  of  the  United 
States,  and  either  frustrates  the  purpose  of  the  national  legis- 
lation or  impairs  the  efficiency  of  these  agencies  of  the  Fed- 
eral Government  to  discharge  their  duties,  for  the  performance 
of  which  they  were  created.  These  principles  are  axiomatic, 
and  are  sanctioned  by  the  repeated  adjudications  of  the  Fed- 
eral Supreme  Court  .^ 

§  66.  Same  Subject. 

It  was  held,  in  1896,  that  State  statutes  invalidating  prefer- 
ences made  by  insolvent  debtors  and  assignments  or  transfers 
made  in  contemplation  of  insolvency,  do  not  conflict  with  the 
provisions  of  the  Revised  Statutes  of  the  United  States  *  re- 
lating to  national  banks  and  to  mortgages  of  real  estate  made 
to  them  in  good  faith  by  way  of  security  for  debts  previously 
contracted,  and  are  valid  when  applied  to  claims  of  such  banks 
against  insolvent  debtors.  It  was  further  decided  in  the  same 
case  that  it  is  only  when  a  State  law  incapacitates  a  national 
bank  from  discharging  its  duties  to  the  Government  that  it 
becomes  unconstitutional.  This  proposition  is  harmonious 
with  the  proposition  that  national  banks  are  instrumentalities 
of  the  Federal  Government,  created  for  a  public  purpose,  and 

7  Davis  V.  Elmira  Savings  Bank,  161  U.  S.  275,  283,  40  L.  ed.  700,  16  Sup. 
Ct.  502,  per  Mr.  Justice  White,  quoted  from  in  Easton  v.  Iowa,  188  U.  S. 
220,  238,  47  L.  ed.  452,  23  Sup.  Ct.  288,  per  Mr.  Justice  Shiras,  restated  in 
McClellan  v.  Chipman,  164  U.  S.  347,  357,  41  L.  ed.  461,  17  Sup.  Ct.  85. 
Principal  case  is  affirmed  as  to  the  first  part  of  the  above  proposition  in  Mc- 
Clellan V.  Chipman,  164  U.  S.  347,  41  L.  ed.  461,  17  Sup.  Ct.  85. 

sRev.  Stat.  U.  S.,  §§5136,  5137;  Comp.  Stat.  U.  S.,  1901,  pp.  3455 
et  seq.;  Comp.  Stat.  U.  S.,  1907,  p.  1035.  See  1  Scott  &  Beamen's  Index 
Analyses  of  Fed.  Stat.,  under  title,  Banks,  also  National  Banks. 

121 

r 


§  ()()       CONSTITUTIONAL    BASIS   OF    ACTIONS  AND   DEFENSES — 

as  such  necessarily  subject  to  the  paramount  authority  of  the 
United  States.'*  Again,  in  1902  it  was  held  that  it  rests  upon 
principle  and  authority  that  Congress,  having  power  to  create 
a  system  of  national  banks,  is  the  judge  as  to  the  extent  of  the 
powers  which  should  be  conferred  upon  them,  and  has  the  sole 
power  to  regulate  and  control  the  exercise  of  their  operations. 
State  legislatures  are,  therefore,  precluded  from  interfering, 
whether  with  friendly  or  hostile  intentions,  with  such  banks 
or  their  officers  in  the  exercise  of  the  powers  conferred  upon 
them  by  the  General  Government.  This  rule  especially  applies 
where  Congress  has  acted  expressly  in  exercising  its  powers  of 
control  and  supervision  over  national  banks  for  the  protection 
of  creditors  and  has  vested  the  power  of  control  and  visitation 
over  them  in  Federal  officers.  It  was  also  decided  in  the  same 
case  that  while  a  State  has  the  legitimate  power  to  define  and 
punish  crimes  by  general  laws  applicable  to  all  persons  within 
its  jurisdiction,  and  it  may  declare,  by  special  laws,  certain 
acts  to  be  criminal  offenses  when  committed  by  officers  and 
agents  of  its  own  banks  and  institutions,  it  is  without  lawful 
power  to  make  such  special  laws  applicable  to  banks  organized 
and  operated  under  the  laws  of  the  United  States.^"  This  last 
case  is  cited  to  the  first  point  in  a  case  decided  in  1905  which 
holds  that  although  in  a  limited  sense  there  is  an  element  of 
contract  in  becoming  a  shareholder  of  a  national  bank,  the 
liability  for  debts  of  the  institution  is  not  contractual  but  is 
based  upon  the  provisions  to  that  effect  in  the  national  banking 
law.  The  Government  creating  the  bank  has  prescribed  the 
terms  upon  which  ownership  of  its  shares  can  be  acquired,  and 
only  those  are  exempted  from  liability  who  are  specially  de- 
scribed in  the  statute;  nor  can  any  shareholders  be  exempted 
from  such  liability  by  a  State  statute.^^  It  was  again  decided 
in  1905  that  States  have  no  power  to  enact  legislation  con- 

9  McClellan  v.  Chipman,  164  U.  S.  347,  41  L.  ed.  461,  17  Sup.  Ct.  85,  aff'g 
on  the  first  point.  National  Bank  v.  Commonwealth,  9  Wall.  (76  U.  S.)  353, 
19  L.  ed.  701;  aff'g  on  the  second  point  Davis  v.  Elmira  Savings  Bank,  161 
U.  S.  275,  40  L.  ed.  700,  16  Sup.  Ct.  502. 

10  Easton  v.  Iowa,  188  U.  S.  220,  23  Sup.  Ct.  288,  47  L.  ed.  252. 

11  Christopher  v.  Norvell,  201  U.  S.  216,  50  L.  ed.  732,  26  Sup.  Ct.  495. 

122 


FEDERAL  AGENCIES — TAXATION  §  67 

travelling  Federal  laws  for  the  control  of  national  banks.^^  No 
loss  of  the  entire  debt  is  incurred  by  a  national  bank,  as  a 
penalty  or  otherwise,  by  reason  of  the  provisions  of  the  usury 
law  of  a  State,  where  the  only  forfeiture  provided  by  an  act 
of  Congress  ^^  is  of  the  entire  interest  which  the  note,  bill,  or 
other  evidence  of  debt,  carries  with  it,  when  the  rate  knowingly 
received  or  charged  by  such  bank  is  in  excess  of  that  allowed 
by  such  enactment.^''  But  §§3411  and  5214  of  the  Revised 
Statutes,  cannot  be  so  construed  together,  and  effect  given  to 
both,  as  to  leave  a  national  bank  liable  to  the  duty  imposed 
by  §  5214  and  yet  entitle  it  to  the  exemption  provided  by 
§3411  under  the  contingency  stated  therein.  The  provisions 
of  this  latter  section,  exempting  banks  from  taxation  on  cir- 
culation, does  not  relate  to  national  banks  but  to  State  banks 
only.  One  of  the  public  policies  of  the  National  Bank  Act  was 
to  secure  the  public  credit  and  encourage  the  issue  of  notes  to 
circulate  as  currency  founded  upon  United  States  bonds,  and 
§  3411  will  not  be  construed  as  intending  to  exempt  those 
national  banks  that  allowed  their  circulation  to  fall  below 
five  per  cent  of  their  capital  stock  from  the  taxation  provided 
by  §  5214  to  create  a  fund  to  bear  the  burden  common  to  all 
national  banks  for  engraving  and  printing  the  notes. ^^ 

§  67.  Taxation— Power  of  States— Generally. 

In  distributing  the  power  of  taxation  the  Constitution  re- 
tained to  the  States  the  absolute  power  of  direct  taxation,  but 
granted  to  the  Federal  Government  the  power  of  the  same 
taxation  upon  condition  that,  in  its  exercise,  such  taxes  should 
be  apportioned  among  the  several  States  according  to  num- 
bers; and  this  was  done,  in  order  to  protect  to  the  States,  who 
were  surrendering  to  the  Federal  Government  so  many  sources 

12  Guthrie  v.  Harkness,  199  U.  S.  148,  50  L.  ed.  130,  26  Sup.  Ct.  4. 

13  Act  of  June  3,  1864,  chap.  106,  13  Stat.  99,  100,  18  Stat.  123;  Rev.  Stat. 
U.  S.,  §§  5133-5243;  Comp.  Stat.  U.  S.,  1901,  pp.  3454  et  seq.;  Comp.  Stat. 
U.  S.,  1907,  p.  1035. 

14  Farmers'  &  Mechanics'  Nat.  Bk.  v.  Bearing,  91  U.  S.  29,  23  L.  ed.  196. 

15  Merchants'  National  Bk.  v.  United  States,  214  U.  S.  33,  53  L.  ed.  899, 
29  Sup.  Ct.  593,  aff'g  42  Ct.  CI.  6. 

123 


§67       CONSTITUTIONAL     BASIS    OF    ACTIONS    AND    DEFENSES — 

of  income,  the  power  of  direct  taxation,  which  was  their  prin- 
cipal remaining  resource.^^  Presumptively  all  property  within 
the  territorial  limits  of  a  State  is  subject  to  its  taxing  power, 
and  the  burden  of  proof  is  on  one  claiming  that  any  particular 
property  is  by  contract  or  otherwise  beyond  the  reach  thereof.^'' 

The  power  of  legislation,  and  consequently,  of  taxation, 
operates  on  all  the  persons  and  property  belonging  to  the  body 
politic;  this  is  an  original  principle,  which  has  its  foundation 
in  society  itself;  it  is  granted  by  all,  for  the  benefit  of  all;  it 
resides  in  government,  as  a  part  of  itself;  and  need  not  be 
reserved,  where  property  of  any  description,  or  the  right  to 
use  it  in  any  manner,  is  granted  to  individuals  or  corporate 
bodies.^^  Owing,  however,  to  the  conditions  of  modern  busi- 
ness a  large  proportion  of  valuable  property  is  now  found  in 
intangible  things,  such  as  franchises,  and  these  are,  like  other 
property,  subject  to  taxation .^^  And  it  is  not  beyond  the 
power  of  a  State,  so  far  as  the  Federal  Constitution  is  concerned, 
to  tax  the  franchise  of  a  corporation  at  a  different  rate  from 
the  tangible  property  in  the  State .^"^ 

The  State  may  impose  taxes  upon  the  corporation  as  an 
entity  existing  under  its  laws,  as  well  as  upon  the  capital  stock 
of  the  corporation  or  its  separate  corporate  property.  And  the 
manner  in  which  its  value  shall  be  assessed  and  the  rate  of 
taxation,  however  arbitrary  or  capricious,  are  mere  matters  of 
legislative  discretion.  A  tax  upon  a  corporation  may  be 
proportioned  to  the  income  received  as  well  as  to  the  franchise 
granted  or  the  property  possessed.  The  fact  that  taxation 
increases  the  expenses  attendant  upon  the  use  or  possession  of 
the  thing  taxed,  of  itself  constitutes  no  objection  to  its  con- 
stitutionality.    The  exercise   of  the  authority  which  every 

16  Pollock  V.  Farmers'  Loan  &  Trust  Co.,  158  U.  S.  601,  39  L.  ed.  1108, 
15  Sup.  Ct.  912.    See  s.  c,  157  U.  S.  429,  39  L.  ed.  759,  15  Sup.  Ct.  673. 

17  Metropolitan  St.  Ry.  Co.  v.  New  York  State  Board  of  Tax  Comm'rs, 
199  U.  S.  1,  50  L.  ed.  65,  25  Sup.  Ct.  23. 

18  Providence  Bank  v.  BilUngs,  4  Pet.  (29  U.  S.)  514,  8  L.  ed.  939. 

19  Metropolitan  St.  Ry.  Co.  v.  New  York  State  Board  of  Tax  Comm'rs, 
199  U.  S.  1,  50  L.  ed.  65,  25  Sup.  Ct.  23. 

20  Coulter  v.  Louisville  &  N.  Rd.  Co.,  196  U.  S.  599,  25  Sup.  Ct.  342,  49 
L.  ed.  615. 

124 


FEDERAL  AGENCIES— TAXATION  §  08 

State  possesses  to  tax  its  corporations  and  all  their  property, 
real  and  personal,  and  their  franchises,  and  to  graduate  the  tax 
upon  the  corporations  according  to  their  business  or  income, 
or  the  value  of  their  propcMly,  when  this  is  not  done  by  dis- 
criminating against  rights  held  in  other  States,  and  the  tax  is 
not  on  imports  or  tonnages  or  transportation  to  other  States, 
cannot  be  regarded  as  conflicting  with  any  constitutional  power 
of  Congress.-^  Before  a  special  assessment,  levied  by  legislative 
authority  of  a  State,  as  in  case  of  a  provision  for  back  taxes  in 
a  State,  can  be  actually  enforced,  or  during  the  process  of  its 
enforcement,  the  taxpayer  must  have  an  opportunity  to  be 
heard  as  to  its  validity  and  extent;  but  this  rule  is  met  where 
the  State  Court  has  afforded  the  taxpayer  full  opportunity  to 
be  heard  on  both  of  those  questions,  and  after  such  opportunity 
has  rendered  a  judgment  providing  for  the  enforcement  of 
such  amount  of  the  tax  as  it  finds  actually  due.  In  so  deter- 
mining the  amount  due  and  reducing  the  amount  assessed  the 
State  Court  does  not  assume  the  legislative  function  of  making 
an  assessment,  made  by  the  assessor  under  color  of  legislative 
authority  .^^ 

The  mere  lack  of  a  provision  in  a  tax  law  for  notice  does  not 
take  away  the  jurisdiction  of  the  taxing  officer  to  make  an 
assessment  under  any  circumstances.  If  the  tax  could  be 
imposed  for  a  certain  amount  it  is  not  void,  but  at  most  void- 
able for  the  illegal  amount,  if  any.^^  If  a  State  has  not  the 
power  to  levy  a  tax  it  will  not  be  sustained  merely  because 
another  tax  which  it  might  lawfully  impose  would  have  the 
same  ultimate  incidence.^ 

§  68.  Taxation — Obligation  of  Contract — Equal  Protec- 
tion of  Law — Due  Process  of  Law. 

A  State  taxing  law  may  be  operative  as  to  a  savings  bank  and 

21  Delaware  Railroad  Tax,  18  Wall.  (85  U.  S.)  206,  21  L.  ed.  888. 

22  Security  Trust  Co.  v.  Lexington,  203  U.  S.  323,  27  Sup.  Ct.  87,  51  L. 
ed.  204. 

23  People's  Nat.  Bank  v.  Marye,  191  U.  S.  272,  24  Sup.  Ct.  68,  48  L.  ed.  180. 

24  Home  Savings  Bank  v.  Des  Moines,  205  U.  S.  503,  51  L.  ed.  901,  27  Sup. 
Ct.  571. 

125 


§  68      CONSTITUTIONAL    BASIS  OF   ACTIONS    AND    DEFENSES 

not  violate  the  contract  clause  of  the  Federal  Constitution 
where  such  bank  is  unprotected  by  the  creation  of  an  irrevo- 
cable contract  on  the  part  of  the  State .^^  A  bank  charter  may 
limit  the  amount  of  tax  on  shares  of  stock  in  stockholders'  hands 
so  that  any  subsequent  imposition  of  an  additional  tax  will 
imi)air  the  obligation  of  contract  and  be  void.-^  Where  the 
charter  of  a  bank,  granted  by  the  legislature  of  Tennessee, 
provided,  that  the  bank  "shall  pay  to  the  State  an  annual  tax 
of  one-half  of  one  per  cent  on  each  share  of  the  capital  stock 
subscribed,  which  shall  be  in  lieu  of  all  other  taxes,"  it  was  held 

(1)  That  this  provision  was  a  contract  between  the  State  and 
the  bank,  limiting  the  amount  of  tax  on  each  share  of  the  stock. 

(2)  That  a  subsequent  revenue  law  of  the  State,  imposing  an 
additional  tax  on  the  shares  in  the  hands  of  stockholders,  im- 
paired the  obligation  of  that  contract,  and  was  void.^^  The 
mere  grant  for  a  designated  time  of  an  immunity  from  taxa- 
tion does  not  take  it  out  of  the  rule  subjecting  such  grant  to 
the  general  law  retaining  the  power  to  amend  or  repeal,  unless 
the  granting  act  contains  an  express  provision  to  that  effect.^* 
A  tax  of  two  cents  a  share  imposed  on  transfers  of  stock,  made 
within  a  State  by  a  tax  law  does  not  violate  the  equal  protection 
clause  of  the  Fourteenth  Amendment  as  an  arbitrary  discrimi- 
nation because  only  imposed  upon  transfers  or  stock,  or  because 
based  on  par,  and  not  market  value;  nor  does  it  deprive  non- 
25  Citizens'  Savings  Bank  v.  Owensboro,  173  U.  S.  636,  43  L.  ed.  840,  lU 

Sup.  Ct.  530,  571.  In  this  case  the  act  of  Ky.  of  Feb.  14,  1856,  and  the  act 
of  May  12,  1884,  chap.  1412,  incorporating  tlie  Savings  Bank  and  the  act  of 
May  17,  1886,  known  as  the  Hewitt  Act  and  other  statutes  were  held  not  to 
create  an  irrevocable  contract  and  that  the  Kentucky  taxing  law  of  Nov.  11, 
1892,  chap.  108,  did  not  violate  such  obligation  clause.  See  Kentucky  Bank 
Cases,  174  U.  S.  408,  43  L.  ed.  1027,  19  Sup.  Ct.  880  (there  were  twenty-six 
of  these  cases — five  decided  in  1899— five  affirmed  by  a  divided  court  in  1899). 
28  Bank  of  Commerce  v.  Tennessee,  161  U.  S.  134,  16  Sup.  Ct.  456,  40  L. 
ed.  645. 

27  Farrington  v.  Tennessee,  95  U.  S.  679,  24  L.  ed.  558. 

28  Citizens'  Savings  Bank  v.  Owensboro,  173  U.  S.  636,  43  L.  ed.  840,  19 
Sup.  Ct.  530,  571.  See  Kentucky  Bank  Cases,  174  U.  S.  408,  43  L.  ed.  1027, 
19  Sup.  Ct.  880  (there  were  twenty-six  of  these  cases — five  decided  in  1899 
and  five  affirmed  by  a  divided  court  in  1899).  Examine  Citizens'  Bank  v. 
Parker,  192  U.  S.  73,  48  L.  ed.  346,  42  Sup.  Ct.  181. 

126 


i'i';i)i;uAi.  AcjKNCJiort — taxation  §  08 

ivsiclciit  owners  of  stock  transferring  in  the  State  of  such 
•statutory  enactment,  shares  of  nonresident  corporations  of 
their  property  without  due  process  of  law;  nor  is  it  as  to  such 
transfers  of  stock  an  interference  with  interstate  cominercc.^^ 
Where  a  State  law  for  the  valuation  of  property  and  the  assess- 
ment of  taxes  thereon,  provides  for  the  classification  of  property 
subject  to  its  provisions  into  different  classes,  and  makes  for 
one  class  one  set  of  provisions  as  to  modes  and  methods  of 
ascertaining  the  value,  and  as  to  right  of  appeal,  and  different 
provisions  for  another  class  as  to  those  subjects,  but  which 
provides  for  the  impartial  application  of  the  same  means  and 
methods  to  all  constituents  of  each  class,  so  that  the  law  shall 
operate  equally  and  uniformly  on  all  persons  in  similar  circum- 
stances, it  denies  to  no  person  affected  by  it  "equal  protection 
of  the  laws,"  within  the  meaning  of  the  Fourteenth  Amendment 
to  the  Constitution  of  the  United  States.^" 

A  State  statute  for  raising  public  revenue  by  the  assessment 
and  collection  of  taxes,  which  gives  notice  of  the  proposed 
assessment  to  an  owner  of  property  to  be  affected,  by  requiring 
him  at  a  time  named  to  present  a  statement  of  his  property, 
with  his  estimate  of  its  value,  to  a  designated  official  charged 
with  the  duty  of  receiving  the  statement;  which  fixes  time  and 
place  for  public  sessions  of  other  officials,  at  which  this  state- 
ment and  estimate  are  to  be  considered,  where  the  official 
valuation  is  to  be  made,  and  when  and  where  the  party  inter- 
ested has  the  right  to  be  present  and  to  be  heard;  and  which 
affords  him  opportunity,  in  a  suit  at  law,  for  the  collection  of 
the  tax,  to  judicially  contest  the  validity  of  the  proceeding, 
does  not  necessarily  deprive  him  of  his  property  "  without  due 
process  of  law, "  within  the  meaning  of  the  Fourteenth  Amend- 
ment to  the  Constitution  of  the  United  States .^^    The  power  of 

29  Hatch  V.  Reardon,  204  U.  S.  152,  51  L.  ed.  415,  27  Sup.  Ct.  188,  aff'g 
184  N.  Y.  431. 

30  Kentucky  Railroad  Tax  Cases  (Cincinnati,  New  Orleans  &  Texas  Pac. 
Rd.  Co.  V.  Kentucky),  105  U.  S.  321,  29  L.  ed.  414,  6  Sup.  Ct.  57. 

31  Kentucky  Railroad  Tax  Cases  (C'incinnati,  New  Orleans  &  Texas  Pac. 
Rd.  Co.  V.  Kentucky),  105  U.  8.  321,  29  L.  ed.  414,  G  Sup.  Ct.  57. 

Tax  law  of  New  York  imposing  taxes  on  certain  public  franchises  held  not 

127 


§  69      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

taxation  conferred  by  law  enters  into  the  obligation  of  a  con- 
tract, and  subsequent  legislation  withdrawing  or  lessening  such 
power  and  which  leaves  creditors  without  adequate  means  of 
satisfaction  impairs  the  obligation  of  their  contracts^  Other 
decisions  as  to  taxation  and  the  obligation  of  contract,  equal 
protection  of  the  laws  and  due  process  of  law  clauses  appear 
under  the  next  following  sections. 

§  69.  Taxation— Exemptions— Instrumentalities  of  Fed- 
eral Government— State  Agencies. 

The  State  governments  have  no  right  to  tax  any  of  the 
constitutional  means  employed  by  the  Government  of  the  Union 
to  execute  its  constitutional  powers;  nor  have  they  any  power, 
l)y  taxation  or  otherwise,  to  retard,  impede,  burden  or  in  any 
manner  control  the  operations  of  the  constitutional  laws 
enacted  by  Congress  to  carry  into  effect  the  powers  vested  in 
the  National  Government.  A  tax  therefore  on  the  operation  of 
an  instrument,  such  as  a  branch  of  a  bank  incorporated  by  an 
act  of  Congress,  employed  by  the  Government  of  the  United 
States  to  carry  its  powers  into  execution  is  unconstitutional. 
The  above  principle  does  not  extend  to  a  tax  paid  by  the  real 
property  of  such  bank,  in  common  with  other  real  property  in 
a  particular  State,  nor  to  a  tax  imposed  upon  the  proprietary 
interest  which  the  citizens  in  that  State  may  hold  in  that 
institution  in  common  with  other  property  of  the  same  descrip- 
tion throughout  the  State.^^  This  doctrine  is  substantially 
reasserted  in  a  case  which  holds  that  although  all  subjects 
over  which  the  power  of  a  State  extends  are,  as  a  general  rule, 
proper  subjects  of  taxation,  yet  the  power  of  a  State  to  tax  does 
not  extend  to  those  means  which  are  employed  by  Congress 

repugnant,  with  respect  to  the  case  before  it,  to  the  equal  protection,  due 
process,  or  impairment  of  obligation  of  clauses  of  the  Federal  Constitution 
and  of  the  Fourteenth  Amendment  thereto.  Metropolitan  St.  Ry.  Co.  v. 
New  York  State  Board  of  Tax  Comm'rs,  199  U.  S.  1,  50  L.  ed.  65,  25  Sup. 
Ct.  23. 

32  Hubert  v.  New  Orleans,  215  U.  S.  170,  54  L.  ed.  — ,  30  Sup.  Ct.  — ,  rev'g 
119  La.  623. 

33  McCuUoch  V.  Maryland,  4  Wheat.  (17  U.  S.)  316,  436,  4  L.  ed.  579. 

128 


FEDERAL  AGENCIES — TAXATION  §  70 

to  carry  into  execution  the  powers  conferred  in  the  Federal 
Constitution.  "Un(iuestionably  the  taxing  power  of  the  States 
is  very  conij)rehensive,  but  it  is  not  without  its  limits.  State 
tax  laws  cannot  restrain  the  action  of  the  national  government, 
nor  can  they  abridge  the  operation  of  any  law  which  Congress 
may  constitutionally  pass.  They  may  extend  to  every  object 
of  value  within  the  sovereignty  of  the  State,  but  they  cannot 
reach  the  administration  of  justice  in  the  Federal  Courts,  nor 
the  collection  of  public  revenue,  nor  interfere  with  any  con- 
stitutional regulation  of  Congress.^  The  true  reason  for  the 
rule  is  that  the  Constitution  of  the  United  States  and  the  laws 
of  Congress  made  in  pursuance  thereof  are  the  supreme  law  of 
the  land,  and  the  express  provision  is  that  the  judges  in  every 
State  Court  shall  be  bound  thereby,  anything  in  the  Constitution 
or  laws  of  any  State  to  the  contrary  notwithstanding."  ^^ 

The  exemption  of  State  agencies  and  instrumentalities  from 
national  taxation  is  limited  to  those  which  are  of  a  strictly 
governmental  character,  and  does  not  extend  to  those  used  by 
the  State  in  carrying  on  an  ordinary  private  business,  such  as 
the  control  of  the  sale  of  intoxicating  liquors  by  the  dispensary 
system  .^^  And  the  principle  that  the  States  cannot  tax  official 
agencies  of  the  Federal  Government  does  not  apply  to  obli- 
gations such  as  checks  and  warrants  available  for  immediate 
use,  A  tax  upon  them  is  virtually  a  tax  upon  the  money  which 
can  be  drawn  upon  their  present  action.^'' 

§  70.  Taxation — Instrumentalities  of  Federal  Govern- 
ment— Qualification  or  Limitation  of  Doctrine  of  Exemption. 

The  doctrine  which  exempts  the  instrumentalities  of  the 

31  Citing  Brown  v.  State  of  Maryland,  12  Wheat.  (25  U.  S.)  419,  44S,  6 
L.  ed.  678;  Weston  v.  City  Council  of  Charleston,  12  Wheat.  (27  U.  S.)  449, 
467,  7L.  ed.  4S1. 

35  Society  for  Savings  v.  Coite,  6  Wall.  (73  U.  S.)  594,  605,  18  L.  ed.  897, 
per  Mr.  Justice  Clifford,  citing  Const.,  Art.  VI. 

38  South  CaroHna  v.  United  States,  190  U.  S.  437,  47  L.  ed.  1126,  23  Sup. 
Ct.  811. 

37  Hibemia  Savings  &  Loan  Society  v.  San  Francisco,  200  U.  S.  310,  50 
L.  ed.  495,  26  Sup.  Ct.  265. 

9  129 


§  71       CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES— 

Federal  Government  from  the  influence  of  State  legislation,  is 
not  founded  on  any  express  provision  of  the  Constitution,  but 
in  the  inijjlied  necessity  for  the  use  of  such  instruments  by  the 
Federal  Government.  It  is,  therefore,  limited  by  the  principle 
that  State  legislation,  which  does  not  impair  the  usefulness  or 
capability  of  such  instruments  to  serve  the  Government,  is  not 
within  the  rule  of  prohibition.^*  An  exemption  of  agencies  of 
the  Federal  Government  from  taxation  by  the  States  is  depend- 
ent, not  upon  the  nature  of  the  agents,  nor  upon  the  mode  of 
their  Constitution,  nor  upon  the  fact  that  they  are  agents,  but 
upon  the  effect  of  the  tax;  that  is,  upon  the  question  whether 
the  tax  does  in  truth  deprive  them  of  the  power  to  serve  the 
Government  as  they  were  intended  to  serve  it,  or  hinder  the 
efficient  exercise  of  their  power.  A  tax  upon  their  property 
merely,  having  no  such  necessary  effect,  and  leaving  them  free 
to  discharge  the  duties  they  have  undertaken  to  perform,  may 
be  rightfully  laid  by  the  States.  A  tax  upon  their  operations 
being  a  direct  obstruction  to  the  exercise  of  Federal  powers 
may  not  be.^^ 

§  71.  Taxation — National  Banks. 

A  State  cannot  tax  the  banks  of  the  United  States.'^" 
A  State  is  wholly  without  power  to  levy  any  tax,  either  direct 
or  indirect,  upon  national  banks,  their  property,  assets  or 
franchises,  except  when  permitted  so  to  do  by  the  legislation  of 
Congress.  Section  5219  of  the  Revised  Statutes  is  the  measure 
of  the  power  of  States  to  tax  national  banks,  their  property  or 
their  franchises,  that  power  being  confined  to  a  taxation  of  the 
shares  of  stock  in  the  names  of  the  shareholders,  and  to  an  as- 
sessment of  the  real  estate  of  the  bank.  And  where  the  fact 
complained  of,  was  of  having  been  assessed  on  the  franchises  or 
intangible  property  of  the  corporation,  it  was  held  not  within 

38  National  Bank  v.  Commonwealth,  9  Wall.  (76  U.  S.)  353,  19  L.  ed.  701. 

S9  Railroad  Co.  v.  Peniston,  18  Wall.  (85  U.  S.)  5,  21  L.  ed.  787,  followed 
in  Central  Pac.  Rd.  Co.  v.  California,  162  U.  S.  91,  16  Sup.  Ct.  766,  40  L.  ed. 
903. 

*o  Osborn  v.  United  States  Bank,  9  Wheat.  (22  U.  S.)  738,  6  L.  ed.  204. 
130 


P^DEHAL    AHRXriEwS — TAXATION  §71 

th(!  j)urvicw  of  tho  authority  conferred  by  the  act  of  T'ongress, 
and  was  therefore  illegal.''^ 

Wiiilc  a  State  may  only  tax  shares  of  a  national  bank  in 
accordance  with  the  Federal  statute,  a  State  law,  which  does 
not  give  th(>  sliareholdors  the  benefit  of  all  deductions  to  which 
they  are  entitled  is  not  necessarily  void  altogether,  but  may  he 
sustained  as  to  the  amount  properly  taxable.^^  Money  invested 
in  corporations  or  in  industrial  enterprises  that  carry  or  th:^ 
business  of  railroads,   of   manufacturing  enterprises,   mining 

«  Owensboro  Nat.  Bank  v.  Owensboro,  173  U.  S.  664,  43  L.  ed.  850,  I'J 
Sup.  Ct.  537,  cited  and  quoted  from  in  Home  Savings  Bank  v.  Des  Moines, 
205  U.  S.  503,  51  L.  ed.  901,  27  Sup.  Ct.  571,  where  the  court,  per  Mr.  Jus- 
tice Moodj^,  says:  "There  it  appeared  that  a  tax  upon  the  intangible  property 
of  a  national  bank  had  been  levied  untler  the  name  of  a  franchise  tax.  Such 
a  tax  upon  one  of  the  agencies  of  the  National  Government  is  beyond  the 
power  of  the  State.  But  it  was  contended  that  although  the  tax  was  not  in 
form  upon  shares  in  the  hands  of  shareholders  (a  tax  lawful  by  the  permis- 
sion Congress  has  given),  it  was  the  equivalent  of  such  a  tax.  To  this  con- 
tention the  court,  by  Mr.  Justice  White,  replied:  'To  be  equivalent  in  law 
involves  the  proposition  that  a  tax  on  the  franchise  and  property  of  a  bank 
or  corporation  is  the  equivalent  of  a  tax  on  the  shares  of  stock  in  the  names 
of  the  shareholders.  But  this  proposition  has  been  frequently  denied  by 
this  court,  as  to  national  banks,  and  has  been  overruled  to  such  an  extent 
in  many  other  cases  relating  to  exemptions  from  taxation,  or  to  the  power 
of  the  State  to  tax,  that  to  maintain  it  now  would  have  the  effect  to  anni- 
hilate the  authority  to  tax  in  a  multitude  of  cases,  and  as  to  vast  sums  of 
property  upon  which  the  taxing  power  is  exerted  in  virtue  of  the  decision 
of  this  court  liolding  that  a  tax  on  a  corporation  or  its  property  is  not  the 
legal  equivalent  of  a  tax  on  the  stock,  in  the  name  of  the  stockholders.  *  *  * 
If  the  mere  coincidence  of  the  sum  of  the  taxation  is  to  be  allowed  to  frus- 
trate the  provisions  of  the  act  of  Congress,  then  that  act  becomes  meaning- 
less and  the  power  to  enforce  it  in  any  given  case  will  not  exist.  *  *  * 
The  argument  that  public  poHcy  exacts  that  where  there  is  an  equality  in 
amount  between  an  unlawful  tax  and  a  lawful  one,  the  unlawful  tax  should 
be  held  valid,  does  not  strike  us  as  worthy  of  serious  consideration.'  These 
words  apply  with  equal  force  to  the  case  at  bar." 

See  further  as  to  State  taxation  of  national  banks,  Cummings  v.  National 
Bk.,  101  U.  S.  153,  25  L.  ed.  903  (State  Constitution;  uniformity  of  taxa- 
tion; bank  shares;  equalization  board;  unequal  valuation;  different  classes 
of  property;  injunction);  Lionberger  v.  Rouse,  9  Wall.  (76  U.  S.)  468,  19 
I.,  ed.  721  (tax  on  shares;  uniform  assessment;  meaning  of  forty-first  section 
of  National  Banking  Act). 

<2  People's  Nat.  Bank  v.  Marve,  191  U.  S.  272,  24  Sup.  Ct.  68   48  L   ed 
180. 

131 


§  72      CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

investments  and  investments  in  mortgages,  does  not  come  into 
competition  with  the  business  of  national  banks,  and  is,  there- 
fore, not  within  the  meaning  of  that  provision  of  the  Federal 
statutes,^^  which  forbids  the  taxation  of  its  shares  at  a  greater 
rate  than  is  assessed  upon  other  moneyed  capital  in  the  hands 
of  citizens  of  the  State.  So  insurance  stocks  may  be  taxed  on 
income  instead  of  value,  and  deposits  in  savings  banks  and 
moneys  belonging  to  charitable  institutions  may  be  exempted 
without  infringing  upon  the  above  statutory  provision.^'* 

A  difference  in  methods  of  assessing  shares  of  national  banks 
from  that  of  taxing  State  banks  does  not  necessarily  amount 
to  a  discrimination,  rendering  the  act  invalid  ^  and  justify  the 
judicial  interference  of  courts  for  the  protection  of  the  share- 
holders, unless  it  appears  that  the  difference  in  method  actually 
results  in  imposing  a  greater  burden  on  the  national  banks  than 
is  imposed  on  other  moneyed  capital  in  the  State .^  A  State 
statute  may,  for  the  purposes  of  taxation,  require,  under 
penalty  for  his  neglect  or  refusal,  the  cashier  of  each  national 
bank  within  the  State  to  transmit,  on  or  before  a  specified  day 
in  a  certain  month  in  each  year,  to  the  clerks  of  the  several 
towns  in  the  State  in  which  any  stock  or  shareholders  of  such 
bank  shall  reside,  a  true  list  of  the  names  of  such  stock  or 
shareholders  on  the  books  of  such  bank,  together  with  the 
amount  of  money  actually  paid  in  on  each  share  on  the  first 
day  of  the  month  on  which  said  report  is  to  be  transmitted.^^ 

§  72.  Taxation — Savings  Banks — Obligations,  Securities, 
Bonds,  Stocks,  Notes,  etc.,  of  United  States. 

It  is  certain  that  there  is  a  want  of  authority  in  the  States 

43  Rev.  Stat.  U.  S.,  §  5219. 

«  Aberdeen  Bank  v.  Chehalis  Co.,  166  U.  S.  440,  41  L.  ed.  1069,  17  Sup. 
Ct.  629,  affirmed,  followed  and  applied  in  Bank  of  Commerce  v.  Seattle,  166 
U.  S.  463,  42  L.  ed.  1079,  17  Sup.  Ct.  618. 

45  Under  §  5219. 

46  Covington  v.  First  National  Bank  of  Covington,  198  U.  S.  100,  49  L. 
ed.  963,  25  Sup.  Ct.  562. 

As  to  taxation  of  national  banks  and  shares  therein,  assessment  and  dis- 
crimination and  claim  of  violation  of  rights  under  §  5219,  U.  S.  Rev.  Stat., 
see  Lander  v.  Mercantile  Bank.  186  U.  S.  458,  46  L.  ed.  1247,  22  Sup.  Ct.  908. 

47  Waite  V.  Dowley,  94  U.  S.  527,  533,  24  L.  ed.  181. 

132 


FEDERAL  AGENCIES — TAXATION  §  72 

to  tax  securities  of  the  United  States  issued  in  the  exercise  of 
the  admitted  power  of  Congress  to  borrow  money  on  the  credit  of 
the  United  States,  even  though  there  is  no  express  prohibition 
in  the  Constitution  to  that  effect.  Outside  of  those  provisions, 
however,  the  power  of  the  State  to  tax  extends  to  all  objects 
except  the  instruments  and  means  of  the  Federal  Government 
within  the  sovereign  power  of  the  State."*®  So  the  last  clause 
of  §  3408  of  the  Revised  Statutes  of  the  United  States  ex- 
empts savings  banks  of  the  character  there  mentioned  from 
taxation  of  so  much  of  their  deposits  as  they  have  invested  in 
securities  of  the  United  States,  and  on  all  sums  which  they 
have  on  deposit  in  the  name  of  any  one  person,  not  exceeding 
two  thousand  dollars;  and  the  act  of  1879  does  not  change  the 
effect  of  that  clause."*^  A  State  has  no  power  to  burden,  impede 
or  in  any  way  affect  by  its  action  the  power  conferred  upon  the 
Government  to  borrow  money  on  the  credit  of  the  United 
States.  It  cannot  by  any  form  of  taxation  impose  any  burden 
upon  any  part  of  the  national  public  debt;  and  it  may  well  be 
doubted  whether  Congress  has  the  power  to  confer  upon  the 
States  the  right  to  tax  obligations  of  the  United  States;  Congress, 
however,  has  never  yet  attempted  to  confer  such  a  right.  So  a 
tax  upon  the  property  of  a  bank  in  which  United  States  secur- 
ities are  included  is  beyond  the  power  of  the  State,  and  is  also 
witliin  the  prohibition  of  the  acts  of  Congress.''^  While  a  tax 
on  an  individual  in  respect  to  his  shares  in  a  corporation  is  not 
a  tax  on  the  corporation,  and  the  value  of  the  shares  may  be 
assessed  without  regard  to  the  fact  that  the  assets  of  the 
corporation  include  government  securities,  if  the  tax  is  actually 

«  Hamilton  Company  v.  Massachusetts,  6  Wall.  (73  U.  S.)  632,  639,  18 
L.  ed.  904,  per  Mr.  Justice  Clifford. 

"Savings  Bank  v.  Archbold,  104  U.  S.  708,  26  L.  ed.  901,  §  3408,  Rev. 
Stat.  U.  S.,  legislated  in  the  above  matter  as  to  "associations  or  companies 
known  as  provident  institutions,  savings-banks,  savings-funds,  or  savings- 
institutions,  having  no  capital  stock  and  doing  no  other  business  than  re- 
ceiving deposits  to  be  loaned  or  invested  for  the  sole  benefit  of  the  parties 
making  such  deposits  without  profit  or  compensation  to  the  association  or 
company."  See  Comp.  Stat.  U.  S.,  1901,  p.  2247,  as  to  what  parts  of  this 
section  are  superseded,  etc.    See  also  Comp.  Stat.  U.  S.,  1907,  p.  643. 

^  Rev.  Stat.,  §  3701  and  other  acts. 

133 


§  73      CONSTITUTIONAL  BASIS  OF  ACTIONS  AND  DEFENSES — 

on  the  corporation  although  nominally  on  the  shares  such 
securities  ma}^  not  be  included  in  assessing  the  value  of  the 
shares  for  taxation.  So  where  the  substantial  effect  of  a  State 
Code,  providing  that  shares  of  stock  of  a  State  and  savings 
banks  and  loan  and  trust  companies  shall  be  assessed  to  such 
banks  and  companies  and  not  to  the  individual  stockholders, 
and  that  in  fixing  the  value  of  the  shares,  capital,  surplus  and 
undivided  earnings  shall  be  taken  into  account,  is  to  tax  the 
propert}^  of  the  bank  and  not  the  shares  of  stock,  an  assessment 
which  includes  government  bonds  owned  by  the  bank  in  fixing 
the  valuation  of  its  shares  is  illegal  and  beyond  the  power  of  the 
State." 

§  73.  Same  Subject. 

A  State  statute  may  tax  bank  stocks  by  levying  a  tax  on  the 
shares  of  the  stockholders  as  distinguished  from  the  capital  of 
the  bank  invested  in  Federal  securities,  even  though  the  tax  is 
collected  from  the  bank  instead  of  the  individual  stockholders.^' 
Again,  stock  of  the  United  States  is  not  subject  to  taxation 
under  the  laws  of  a  State,  and  such  law  for  that  purpose  is 
unconstitutional  whether  it  imposes  a  tax  eo  nomine  or  includes 
it  in  the  aggregate  of  the  taxpayer's  property  to  be  valued  like 
the  rest  at  its  worth,  and  that  portion  of  the  capital  which  a  bank 
has  invested  in  the  stocks,  bonds  or  other  securities  of  the 
United  States  is  not  liable  to  taxation.  A  State  tax  on  the 
loans  of  the  Federal  Government  is  a  restriction  upon  the  con- 
stitutional power  of  the  United  States  to  borrow  money,  and 
if  the  States  had  such  a  right,  being  in  its  nature  unlimited,  it 
might  be  used  to  defeat  the  Federal  power  altogether.^^    So  a 

51  Home  Savings  Bank  v.  Des  Moines,  205  U.  S.  503,  51  L.  ed.  901,  27 
Sup.  Ct.  571.  "This  principle  was  announced  in  Weston  v.  Charleston,  2 
Pet.  (27  U.  S.)  449,  7  L.  ed.  481,  where  it  was  held  that  taxes  upon  the  stock 
of  the  United  States  levied  by  one  of  the  municipal  corporations  of  South 
Carohna  were  invalid.  From  that  time  no  one  has  questioned  the  immu- 
nity of  national  securities  from  State  taxation."  Id.,  513,  per  Mr.  Justice 
Moody. 

62  National  Bank  v.  Commonwealth,  9  Wall.  (76  U.  S.)  353,  19  L.  ed.  701. 

63  Bank  of  Commerce  v.  New  York,  2  Black  (67  U.  S.),  620,  17  L.  ed.  451. 

134 


FEDERAL    A(JKNCIES TAXATION  §  74 

tax  laid  by  a  State  on  banks  on  a  valuation  equal  to  the  amount 
of  their  capital  stock  paid  in,  or  secured  to  be  paid  in,  is  a  tax 
on  the  proi)erty  of  the  institution;  and  when  that  property 
consists  of  stocks  of  the  Federal  Government,  the  law  laying  the 
tax  is  void.'^''  Nor  can  any  tax  be  imposed  by  a  State  law  or 
under  the  authority  thereof  upon  stock  issued  for  loans  made  to 
the  United  States,  as  such  a  law  would  be  unconstitutional.^'^ 
So  under  a  decision  rendered  in  1868  United  States  notes  issued 
under  the  Loan  and  Currency  Acts  of  1862  and  1863  intended  to 
circulate  as  money  and  actually  constituting,  with  the  national 
bank  notes,  the  ordinary  circulating  medium  of  the  country,  are 
obligations  of  the  National  Government  and  exempt  from  State 
taxation.^*'  "The  principle  is,  that  the  States  cannot  control 
the  National  Government  within  the  sphere  of  its  constitutional 
powers — for  there  it  is  supreme — and  cannot  tax  its  obligations 
for  payment  of  money  issued  for  purposes  within  that  range  of 
powers,  because  such  taxation  necessarily  implies  the  assertion 
of  the  right  to  exercise  such  control."  ^^  Certificates  of  indebted- 
ness issued  by  the  United  States  to  creditors  of  the  Government 
for  supplies  furnished  to  it  in  carrying  on  the  Civil  War  and  by 
which  the  Government  promised  to  pay  the  sums  of  money 
specified  in  them,  with  interest,  at  a  time  named  are  beyond  the 
taxing  power  of  the  State  .^* 

§  74.  Same  Subject — When  Tax  Is  on  Franchises. 

A  State  may,  however,  impose  by  statute  a  tax  upon  the 
corporate  franchise  or  business  of  all  corporations  incorporated 
under  any  law  of  the  State,  or  of  any  other  State  or  country, 
and  doing  business  within  the  State,  where  such  tax  is  measured 
liy  the  extent  of  the  dividends  of  the  corporation  in  the  current 
year,  as  the  tax  is  one  upon  the  right  or  privilege  to  be  a 
corporation  and  to  do  business  in  the  State  in  a  corporate 

5*  Bank  Tax  Case,  2  Wall.  (69  U.  S.)  200,  17  L.  ed.  793. 

65  Weston  V.  Charleston,  2  Pet.  (27  U.  S.)  449,  7  L.  ed.  481. 

58  Bank  v.  Supervisors,  7  Wall.  (74  U.  S.)  26,  19  L.  ed.  60. 

57  Banks,  The,  v.  The  Mayor,  7  Wall.  (74  U.  S.)  16,  25,  19  L.  ed.  57. 

5s  Banks,  The,  v.  The  Mayor,  7  Wall.  (74  U.  S.)  16,  19  L.  ed.  57. 

13') 


§  74     CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

capacity,  and  differs  from  a  tax  upon  the  jji-ivilego  or  franchise 
which  when  incorporated  the  company  may  exercise,  nor  does 
the  statute  being  thus  construed,  by  its  imposition  of  a  tax  upon 
the  dividends  of  the  company,  violate  the  provision  of  the  act  of 
Congress  exempting  bonds  of  the  United  States  from  taxation, 
although  a  portion  of  the  dividends  may  be  derived  from  interest 
on  capital  invested  in  such  bonds.  The  validity  of  a  State  tax 
upon  corporations  created  under  its  laws,  or  doing  business 
within  its  territory,  can  in  no  way  be  dependent  upon  the  mode 
which  the  State  may  deem  fit  to  adopt  in  fixing  the  amount  for 
any  year  which  it  will  exact  for  the  franchise.^*'  Again,  a  statute 
of  a  State  requiring  savings  societies  authorized  to  receive 
deposits,  but  without  authority  to  issue  bills,  and  having  no 
capital  stock,  to  pay  annually  into  the  State  treasury  a  sum 
equal  to  three-fourths  of  one  per  cent  on  the  total  amount  of 
their  deposits  on  a  given  day,  imposes  a  franchise  tax,  not  a  tax 
on  property,  and  is  valid,  and  the  fact  that  a  franchise  tax  and 
not  a  tax  on  property  has  been  imposed  on  a  savings  society 
which  has  invested  a  part  of  its  deposits  in  securities  of  the 
United  States,  declared  by  Congress,  in  the  act  which  authorizes 
their  issue,  to  be  exempt  from  taxation  by  State  authority,  does 
not  exempt  the  society  from  taxation  to  the  extent  of  deposits  so 
invested.^"  So  a  State  statute  which  enacts  that  every  institu- 
tion for  savings,  incorporated  under  the  law  of  the  State,  shall 
pay  to  the  commonwealth  a  tax  on  account  of  its  depositors  of  a 
certain  percentage  on  the  amount  of  its  deposits,  to  be  assessed, 
one-half  of  said  annual  tax  on  the  average  amount  of  its  deposits 
for  six  months  preceding  certain  dates  in  the  year,  imposes  a 
franchise  tax,  not  a  tax  on  property,  and  is  valid.  A  savings 
institution,  therefore,  in  such  State,  having  a  portion  of  its 
deposits  invested  in  Federal  securities,  declared  by  the  act  of 
Congress  authorizing  their  issue  to  be  exempt  from  State  tax- 
ation, is  as  liable  under  the  above  statute  to  a  tax  on  account 
of  such  deposits  as  on  account  of  others,  and  it  is  held  that  there 

59  Home  Insurance  Co.  v.  New  York,  134  U.  S.  594,  .33  L.  ed.  1025,  10 
Sup.  Ct.  .593,  119  U.  S.  129,  30  L.  ed.  350,  8  Sup.  Ct.  1.385. 

60  Society  for  Savings  v.  Coite,  6  Wall.  (73  U.  S.)  594,  18  L.  ed.  897. 

136 


FEDERAL  AGENCIES — TAXATION  §  75 

is  nothing  inconsistent  with  the  view,  as  to  the  validity  of  the 
tax,  in  the  decisions  of  the  Federal  Supreme  Court.^^ 

§  75.  Taxation — Franchises   or   Privileges   Conferred   by 
Congress — Railroads — Telegraph    Companies. 

A  State  board  of  o(iualizatiou  has  no  power  to  include  in  its 
assessment  franchises  conferred  by  Congress,  as  such  franchises 
cannot  be  taxed  by  the  State;  and  the  assessment  is  repugnant 
to  the  Constitution  and  laws  of  the  United  States,  and  the 
power  given  to  Congress  to  regulate  commerce  among  the 
several  States.^^  But  the  fact  that  a  railroad  company  is  a 
corporation  organized  under  a  statute  of  the  United  States  with 
power  thereunder  to  charge  and  collect  tolls  and  rates  for 
transportation  does  not  exempt  it  from  the  operation  of  a 
statute  establishing  a  railroad  commission  as  to  business  done 
wholly  within  the  State;  but  such  business  is  subject  to  the 
control  of  the  State  in  all  matters  of  taxation,  rates  and  other 
police  regulations.^^  So  the  property  of  a  railroad  corporation  of 
the  United  States  may  be  taxed  by  a  State  but  not  through  its 
franchises.^  Again,  the  privilege  conferred  upon  telegraph  com- 
panies by  Congress  ^^  carries  with  it  no  exemption  from  the  ordi- 
nary burdens  of  taxation  in  a  State  within  which  they  may  own 
and  operate  lines  of  telegraph,  and  the  State  may  tax  such  com- 
pany upon  the  property  owned  and  used  by  it  within  its  limits 
by  what  is  essentially  an  excise  tax  where  such  tax  is  not  for- 
bidden by  the  commerce  clause  of  the  Constitution.^^    While  a 

«  Provident  Institution  v.  Massachusetts,  6  Wall.  (73  U.  S.)  612,  18  L. 
ed.  907. 

«  California  v.  Central  Pacific  Rd.  Co.,  127  U.  S.  1,  32  L,  ed.  150,  8  Sup. 
Ct.  1053. 

<B  Reagan  v.  Mercantile  Trust  Co.,  154  U.  S.  413,  14  Sup.  Ct.  1060,  3S  L. 
ed.  1028,  affirming,  following  and  applying  in  this  case  the  facts  in  Reagan  v. 
Farmers'  Loan  &  Trust  Co.,  154  U.  S.  .362,  .38  L.  ed.  1014,  14  Sup.  Ct.  1047. 

w  Central  Pacific  Rd.  Co.  v.  California,  162  U.  S.  91,  40  L.  ed.  903,  16 
Sup.  Ct.  766;  California  v.  Central  Pacific  Rd.  Co.,  127  U.  S.  1,  32  L.  ed.  150, 
8Sup.  Ct.  1053. 

<»  Under  Rev.  Stat.,  §  5263;  see  Joyce  on  Electric  Law  (2d  ed.),  §§  51- 
52a. 

08  Western  Union  Teleg.  Co.  v.  Massachusetts,  125  U.  S.  5.30,  8  Sup.  Ct. 

137 


§  76    CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES — 

State  cannot  exclude  from  it.s  liniiis  a  corporation  engaged  in  in- 
terstate or  foreign  commerce,  or  a  corporation  in  the  employ- 
ment of  the  General  Government,  by  the  imposition  of  un- 
reasonable conditions,  it  may  subject  it  to  a  property  taxation 
incidentally  affecting  its  occupation  in  the  same  way  that  busi- 
ness of  individuals  or  other  corporations  is  affected  by  common 
governmental  burdens.^^ 

§  76.  Taxation — Railroads. 

The  power  of  a  State  to  construct  railroads  and  other  high- 
ways, and  to  impose  tolls,  fare,  or  freight  for  transportation 
thereon,  is  unlimited  and  uncontrolled.  The  disposition  of  the 
revenues  thus  derived  is  subject  to  its  own  discretion.  But  a 
State  cannot  impose  a  tax  on  the  movement  of  persons  or 
property  from  one  State  to  another.^*  A  legislative  and  con- 
stitutional provision  of  a  State  that  taxation  of  property  shall 
be  equal  and  uniform  and  in  proportion  to  its  value,  is  not 
violated  by  exacting  a  contribution  according  to  their  gross 
income  of  the  several  railroads,  in  proportion  to  the  number  of 
miles  of  railroad  operated  within  the  State,  in  order  to  meet 
the  special  service  required  of  the  State  Railroad  Commission  .^^ 
So  a  State  statute  distributing  for  taxation  purposes  the  rolling 
stock  and  other  unlocated  personal  property  of  a  railway  com- 
pany, to  and  for  the  benefit  of  the  counties  traversed  by  the 
railroad,   does  not   violate  the   provision   in  the   Fourteenth 

961,  31  L.  ed.  790.  See  Joyce  on  Electric  Law  (2d  ed.),  §§  83a-96,  911- 
940b. 

67  Postal  Tel.  Cable  Co.  v.  Adams,  155  U.  S.  688,  39  L.  ed.  311,  15  Sup. 
Ct.  360. 

Consistently  with  the  due  process  clause  of  the  Fourteenth  Amendment 
a  State  cannot  tax  property  located  or  existing  permanently  beyond  its 
limits.  Western  Union  Teleg.  Co.  v.  Kansas,  216  U.  S.  1,  54  L.  ed.  — ,  30 
Sup.  Ct.  — .  See  this  case  also  as  to  requirement  which  was  held  to  im- 
pose an  unconstitutional  condition  on  Telegraph  Company. 

68  Railroad  Co.  v.  Maryland,  21  Wall.  (88  U.  S.)  456,  22  L.  ed.  678. 
When  State  statute  taxing  interstate  railroads  is  constitutional.    Pittsburg, 

Cincinnati,  Chicago  &  St.  Louis  Ry.  Co.  v.  Backus,  1.54  U.  S.  421,  14  Sup. 
Ct.  1114,  .38  L.  ed.  1031. 

«»  Charlotte,  Columbia  &  Augusta  R.  R.  Co.  v.  Gibbes,  142  U.  S.  386,  35 
L.  ed.  1051,  12  Sup.  Ct.  255,  48  Am.  &  Eng.  R.  Cas.  595. 

138 


FEDERAL  AGENCIES — TAXATION  §  76 

Amendment  to  the  Constitution,  that  no  State  shall  deny  to  any 
person  within  its  jurisdiction  the  equal  protection  of  its  laws/" 
nor  is  a  stipulation  in  the  charter  of  a  railroad  company,  that 
the  company  shall  pay  to  the  State  a  bonus,  or  a  portion  of  its 
earnings,  repugnant  to  the  Constitution  of  the  United  States. 
Such  a  stipulation  is  different,  in  principle,  from  the  imposition 
of  a  tax  on  the  movement  or  transportation  of  goods  or  persons 
from  one  State  to  another.  The  latter  is  an  interference  with 
and  a  regulation  of  commerce  between  the  States,  and  beyond 
the  power  of  the  State  to  impose;  the  former  is  not.'^^  The 
charter  of  the  Baltimore  &  Ohio  Railroad  Company  foi'  con- 
structing and  working  a  branch  railroad  between  Baltimore 
and  Washington  contained  a  stipulation  that  the  compan}'  at 
the  end  of  every  six  months  should  pay  to  the  State  one-fifth 
of  the  whole  amount  received  for  the  transportation  of  passen- 
gers. This  charter  was  accepted  and  complied  with  for  many 
years.  It  was  held  (1)  that  this  stipulation  was  not  repugnant 
to  the  Constitution  of  the  United  States;  (2)  that  it  was  a 
contract  to  pay,  and  not  a  receipt  of  money  belonging  to  the 
State;  and,  if  unconstitutional,  the  objection  could  be  set  up 
as  a  defense  to  an  action  brought  by  the  State  to  recover  the 
money.'-  The  State  of  origin  remains  the  permanent  situs  of 
personal  property  notwithstanding  its  occasional  excursions  to 
foreign  parts,  and  a  State  may  tax  its  own  corporations  for  all 
their  property  in  the  State  during  the  year,  even  if  every  item 
should  be  taken  into  another  State  and  then  brought  back. 
The  taxation,  therefore,  of  cars  under  the  New  York  franchise 
tax  law,  belonging  to  a  corporation  of  that  State  is  not  uncon- 
stitutional as  depriving  the  owner  of  its  property  without  due 
process  of  law  because  the  cars  are  at  times  temporarily  absent 
from  the  State,  it  appearing  that  no  cars  permanently  without 
the  State  are  taxed  .'^^ 

70  Columbus  Southern  Ry.  Co.  v.  Wright,  151  U.  S.  470,  38  L.  ed.  238,  14 
Sup.  Ct.  296;  Qa.  Stat.,  Oct.  16,  1889,  Laws  of  Ga.,  1889,  p.  29. 

"  Railroad  Co.  v.  Maryland,  21  Wall.  (88  U.  S.)  456,  22  L.  ed.  678. 

72  Railroad  Co.  v.  Maryland,  21  Wall.  (88  U.  S.)  456,  22  L.  ed.  678. 

73  New  York  Central  Rd.  Co.  v.  Miller,  202  U.  S.  584,  50  L.  ed.  1155,  26 
Sup.  Ct.  1. 

139 


§§77,78    CONSTITUTIONAL   BASIS  OF   ACTIONS  AND   DEFENSES — 

§77.  Taxation —Franchises— Capital  Stock.'^ 

A  State  may  tax  corporations  upon  their  franchise  or  business 
based  upon  the  amount  of  capital  stock  employed  within  the 
State;  ^^  and  when  not  otherwise  exempted  the  capital  stock  of 
a  corporation  and  its  shares  in  stockholders'  hands  may  both  be 
taxed,  and  it  is  not  double  taxationJ*^  So  a  State  law  requiring 
national  banks  to  pay  a  tax  which  is  rightfully  laid  on  the 
shares  of  its  stock  is  valid  under  the  limitation  of  the  doctriiw 
governing  the  taxation  of  national  banks  by  a  Stated'  A  State 
statute  may  also  lawfully  impose  a  franchise  tax  as  where 
corporations  having  capital  stock  divided  into  shares  are 
required  to  pay  a  tax  of  a  certain  percentage  upon  the  excess 
of  the  market  value  of  all  such  stock  over  the  value  of  its  real 
estate  and  machinery 7«  So  a  State  statute  taxing  stocks  of 
railroads  incorporated  in  other  States  held  by  citizens  of  the 
taxing  State  is  not  unconstitutional  under  the  Fourteenth 
Amendment  because  no  similar  tax  is  imposed  on  the  stock  of 
domestic  railroads  or  of  foreign  railroads  doing  business  in  such 
taxing  State;  the  property  of  the  former  class  of  railroads  being 
untaxed,  and  that  of  the  latter  two  classes  being  taxed,  by  the 
State  7^  An  assessment  of  a  tax  upon  the  shares  of  stockholders 
in  a  corporation  appearing  upon  the  books  of  the  company, 
which  the  company  is  required  to  pay  irrespective  of  any 
dividends  or  profits  payable  to  the  shareholder,  out  of  which  it 
might  repay  itself,  is  substantially  a  tax  upon  the  corporation 
itself.«° 

§  78.  Taxation—"  Franchise  "— "  Corporate  Franchise  " 

74  See  §  72,  herein. 

75  New  York  v.  Roberts,  171  U.  S.  658,  43  L.  ed.  345,  19  Sup.  Ct.  225. 

76  Bank  of  Commerce  v.  Tennessee,  161  U.  S.  134,  16  Sup.  Ct.  456,  40  L. 
ed.  645.  Compare  opinion  of  court  in  Home  Savings  Bk.  v.  Des  Moines,  205 
U.  S.  503,  510,  51  L.  ed.  901,  27  Sup.  Ct.  571. 

77  National  Bank  v.  Commonwealth,  9  Wall.  (76  U.  S.)  353,  19  L.  ed.  701, 
aff'd  in  McClellan  v.  Chipman,  164  U.  S.  347,  41  L.  ed.  461,  17  Sup.  Ct.  85. 

78  Hamilton  Company  v.  Massachusetts,  6  Wall.  (73  U.  S.)  632,  639,  18 
L.  ed.  904. 

79  Kidd  V.  Alabama,  188  U.  S.  730,  23  Sup.  Ct.  401,  47  L.  ed.  669. 

80  New  Orleans  v.  Houston,  119  U.  S.  265,  30  L.  ed.  411,  7  Sup.  Ct.  198. 

140 


FEDERAL    ACJENCIE.S — TAXATION  §  78 

— Express  Companies— Ferry  Franchise  -Bridge  Companies 
— Insurance  Companies — Uniformity  of  Taxation. 

Although  a  statute  may  i)rovide  for  a  tax  on  the  "franchise" 
of  corporations,  including  certain  enumerated  public  service 
corporations  and  those  whose  lines  extend  beyond  the  limits 
of  the  State,  and  may  also  use  the  words  "corporate  franchise," 
nevertheless  the  legislative  intention  may,  as  deduced  from  the 
entire  statute,  be  such  that  the  scheme  of  taxation  is  not  in 
contravention  of  the  commerce  clause  and  the  Fourteenth 
Amendment,  and  also  be  in  harmony,  as  a  property  tax,  with 
the  Constitution  of  the  State  enacting  the  statute.*^  A  State 
statute  defining  express  companies,  and  prescribing  the  mode 
of  taxing  the  same,  and  fixing  the  rate  of  taxation  thereon, 
imposes  a  tax  only  on  business  done  within  the  State,  and  does 
not  violate  the  requirements  of  uniformity  and  equality  of 
taxation  prescribed  by  a  State  Constitution.*^  Diversity  of 
taxation  both  with  respect  to  the  amount  imposed  and  the 
various  species  of  property  selected,  either  for  bearing  its 
burdens  or  for  being  exempt  from  them,  is  not  inconsistent  with 
a  perfect  uniformity  and  equality  in  taxation,  and  of  a  just 
adaption  of  property  to  its  burdens.  A  system  of  taxation 
which  imposes  the  same  tax  upon  every  species  of  property, 
irrespective  of  its  nature,  or  condition  or  class,  will  be  destruc- 
tive of  its  pnnci})le  of  uniformity  and  equality  of  taxation,  and 
of  a  just  adaption  of  property  to  its  burdens.*^  A  State  cannot 
tax  a  ferry  franchise  over  a  navigable  river  granted  by  another 
State,  even  though  granted  to  a  corporation  of  the  taxing 
State,  where  the  jurisdiction  of  the  latter  only  extends  to  low 
water  mark;  such  taxation  would  amount  to  a  deprivation  of 
property  without  due  process  of  law.*^    But  a  State  may  tax 

81  Adams  Express  Co.  v.  Kentucky,  166  U.  S.  171,  41  L.  ed.  960,  17  Sup. 
Ct.  527;  as  to  taxation  of  franchises,  see  Joyce  on  Franchises,  §§  417-461. 

S2  Pacific  Express  Co.  v.  Seibert,  142  U.  S.  339,  35  L.  ed.  1035,  12  Sup. 
Ct.  250;  Mo.  Stat.,  May  16,  1SS9. 

83  Pacific  Express  Co.  v.  Seibert,  142  U.  S.  339,  35  L.  ed.  1035,  12  Sup.  Ct. 
250. 

8*  Louisville  &  Jeffersonville  Ferry  Co.  v.  Kentucky,  188  U.  S.  385,  23 
Sup.  Ct.  463,  47  L.  ed.  513.    In  this  case  the  franchise  was  granted  by  In- 

141 


§  70     CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES-^ 

the  intangible  pniperty  within  its  limits  of  a  bridge  company 
created  and  organized  in  the  State  for  the  pur})ose  of  erecting 
and  operating  a  railroad  bridge  over  a  navigable  river  between 
it  and  another  State;  and  it  may  include  the  franchises  it  has 
granted  in  the  valuation  of  the  company's  property;  such  a 
statute  does  not  violate  the  Federal  Constitution.*^  So  a 
State  statute,  requiring  insurance  companies  to  make  full  and 
specified  returns  to  the  proper  state  officers  of  their  business 
condition,  liabilities,  losses,  premiums,  taxes,  dividends,  ex- 
penses, etc.,  is  an  exercise  of  the  police  power  of  the  State 
and  may  be  enforced  against  a  company  organized  under  a 
special  charter  from  the  legislature  of  the  State,  which  does  not 
in  terms  require  it  to  make  such  return,  without  thereby 
depriving  it  of  any  rights  under  the  Constitution  of  the  United 
States.*^ 

§  79.  Exemption  from  Taxation — Power  of  State  as  to — 
Effect  of  Consolidation,  etc.*' 

It  has  been  repeatedly  held  by  the  Federal  Supreme  Court 
that  the  legislature  of  a  State  may  exempt  particular  parcels  of 
property  or  the  property  of  particular  persons  or  corporations 
from  taxation,  either  for  a  specified  period  or  perpetually,  or 
may  limit  the  amount  or  rate  of  taxation  to  which  such  prop- 
erty shall  be  subjected,  and  that  when  such  immunity  is  con- 
ferred or  such  limitation  is  prescribed  by  the  charter  of  a  cor- 
poration it  becomes  a  part  of  the  contract,  and  is  equally 
inviolate  with  its  other  stipulations;  nevertheless,  before  any 

diana  to  maintain  a  ferry  across  the  Ohio  River  from  the  Indiana  shore  to 
the  Kentucky  shore.  The  franchise  was  granted  to  a  Kentucky  corporation 
with  a  franchise  from  that  State  to  ferry  from  the  Kentucky  to  the  Indiana 
shore.  The  jurisdiction  of  Kentucky  extended  only  to  low  water  mark  on 
the  northern  and  western  side  of  the  Ohio  River.  It  was  held,  in  addition  to 
the  above,  that  the  Indiana  franchise  had  its  situs  for  taxation  in  that  State; 
also,  quaere,  whether  such  taxation  would  burden  interstate  commerce,  not 
decideil. 

85  Hen.lerson  Bridge  Co.  v.  Kentucky,  1G6  U.  S.  l.W,  41  L.  ed.  953,  17 
Sup.  Ct.  532. 

88  Eagle  Ins.  Co.  v.  Ohio,  153  U.  S.  446,  38  L.  ed.  778,  14  Sup.  Ct.  868. 

87  See  §  23,  herein. 

142 


FEDERAL   AGENCIES — TAXATION  §  79 

such  exemption  or  limitation  can  Ix'  admitted,  the  intent  of  the 
legislature  to  confer  the  innnunity  or  prescribe  the  limitation 
must  be  clear  beyond  a  reasonable  doubt.  All  public  grants 
are  strictly  construed,  and  nothing  can  be  taken  against  the 
State  by  presumption  or  inference.  The  established  rule  of 
construction  in  such  cases  is  that  rights,  privileges  and  im- 
nmnitics  not  expressly  granted  are  reserved.*^  A  provision  in 
a  charter  that  certain  payments  shall  be  made  out  of  income 
and  that,  after  dividends  u[)  to  a  specified  percentage  have 
been  paid,  the  balance  shall  be  divided  between  the  Govern- 
ment and  the  stockholders,  does  not,  in  the  absence  of  any 
exemption  in  express  terms,  (>xempt  the  corporation  from 
taxation  on  its  franchise.*"  A  provision  in  an  act  of  a  State 
legislature  under  which  two  railroads  were  consolidated,  re- 
quiring the  new  company  to  pay  annually  into  the  State  treas- 
ury a  tax  of  a  certain  per  cent  upon  its  capital  stock  of  a  certain 
amount,  was  held  not  to  prevent  a  subsequent  legislature  from 
imposing  a  further  or  different  tax  upon  the  company.  The 
amount  designated  in  such  case  being  held  to  be  only  a  declara- 
tion of  the  tax  payable  annually  until  a  different  rate  should 
be  established.^*^  A  consolidation  of  railroads  operating  to 
extinguish  the  old  company  and  to  form  a  new  one  as  of  the 
date  of  consolidation  precludes  an  exemption  from  taxation 
in  the  old  charter  from  passing  to  the  new  company."^ 

Immunity  from  taxation  does  not  pass  to  purchaser  of  the 

88  Delaware  Railroad  Tax,  18  Wall.  (85  U.  S.)  206,  21  L.  ed.  888.  See  also 
Metropolitan  St.  Ry.  Co.  v.  New  York  State  Board  Tax  Comm'rs,  199  U.  S. 
1,  50  L.  ed.  65,  25  Sup.  Ct.  2.3  (case  followed  in  Twenty-third  St.  Ry.  Co.  v. 
New  York  State  Board  Tax  C'omm'rs,  199  U.  S.  53,  50  L.  ed.  85,  which  also 
follows  Brooklyn  City  Rd.  Co.  v.  New  York,  199  U.  S.  48,  50  L.  ed.  79,  25 
Sup.  Ct.  713);  Tomlinson  v.  Branch,  15  Wall.  (82  U.  S.)  460,  21  L.  ed.  189. 

That  exemptions  from  taxation  are  to  be  strictly  construed,  etc.,  see  also 
Ford  V.  Delta  &  Pine  Land  Co.,  164  U.  S.  662,  17  Sup.  Ct.  230,  41  L.  ed.  590; 
Covington  &  Lexington  Turnpike  Rd.  Co.  v.  Sandford,  164  U.  S.  578,  41 
L.  ed.  .560,  17  Sup.  Ct.  198. 

8»  Honolulu  Rapid  Transit  &  Land  Co.  v.  Wilder,  211  U.  S.  137,  53  L.  ed. 
121,  29  L.  ed.  44,  aff'g  18  Hawaii,  668. 

Ko  Delaware  Railroad  Tax,  18  Wall.  (85  U.  S.)  206,  21  L.  ed.  888. 

»'  Keokuk  &  Western  Rd.  Co.  v.  Missouri,  152  U.  S.  301,  38  L.  ed.  450,  14 
Sup.  Ct.  592. 

143 


§  79     CONSTITUTIONAL    BASIS    OF    ACTIONS    AND    DEFENSES— 

property  and  franchises  of  a  railroad  under  a  decree  to  enforce 
a  statutory  lien  and  such  property  is  subject  to  taxation  there- 
after by  the  State. ''^ 

»2  Railroad  Company  v.  County  of  Hamblen,  102  U.  S.  273,  26  L.  ed.  152. 

Exemption  from  taxation  and  effect  of  consolidation,  etc.;  assignability; 
see  the  following  cases:  Yazoo  &  Mississippi  Valley  Rd.  Co.  v.  Vicksburg, 
209  U.  S.  358,  28  Sup.  Ct.  510,  52  L.  ed.  833  (exemption;  consolidation;  ap- 
plication of  laws  affecting  constituent  companies  and  obligation  of  contract) ; 
Jetton  V.  University  of  Tlie  South,  208  U.  S.  489,  52  L.  ed.  584,  28  Sup. 
Ct.  375  (contract  impairment  clause;  charter  exemption  not  extended  to 
lessees  of  corporation  exempted) ;  Rochester  Railway  Co.  v.  Rochester,  205 
U.  S.  236,  51  L.  ed.  784,  27  Sup.  Ct.  469,  aff'g  182  N.  Y.  116  (transference  of 
legislative  contract  of  immunity  from  taxation;  impairment  of  contract; 
effect  of  merger  of  corporations  on  contract  of  immunity;  when  nontrans- 
ferable); Powers  V.  Detroit,  Grand  Haven  &  M.  Ry.  Co.,  201  U.  S.  543,  26 
Sup.  Ct.  556,  50  L.  ed.  860,  aff'g  138  Fed.  264  (reorganization  of  railroad 
company;  no  new  corporation;  statutory  exemption  from  taxation  not  de- 
stroyed); New  Mexico  v.  United  States  Trust  Co.,  174  U.  S.  545,  43  L.  ed. 
1079,  19  Sup.  Ct.  784;  s.  c,  172  U.  S.  171,  43  L.  ed.  407,  19  Sup.  Ct.  128, 
172  U.  S.  186,  43  L.  ed.  413,  19  Sup.  Ct.  146,  881  (taxation;  railroads;  exemp- 
tion of  right  of  way  acquired  from  United  States;  assessment  of  superstruc- 
tures and  improvements);  Ford  v.  Delta  &  Pine  Land  Co.,  164  U.  S.  662,  41 
L.  ed.  590,  17  Sup.  Ct.  230  (taxation;  extent  of  exemption;  railroads;  assess- 
ments; local  improvements);  Covington  &  Lexington  Turnpike  Rd.  Co.  v. 
Sandford,  164  U.  S.  578,  41  L.  ed.  560,  17  Sup.  Ct.  198  (new  corporation 
created  out  of  old  one;  exemption  from  legislative  control,  held  not  to  pass 
to  certain  extent;  tolls;  taxation);  Phoenix  Fire  &  Marine  Ins.  Co.  v.  Ten- 
nessee, 161  U.  S.  174,  16  Sup.  Ct.  471,  40  L.  ed.  660  (exemption  from  taxa- 
tion not  conferred  on  new  company  beyond  a  defined  limit  which  was 
conferred  on  the  other  company  by  act  incorporating  it) ;  Tennessee  v.  Whit- 
worth,  117  U.  S.  139,  6  Sup.  Ct.  649,  29  L.  ed.  833,  117  U.  S.  129,  6  Sup.  Ct. 
645,  29  L.  ed.  830  (consolidation  of  railroads  of  different  States;  shares  of 
new  company  issued  for  shares  of  old  one;  exemption  from  taxation  passes 
into  new  shares  in  absence  of  statute  of  first  State  to  contrary);  St.  Louis, 
Iron  Mountain  &  Southern  Ry.  Co.  v.  Berry,  113  U.  S.  465,  5  Sup.  Ct.  529, 
28  L.  ed.  1055  (consolidation  of  railroads;  exemption  from  taxation;  new 
company  took  franchises,  etc.,  subject  to  organic  law  as  to  taxation  at  time 
of  consolidation) ;  Louisville  &  Nashville  Rd.  Co.  v.  Palmes,  109  U.  S.  244, 
27  L.  ed.  922,  3  Sup.  Ct.  193  (right  of  railroad  to  exemption  from  taxation 
does  not  pass  by  sale  under  mortgage;  right  personal  and  not  assignable); 
Railroad  Company  v.  Comm'rs,  103  U.  S.  1,  26  L.  ed.  359  (when  exemption 
t  rom  taxation  does  not  pass  by  grant  to  railroad,  reaffirming  Railroad  Com- 
pany V.  Gaines,  97  U.  S.  697,  24  L.  ed.  1091;  Morgan  v.  Louisiana,  93  U.  S. 
217,  23  L.  ed.  860) ;  Railroad  Company  v.  Maine,  96  U.  S.  499,  24  L.  ed.  836 
(consolidation;  tax  exemption  not  continued);  Chesapeake  &  Ohio  Rd.  Co. 
v.  Virginia,  94  U.  S.  718,  24  L.  ed.  310  (consoHdation ;  railroads;  no  greater 
immunity  from  taxation  acquired  than  severally  enjoyed  as  to  portions  of 

144 


FEDERAL  AGENCIES — TAXATION  §  79 

road  belonging  to  constituent  companies  under  their  respective  charters; 
whatever  property  was  subject  to  taxation  remained  so  after  consolidation); 
Central  Railroad  &,  Bkg.  Co.  v.  Georgia,  92  U.  S.  665,  23  L.  ed.  757  (con- 
solidation; railroads;  effect  on  charter  exemption  from  taxation  on  each 
corporation);  Tomlinson  v.  Branch,  15  Wall.  (82  U.  S.)  460,  21  L.  ed.  189 
(consolidation;  railroads;  tax  exemption  and  extension  to  successor  cor- 
poration; necessity  of  express  words);  Philadelphia,  W.  &  B.  Rd.  Co.  v. 
Maryland,  10  How.  (51  U.  S.)  370,  13  L.  ed.  401  (consolidation;  railroads; 
assessment  of;  exemption  from  taxation  taxing  power  never  presumed  re- 
linquished unless  intention  clearly  expressed). 


10  145 


§§  80,  81      JURISDICTION    AND    VENUE — DEFINITIUNS 


CHAPTER  VII 

JURISDICTION   AND   VENUE — DEFINITIONS 

§  80.  Definition  of  Jurisdiction.  §  87.  Jurisdiction  in  "  Special  Cases  " 

81.  Definition  of  Jurisdiction  Con-  Defined  and  Construed. 

tinued — Nature  of  Corpora-  88.  Subject-Matter    and    Jurisdic- 
tion Cases  in  Which  Given  or  tion  Over  It  Defined. 
Applied — Instances.  89.  Definitions  —  "Civil"     and 

82.  Same  Subject.  "Criminal"  Jurisdiction  — 
,  83.  Same  Subject.  "  Further  Civil  and  Crimina' 

84.  "General  Jurisdiction  in  Law  Jurisdiction." 

and  Equity"  Defined.  90.  Jurisdiction    as   Applied   to   a 

85.  "  Full  Jurisdiction  in  All  Mat-  State  or  to  City  Council. 

ters  of  Equity"  Defined.  91.  Venue  Defined. 

86.  Concurrent    Jurisdiction     De- 

fined. , 

§  80.  Definition  of  Jurisdiction. 

Jurisdiction  is  the  power  to  hear  and  determine  a  cause  or 
matters  in  controversy  between  parties  to  a  suit;  to  adjudicate 
or  exercise  any  judicial  power  over  them.^ 

§81.  Definition  of  Jurisdiction  Continued— Nature  of 
Corporation  Cases  in  Which  Given  or  AppUed — Instances. 

There  are  various  other  definitions  of  jurisdiction.  Many  of 
them  have  evidently  been  formulated  with  a  view  to  the  nature 
of  the  cause,  the  character  of  the  judicial  power  to  be  exercised, 
or  the  particular  point  involved,  while  others  have  only  a  gen- 
eral application.  We  shall  confine  ourselves  in  the  following 
illustrations  to  a  statement  of  the  nature  of  those  corporation 
cases  in  which  the  word  jurisdiction  has  been  defined.  The 
substance  of  the  above  definition  has  been  given  and  applied 
in  a  suit  by  attachment  and  a  claim  for  damages  against  a 
foreign  corporation,  for  the  negligent  loss  of  baggage  and  a 

1  See  notes  under  the  two  next  following  sections. 

146 


JURISDICTION    AXl)    Vi:.\UE — DEFINITIONS  §  SI 

valise  by  a  guest  in  one  of  its  sleeping  cars;"  in  a  case  of  con- 
demnation proceedings  by  a  railway  company  and  the  juris- 
diction of  a  justice  of  the  peace;  '^  in  the  matter  of  a  petition  by 
a  railroad  company  for  a})pointment  of  commissioners  of  ap- 
j)raisal  and  of  the  insufficiency  of  the  petition  to  give  the  court 
jurisdiction  of  the  subject-matter;'*  in  an  action  against  a 
State  board  of  equalization  to  enjoin  a  certification  to  the 
State  Comptroller  on  the  assessed  valuation  of  railroad  prop- 
erty ;^  in  a  case  of  certiorari  to  a  county  board  of  supervisors 
sitting  as  a  board  of  equalization  of  taxes,  mider  a  claim  that 
the  board  exceeded  its  jurisdiction,  in  that  it  did  not  regularly 
jiursuc  its  authority  in  determining  the  assessable  value  of 
railway  property,  and  in  that  it  received  illegal  evidence  con- 
cerning profits  earned  by  the  corporation ;  ^  in  a  cause  of  action 

2  Pullman  Palace  Car  Co.  v.  Harrison,  122  Ala.  149,  157,  82  Am.  St.  Rep. 
68.  Defined,  per  Tyson,  J.,  as  follows:  Jurisdiction  is  "  the  power  of  a  court 
or  judge  to  hear  and  determine  a  cause.  *  *  *  It  is  coram  judice  when 
a  cause  is  presented  which  brings  this  power  into  action.  *  *  *  The 
power  to  decide  upon  the  cause  of  action,  as  presented  by  the  pleadings,  is 
jurisdiction,  like  the  power  to  decide  any  other  legal  proposition  that  the 
case  may  involve."    Id.,  per  Tyson,  J. 

3  Musick  V.  Kansas  City,  Springfield  &  Memphis  Ry.  Co.,  114  Mo.  309,  21 
S.  W.  491.  Jurisdiction  of  the  sribject- matter  of  a  proceeding  is  "the  power  to 
hear  and  determine  cases  of  the  general  class  to  which  the  proceeding  in 
question  belongs."     Id. 

*  Winnebago  Furniture  Mfg.  Co.  v.  Wisconsin  Midland  R.  Co.,  81  Wis. 
389,  393,  51  N.  W.  576,  quoting  from  the  definitions  of  jurisdiction  given  in 
United  States  v.  Arredondo,  6  Pet.  (31  U.  S.)  691,  709,  8  L.  ed.  547:  Grig- 
non's  Lessee  v.  Astor,  2  How.  (43  U.  S.)  319,  338,  11  L.  ed.  283.  See  these 
last  citations  in  note  12  below. 

6  Nashville,  C.  &  St.  L.  Ry.  v.  Taylor,  86  Fed.  168,  171,  quoting  from 
Rhode  Island  v.  Massachusetts,  12  Pet.  (37  U.  S.)  657,  9  L.  ed.  1233,  wherein 
jurisdiction  is  defined  as  the  power  to  hear  and  determine  the  subject- 
matter  in  controversy  between  parties  to  a  suit;  to  adjudicate  or  exercise 
any  judicial  power  over  them;  quoted  also  in  Dahlgreen  v.  Superior  Court,  8 
Cal.  App.  622,  626,  97  Pac.  681,  which  also  cites  People  v.  Sturdevant,  9 
N.  Y.  263,  59  Am.  Dec.  536.  In  the  Rhode  Island  v.  Massachusetts  case  it  is 
also  declared  that:  "The  question  is  whether,  in  the  case  before  a  court,  their 
action  is  judicial  or  extrajudicial  or  without  authority  of  law  to  render  a 
judgment  or  decree  upon  the  rights  of  the  Htigant  parties.  If  the  law  con- 
fers the  power  to  render  a  judgment  or  decree  the  court  has  jurisdiction." 

"  C  entral  Pacific  Rd.  Co.  v.  Placer  County,  43  Cal.  365.  Jurisdiction,  gen- 
erally defined,  is  the  power  to  hear  and  determine.    When  the  word  is  ap- 

147 


§  82  JURISDICTION    AND    VENUE — DEFINITIONS 

to  cnforco  a  mechanic's  lien  against  mining  property  wherein 
several  intervenors  claimed  liens  upon  the  entire  property,  and 
one  only  upon  a  portion  thereof,  and  an  order  of  sale  of  the 
entire  property  directing  a  pro  rata  distribution  of  the  proceeds 
among  all  the  henholders  was  held  unauthorized  and  void;' 
in  a  case  of  a  writ  of  prohibition  to  enjoin  a  judge  from  pro- 
ceeding in  a  cause  where  he  had  an  interest  therein  and  was 
disquaUfied,  in  that  his  property  would  be  equally  subject  to 
injury  as  that  of  the  plaintiff  in  an  action  for  an  injunction  to 
restrain  depositing  tailings  and  debris  from  mining  claims  in 
the  channel  of  a  river;  ^  in  a  matter  of  dissolution  of  an  in- 
solvent bank  and  exclusive  jurisdiction  over  funds  of  such 
corporation,  and  pendency  of  proceedings  to  dissolve  as  not 
a  bar  to  an  action  by  the  attorney  general.'' 

§  82.  Same  Subject. 

The  substance  of  the  above  definition  is  also  given  or  applied 
in  a  case  of  a  judgment  or  decree  as  a  bar,  and  ejectment  and 
estoppel  to  set  up  an  older  grant ;  ^°  in  a  suit  covering  the 

plied  to  a  particular  claim  or  controversy  it  is  the  power  to  hear  and  deter- 
mine that  controversy.    Id. 

7  Bassick  Mining  Co.  v.  Schoolfield,  10  Colo.  46,  14  Pac.  65,  "Jurisdiction 
in  the  court "  was  defined  as  the  "  power  to  hear  and  determine  the  partic- 
ular case  involved.  If  this  power  to  hear  and  determine  the  particular  case 
does  not  exist  in  the  court  in  point  of  law,  then  there  can  be  no  jurisdiction 
in  the  case.  If  it  does  exist,  then,  to  confer  actual  jurisdiction  of  the  partic- 
ular case,  or  the  subject-matter  thereof,  the  jm-isdictional  power  of  the 
court  must  be  invoked  or  brought  into  action  by  such  measures  and  in  such 
manner  as  is  required  by  the  local  law  of  the  tribunal.  When  this  is  done  it 
is  then  coram,  judice.  If  this  be  not  done,  there  is  at  least  error,  if  not  want 
of  vaHdity  in  the  proceedings."    Id. 

8  North  Bloomfield  Gravel  Mining  Co.  v.  Keyser,  58  Cal.  315,  defining 
(at  p.  326)  jurisdiction  as  the  authority  by  which  judicial  officers  take  cog- 
nizance of  and  decide  causes,  and  the  power  to  hear  and  determine  causes. 

9  People  V.  Murray  Hill  Bank,  41  N.  Y.  Supp.  804,  805,  806,  10  App.  Div. 
328.  (See  Murray  Hill  Bank,  In  re,  43  N.  Y.  Supp.  836,  14  App.  Div.  320, 
aff'd  in  153  N.  Y.  199,  47  N.  E.  298.)  "  'Jurisdiction,'  in  the  strict  mean- 
ing of  the  term  as  applied  to  judicial  officers  and  tribunals,  means  no  more 
than  the  power  lawfully  existing  to  hear  and  determine  a  cause.  It  is  the 
power  to  adjudge  concerning  the  general  questions  involved."  Id.,  per 
Brown,  P.  J. 

lost.  Lawrence  Co.  v.  Holt  &  Matthews,  51  W.  Va.  352,  364,  41  S.  E.  — , 

148 


JURISDICTION    AND    VENUE — DEFINITIONS  §  82 

points  of  concurrent  jurisdiction  nonabatenient  of  an  action 
by  a  pending  action,  suit  against  and  interference  with  a  re- 
ceiver and  property  in  his  i)Ossession,  authority  of  courts  to 
punish  summarily,  and  contempt;  ^^  in  an  action  to  recover 
damages  for  death  caused  by  the  negligence  of  a  railroad  com- 
pany during  transportation  on  a  steam  ferry  ;^-  and  in  a 
Georgia  decision  where  there  was  also  an  action  for  the  re- 
covery of  damages  for  homicide  of  the   plaintiff's  intestate 

defining  jurisdiction  as  the  "right  to  adjudicate  concerning  the  subject- 
matter  in  the  given  case." 

11  Spinning  &  Brown  v.  Ohio  Life  Ins.  &  Trust  Co.,  2  Disney  (Ohio),  336, 
374,  375,  where  the  court  gives  the  definition  in  the  Arredondo  case  (see 
note  next  following,  down  to  and  including  the  words  "containing  all  the 
requisites,  and  in  the  manner  prescribed  by  law").  It  further  defines  ju- 
risdiction as  "the  power  to  hear  and  determine  the  subject-matter  in  con- 
troversy. If  the  law  confers  the  power  to  render  a  judgment  or  decree  then 
the  court  has  jurisdiction.  What  shall  be  adjudged  or  decreed  between 
the  parties  is  judicial  action."  [Quoting  from  Rhode  Island  v.  Massachu- 
setts, 12  Pet.  (37  U.  S.)  657,  718,  9  L.  ed.  1233]  and  then  concludes:  "Such 
we  understand  to  be  the  law  of  jurisdiction.  It  exists  by  the  creation  of  the 
court,  and  the  powers  conferred  upon  it  to  hear  and  determine  causes;  but 
when  and  how  the  power  is  to  be  exercised  depends  upon  the  process  by 
which  parties  invoke  its  aid." 

12  Holmes  V.  Oregon  &  California  Rd.  Co.,  9  Fed.  229,  232.  In  this  case 
the  court  declares  that:  "  'The  power  to  hear  and  determine  a  cause  is  ju- 
risdiction; it  is  coram  judice  whenever  a  case  is  presented  which  brings  this 
power  into  action.  If  the  petitioner  presents  such  a  case  in  his  petition  that, 
on  demurrer,  the  court  would  render  a  judgment  in  his  favor,  it  is  an  un- 
doubted case  of  jurisdiction,  whether,  on  an  answer  denying  and  putting 
in  issue  the  allegations  of  the  petition,  the  petitioner  makes  out  his  case  is 
the  exercise  of  jurisdiction  conferred  by  the  filing  of  a  petition  containing 
all  the  requisites,  and  in  the  manner  prescribed  by  law  [United  States  v. 
Arredondo,  6  Pet.  (31  U.  S.)  691,  709,  8  L.  ed.  547].  Any  movement  by  a 
court  is  necessarily  the  exercise  of  jurisdiction;  so,  to  exercise  any  judicial 
power  over  the  subject-matter  and  the  parties,  the  question  is  whether,  on 
the  case  before  a  court,  their  action  is  judicial  or  extrajudicial,  with  or  with- 
out the  authority  of  law,  to  render  a  judgment  or  decree  upon  the  rights  of 
the  litigant  parties.  If  the  law  confers  the  power  to  render  a  judgment  or 
decree,  then  the  court  has  jurisdiction  what  shall  be  adjudged  or  tlecreed 
between  the  parties  and  with  which  is  the  right  of  the  case,  is  judicial  ac- 
tion by  hearing  and  determining  it.  [Rhode  Island  v.  Massachusetts,  12 
Pet.  (37  U.  S.)  654,  718,  9  L.  ed.  1232;  Watkins,  Ex  parte,  3  Pet.  (28  U.  S.) 
193,  205.]  It  is  a  case  of  judicial  cognizance,  and  the  proceeding  is  judicial 
[Kendall  v.  United  States,  12  Pet.  (37  U.  S.)  524,  623,  9  L.  ed.  1181],'  " 
citing  Grignon's  Lessee  v.  Astor,  2  How.  (43  U.  S.)  319,  338,  11  L.  ed.  283. 

149 


§  82  JURISDICTION    AND    VENUE — DEFINITIONS 

brought  against  a  railroad.  A  plea  in  abatement,  on  the 
ground  of  a  prior  action  pending,  was  filed,  and  it  was  held 
that  such  plea,  in  alleging  that  the  court  in  which  the  action 
was  brought  had  "jurisdiction  of  the  case"  "under  the  allega- 
tions of  the  declaration,"  sufficiently  averred  that  the  court 
referred  to  had  jurisdiction  to  entertain  the  action.  It  was 
further  decided  that  whether  or  not  the  court  in  which  such  a 
declaration  had  been  duly  filed  and  served,  had  jurisdiction  to 
dispose  of  the  case  upon  its  merits,  was  a  question  for  its  own 
determination  and  not  for  that  of  another  court  in  which  a 
second  suit  by  the  same  plaintiff,  against  the  same  defendant, 
upon  the  same  cause  of  action,  was  brought .^^  So  in  a  Federal 
case  there  was  a  petition  by  creditors  to  revise,  in  matter  of 
law,  the  proceedings  of  the  District  Court,  which  resulted  in  a 
denial  of  their  motion  to  vacate  an  order  of  adjudication  of  the 
bankruptcy  of  a  corporation,  and  to  permit  them  to  file  an 
answer  and  to  litigate  the  issue  whether  or  not  the  corporation 
was  principally  engaged  in  any  pursuit  which  subjected  it  to 
adjudication  as  a  bankrupt.  One  of  the  points  decided  was 
that  the  issue  whether  or  not  a  corporation  was  subject  to 
adjudication  as  a  bankrupt  was  not  jurisdictional.  Another 
point  determined  was  that  while  the  jurisdiction  of  the  national 
courts  is  limited,  they  are  not  inferior  courts,  and  their  judg- 
ments possess  every  attribute  of  finality  and  estoppel  apper- 
taining to  those  of  courts  of  general  jurisdiction,  and  the 
absence  from  their  records  of  all  appearance  of  jurisdictional 
facts  is  immaterial.^^ 

13  Wilson  V.  Atlanta,  Knoxville  &  Northern  Ry.  Co.,  115  Ga.  171,  181, 
182,  41  S.  E.  699.  The  court,  per  Lumpkm,  J.,  declared  that  "the  power  to 
hear  and  determine  a  cause  is  jurisdiction"  and  that  "any  movement  by 
a  court  is  necessarily  the  exercise  of  its  jurisdiction."  "Our  Civil  Code, 
§  5094  *  *  *  declares  that  to  be  'a  good  cause  of  abatement'  the 
former  suit  must  be  pending  in  the  same  or  some  '  other  court  that  has  juris- 
diction' we  may  and  do  concede  that  this  means  jurisdiction  to  entertain 
the  case;  but  the  jurisdiction  depends  upon  the  plaintiff's  allegations  of  facts 
and  not  upon  the  truth  of  those  allegations." 

14  First  National  Bk.  of  Belle  Fourche,  In  re  (U.  S.  C.  C.  A.),  152  Fed.  64, 
68,  G9,  where  the  court,  per  Sanborn,  Cir.  J.,  defines  "jurisdiction  of  the 
subject-matter  and  of  the  parties"  as  "the  right  to  determine  the  suit  or 


JURISDICTION    AND    VENUE— DEFINITIONS  §  83 

§  83.  Same  Subject. 

In  an  Illinois  case  there  was  an  action  of  assumpsit  to  re- 
cover on  an  insurance  policy  for  a  loss  by  fire  and  the  question 
was  in  issue  as  to  when  a  suit  was  commenced  and  when  juris- 
diction was  acquired.  It  was  declared  that  jurisdiction  over 
the  person  was  not  essential  to  the  commencement  of  a  suit  at 
law,  but  that  the  court  must  in  some  manner  acquire  jurisdic- 
tion over  the  person  or  subject-matter  or  both,  and  that  suit 
was  commenced  when  the  prcecipe  was  filed  and  the  first  sum- 
mons issued  by  the  clerk  and  that  the  policy  limitation  as  to 
the  time  of  bringing  suit  was  not  a  bar,  although  a  subsequent 
process  was  issued  after  the  expiration  of  the  time  so  limited 
by  the  policy .^^  In  Arkansas  where  an  action  was  brought 
for  a  penalty  for  failure  of  a  railroad  company  to  signal  at 
highway  crossings  there  was  also  a  question  as  to  jurisdiction 
of  the  subject-matter  and  when  it  was  acquired;  it  was  held 
that  when  a  case  is  colorably  within  the  court's  general  ju- 
risdiction it  has  jurisdiction  even  though  the  pleadings  are 
defective,  and  that  its  judgment  cannot  be  collaterally  im- 
peached on  certiorari ;  also  that  if  defendant  is  actually  served 
with  summons  the  court  has  jurisdiction  even  though  the  writ 
is  defective  or  the  service  irregular.^^  Other  definitions  have 
also  been  given  and  applied  in  corporation  cases.  Thus  in  a 
case  in  the  United  States  Supreme  Court  a  bill  in  equity  was 
filed  by  a  railroad  company,  a  corporation  of  one  State,  against 

proceeding  in  favor  of  or  against  the  respective  parties  to  it.  The  facts 
essential  to  invoke  this  jurisdiction  differ  materially  from  those  essential 
to  constitute  a  good  cause  of  action  for  the  relief  sought."  This  case  is  cited 
in  Tully,  In  re  (U.  S.  D.  C),  156  Fed.  634,  637,  to  the  point  that  jurisdiction 
having  been  acquired,  the  court  had  a  right  to  adjudicate  upon  the  facts 
appearing,  and  that  parties  are  thereby  estopped  from  attacking  the  cor- 
rectness of  that  adjudication  collaterally. 

15  Schroeder  v.  Merchants'  &  Mechanics'  Ins.  Co.,  104  111.  71,  76,  defining 
jurisdiction  as  "the  ])ower  to  hear  and  determine  a  cause;  it  is  coram  judice 
whenever  a  case  is  presented  which  brings  this  power  into  action,"  and 
also  that:  "The  praecipe  when  filed  brought  the  power  of  the  court  into  ac- 
tion." 

"Railway  Co.  v.  State,  55  Ark.  200,  205,  17  N.  W.  806,  defining  juris- 
diction as  "the  right  to  adjudicate  concerning  the  subject-matter  in  a  given 
case." 

151 


§  83  JURISDICTION    AND    VENUE — DEFINITIONS 

a  revenue  agent,  a  railroad  commission,  and  a  railroad  corpora- 
tion, all  citizens  of  another  State,  to  enjoin  the  railroad  com- 
mission from  approving  and  certifying  an  assessment  for  taxes 
on  the  defendant  railroad  for  certain  years,  and  to  enjoin  the 
revenue  agent  from  beginning  any  suit  or  advising  any  of  the 
counties  or  towns  along  the  line  of  such  road  to  bring  suit  for 
the  recovery  of  such  taxes,  and  for  a  decree  adjudging  such 
railroad  to  be  exempt  from  State  and  county  taxation  for  such 
specified  years.  The  plaintiff  claimed  the  right  to  bring  the 
bill  upon  the  ground  that  it  was  a  lessee  of  the  property  and  a 
creditor  and  mortgage  bondholder  of  the  defendant  railroad 
company  whose  property  was  sought  to  be  taxed.  A  tem- 
porary injunction  issued  upon  filing  of  the  bill  and  was  subse- 
quently discharged.  An  appeal  was  taken  to  the  Court  of 
Appeals  and  it  was  dismissed  for  want  of  jurisdiction  and  a 
final  judgment  was  thereafter  entered  in  the  Circuit  Court 
dismissing  the  bill.  The  inquiry  of  the  Supreme  Court,  after 
deciding  that  a  defense  of  res  adjudicata  could  not  be  made 
available  upon  motion  to  dismiss  on  appeal,  turned  to  the 
questions  certified  upon  the  subject  of  jurisdiction  by  the 
Circuit  Court  which  were:  (1)  of  diversity  of  citizenship; 
(2)  of  a  question  arising  under  the  Constitution  and  laws  of 
the  United  States;  and  (3)  whether  jurisdiction  was  vested  by 
the  fact  that  the  suit  was  against  the  State  although  nominally 
against  an  individual  by  name,  in  violation  of  the  Eleventh 
Amendment  to  the  Constitution.  It  was  held  that  jurisdiction 
is  the  right  to  put  the  wheels  of  justice  in  motion,  and  to 
proceed  to  the  final  determination  of  the  cause  upon  the  plead- 
ings and  evidence,  and  that  it  exists  in  the  Circuit  Courts 
where  the  plaintiff  is  a  citizen  of  one  State,  the  defendant  a 
citizen  of  another,  if  the  requisite  jurisdictional  amount  exists 
and  the  defendant  is  properly  served  with  process  within  th(^ 
district;  that  the  averments  of  the  bill  presented  a  case  und(M- 
the  Constitution  of  the  United  States  and  jurisdiction  might 
be  sustained  upon  that  ground  alone,  and  that  as  to  the  third 
point  the  question  raised  was  a  defense  to  the  merits  rather 
than  to  the  jurisdiction  of  the  court.  It  was  further  decided 
152 


JURISDICTION    AM)    VENUE — DEFINITIONS  §  84 

that  a  failure  to  allege  a  compliance  with  tlu;  ninety-fourth  rule 
in  equity,  concerning  hills  brought  by  stockholders  of  corpora- 
tions against  the  corporation  and  other  parties,  did  not  raise  a 
question  of  jurisdiction,  but  of  the  authority  of  plaintiff  to 
maintain  his  bill.*^  In  a  Louisiana  case  of  mandamus  by  a 
stockholder  to  enforce  the  right  to  inspect  the  books  of  a  cor- 
poration, the  court  defines  jurisdiction  in  connection  with  the 
exercise  of  judicial  functions,  the  extent  of  the  powers  con- 
ferred and  requisite  thereto  as  well  as  the  limitations  thereon.^* 

§  84.  "  General  Jurisdiction  in  Law  and  Equity  "  De- 
fined. 

Where  a  State  Supreme  Court  is  vested  by  the  Constitution 
with  "general  jurisdiction  in  law  and  equity"  the  term  ''juris- 

17  Illinois  Central  Rd.  Co.  v.  Adams,  180  U.  S.  28,  45  L.  ed.  210,  21  Sup. 
Ct.  251. 

18  State  ex  rel.  Watkins  v.  North  American  Land  &  Timber  Co.,  Ltd., 
106  La.  621,  631,  31  So.  172,  87  Am.  St.  Rep.  309,  per  Monroe,  J.,  who  gives 
the  following  definition:  "Jurisdiction,  however,  when  considered  in  con- 
nection with  the  exercise  of  judicial  functions,  'includes  the  power  to  com- 
pel a  person  to  appear  and  answer  a  complaint  or  to  punish  him  for  not 
doing  so ;  the  power  to  take  property  in  dispute  into  the  custody  of  the  law ; 
the  power  to  compel  the  production  of  evidence  and  hear  the  contention  of 
parties;  the  power  to  determine  the  question  of  right  between  parties  and 
to  enforce  the  determination'  (Cent.  Diet.,  Verbo  'Jurisdiction').  And, 
where  there  is  a  lack  of  power  in  either  of  the  directions  mentioned,  whether 
because  intentionally  withheld  or  because  of  the  incapacity  of  the  grantor 
to  confer  it,  the  jurisdiction  may  be  said  to  be  limited  in  the  one  case,  and 
incomplete  or  inadequate,  in  the  other.  Thus,  the  power  to  hear  may  be 
granted  and  the  power  to  determine  withheld,  or  the  power  to  hear  and 
determine  may  be  granted  and  the  power  to  enforce  the  determination 
withheld,  or  the  power  to  hear,  determine  and  enforce  may  be  conferred, 
but  restricted  to  particular  litigants  or  subjects,  and  tlie  jurisdiction  may  be 
properly  exercised  to  the  hmit  prescribed  with  the  effect  of  fully  accom- 
plishing the  purpose  for  wliich  it  is  conferred.  But  where,  from  the  terms  of 
the  grant,  it  is  evidently  the  intention  to  confer  jurisdiction  witiiout  limit 
as  to  persons  or  subject-matter,  or  to  confer  complete  jurisdiction,  within 
certain  hmits,  and  the  exercise  of  all  the  power  intended  to  be  conferred  is 
necessary  in  order  that  the  purposes  of  the  grant  may  be  accomplished, 
but  it  happens  that  the  grant  falls  short,  in  an  essential  particular,  by 
reason  of  want  of  power  in  the  grantor,  it  follows  that  the  jurisdiction,  as 
conferred,  is  incomplete  or  inadequate,  and  the  question  arises  whether  if, 
in  a  i)articular  case,  tlie  jr.irposos  of  the  grant  cannot  thereby  be  accom- 
plislu'd,  such  jurisdiction  should  be  exei-cised  at  all." 


§§  85,  86      JURISDICTION    AND   VENUE — DEFINITIONS 

diction"  means  every  kind  that  a  court  can  possess,  of  the 
person,  subject-matter,  territory,  and  generally  the  power  of 
the  court  in  the  discharge  of  its  judicial  duties.  Its  jurisdiction 
is  coextensive  with  the  State  boundaries  over  every  person, 
natural  and  artificial,  within  the  same,  and  although  the  State 
is  divided  into  districts  the  court  in  each  district  is  the  Supreme 
Court  of  the  State  and  each  has  the  same  power,  no  more  no 
less  than  the  other.  This  power  cannot  be  taken  away  in  one 
district  by  the  State  legislature,  and  any  such  attempt  so  to  do 
is  unconstitutional  and  void.^**  Where  a  District  Court  of  a 
State  is  invested  by  its  Constitution  with  general  equity  juris- 
diction such  jurisdiction  can  neither  be  taken  away  or  im- 
paired by  the  legislature .^^^ 

§  85.  "  Full  Jurisdiction  in  all  Matters  of  Equity  "  De- 
fined. 

Where  a  Chancery  Court  is  given  "full  jurisdiction  in  all 
matters  of  equity,"  the  words  imply  that  nothing  is  reserved; 
whatever  is  a  matter  of  equity,  as  to  that,  the  power  to  ad- 
judge is  full;  the  court  is  granted  capacity  to  fully  administer 
it;  where  the  court  takes  hold  of  a  subject-matter  it  ought  to 
dispose  of  it  fully  and  finally.'^ 

§  86.  Concurrent  Jurisdiction  Defined. 

In  a  case  of  proceedings  under  the  law  of  eminent  domain 
for  the  condemnation  of  land  for  a  railroad  right  of  way, 
where  there  was  a  question  of  the  concurrent  jurisdiction  of  Cir- 
cuit and  City  Courts,  concurrent  jurisdiction  was  defined  as  that 

»9  Mussen  v.  Au  Sable  Granite  Works,  18  N.  Y.  Supp.  267,  268,  63  Hun, 
367.  In  this  case  an  action  was  brought  to  enforce  a  lien  given  by  statute 
against  certain  funds  in  the  treasury  of  the  city  of  New  York,  alleged  to  be 
due  and  belonging  to  defendant;  demurrer  to  jurisdiction. 

20  Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  Cass  County,  51  Neb.  369, 
70  N.  W.  955. 

21  Bank  of  Mississippi  v.  Duncan,  52  Miss.  740,  a  suit  in  chancery  by 
creditors  of  a  bank  claiming  waste  and  misapplication  of  assets;  the  power 
of  equity  to  appoint  receivers  and  to  compel  them  to  pay  funds  into  court; 
also  the  power  of  the  coiu-t  to  retain  bill  to  repair  wrong  after  it  decides 
that  it  cannot  grant  relief  and  dismisses  bill. 

154 


JURISDICTION    AND    VIONUE — DEFINITIONS  §  87 

exercised  by  different  courts  at  the  same  time  over  the  same 
subject-matter,  within  the  same  territory,  and  whc^rein  litigants 
may,  in  the  first  instance,  resort  to  either  court  indifferently. 
And  also,  that  it  means  equal  power  and  authority  with  another 
court  to  hear  and  determine  all  cases  of  a  class  specified  within 
the  scope  of  the  statute,  granting  such  jurisdiction,  which  arise 
within  the  territorial  limits  prescribed.^^ 

§  87.  Jurisdiction  in  "  Special  Cases  "  Defined  and  Con- 
strued. 

Where  the  Constitution  of  a  State  permits  the  legislature  to 
confer  on  a  County  Court  jurisdiction  in  ''special  cases"  it  is 
not  intended  thereby  to  include  any  class  of  cases  of  which  the 
courts  of  general  jurisdiction  have  always  supplied  a  remedy, 
and  the  words  must  be  confined  to  such  new  cases  as  are  the 
creation  of  statutes,  and  the  proceedings  under  which  are  un- 
known to  the  general  framework  of  courts  of  common  law  and 
equity.  The  action  to  prevent  or  abate  nuisances  is  not  one  of 
these  where  it  is  amply  provided  for  in  the  courts  of  general 
jurisdiction.  This  is  so  held  in  an  action  to  recover  damages 
to  plaintiff's  land  by  reason  of  the  overflow  of  defendant's 
canal,  and  a  motion  was  made  to  dismiss  the  case  for  want  of 
jurisdiction  which  was  sustained .^^  In  another  case  a  corpora- 
tion filed  with  a  county  judge  a  petition  for  the  condemnation 
of  water,  and  for  the  right  of  way  over  defendant's  land  for  con- 
ducting the  same,  and  it  was  declared  that  the  power  to  hear 
and  determine  a  special  case  was  judicial  power  and  its  nature 
or  character  was  not  changed  in  any  respect  by  the  fact  that 
the  Constitution  did  not  assign  it  to  some  specified  court,  as  it 
did  the  jurisdiction  of  most  of  the  cases  at  law  and  in  equit}^, 
and  it  was  held  that  county  courts  were  vested  with  jurisdiction 
in  "special  cases"  in  the  absence  of  a  statute  conferring  it  upon 
other  courts  and  that  the  legislature  could  confer  such  juris- 
diction upon  District  and  County  Courts,  but  not  upon  a  county 

»  Hercules  Iron  Works  v.  Elgin,  Joliet  &  Eastern  Ry.  Co.,  141  111.  491, 
498,  30  N.  E.  1050. 

23  Parsons  v.  Tviolurane  County  Water  Co.,  5  Cal.  43,  6  Am.  Dec.  76. 

155 


§  88  JURISDICTION    AND    VENUE — DEFINITIONS 

judge  or  upon  any  tribunal  or  officer  other  than  one  of  the 
courts  specified  in  the  Constitution.^'* 

§  88.  Subject-Matter  and  Jurisdiction  Over  It  Defined. 

In  a  cause  of  action  to  enforce  mechanics'  liens  upon  all  the 
property  of  a  mining  company  where  an  intervenor  claimed  a 
lien  upon  a  part  of  the  property  only,  and  an  order  of  sale  was 
made  of  the  entire  property,  directing  a  pro  rata  distribution, 
it  was  contended  by  counsel  that,  considered  as  one  suit,  there 
was  jurisdiction  of  the  subject-matter  and  that  the  order  of 
sale  was  therefore  not  void  though  irregular.  The  court  de- 
fined subject-matter  as  that  which  is  offered  for  judicial  de- 
cision, and  declared  that  the  subject-matter  of  the  intervenor's 
petition  was  not  the  particular  mining  lode  but  his  claim  of  lien 
upon  that  lode;  that  the  subject-matter  of  the  petitions  of  the 
other  lien  claimants  was  not  the  property  mentioned  in  their 
petitions,  but  their  claims  of  lien  upon  such  property;  "counsel, 
therefore,  assume  that  which  is  contested  when  they  say  the 
court  had  jurisdiction  of  the  subject-matter.  The  question  is 
whether,  on  the  case  before  the  court,  the  action  of  the  court 
was  judicial  or  extrajudicial— with  or  without  authority  of 
law.  *  *  *  A  claim  of  lien  by"  the  intervenor  "upon  all 
the  property  of  the  defendant  company  was  not  a  matter 
presented  by  any  petition  before  the  court.  It  was  not,  there- 
fore, and  could  not  be,  the  subject  of  an  order  or  decree.  Had 
such  a  lien  been  decreed,  it  would  have  been  void.  A  fortiori 
the  order  of  sale  is  void."  ^^    In  a  West  Virginia  case,  jurisdic- 

i!4  Spencer  Creek  Water  Co.  v.  Vallejo,  48  Cal.  70,  cited  in  Chollar  Mining 
Co.  V.  Wilson,  66  Cal.  374,  377,  an  application  for  a  writ  of  prohibition 
against  proceedings  for  removal  of  corporate  officers. 

25  Bassick  Mining  Co.  v.  Schoolfield,  10  Cblo.  46,  51,  14  Pac.  65.  The 
court,  per  Elbert,  J.,  also  said:  "Had  Armstrong"  (the  intervenor)  "been 
the  only  lien  claimant,  and  his  petition  the  only  petition  before  tlie  court  for 
consideration,  it  is  entirely  plain  that,  while  the  court  had  jurisdiction  of 
the  subject-matter  of  the  petition,  it  had  no  power  or  authority  to  order  a  sale 
of  property  other  than  that  mentioned  in  the  petition,  and  upon  which  a 
lien  had  been  decreed.  Its  jurisdiction  was  not  invoked  with  respect  to  a 
claim  of  lien  upon  any  other  property,  nor  could  it  attach  to  any  property 
other  than  that  mentioned  in  the  petition.  *  *  *  Wg  think  it  equal!}' 
plain  that  the  defect  of  jurisdiction  which  we  have  pointed  out  was  not 

156 


JURISDICTION    AND    VENUE — DEFINITIONS  §  89 

tion  over  the  subjoct-niatter  is  defined  as  meaning  the  nature 
of  the  cause  of  action  and  of  the  relief  sought ;  that  this  is  con- 
f(>rred  by  th(>  sov(>reign  authority  which  organizes  the  court, 
and  is  to  be  sought  for  in  the  general  character  of  its  powers, 
or  in  authority  specially  conferred.  The  cause  of  action  was 
against  an  insurance  company  to  recover  the  entire  amount  of 
money  found  due  on  the  adjustment  of  a  fire  loss,  to  which 
action  the  insurer  set  up  the  defense  of  payment  of  a  portion 
of  the  money  under  a  foreign  judgment  and  order  made  in 
garnishment  proceedings.  It  appeared,  however,  that  such 
judgment  was  based  upon  a  contract  void  as  to  the  insured. 
It  was  held  that  the  court  of  another  State  had  not  the  ])ower, 
without  service  of  process  or  voluntary  appearance,  to  render 
a  judgment  on  a  contract  absolutely  void  in  the  State  where 
made,  and  that  if  such  a  void  contract  is  sued  on  by  a  foreign 
attachment  in  a  foreign  jurisdiction,  the  garnishee  must  make 
defense  to  the  action  or  notify,  if  practicable,  his  absent  creditor 
of  the  pendency  of  the  attachment  proceedings,  that  such 
creditor  may  make  a  defense,  otherwise  a  judgment  rendered 
by  default  will  not  protect  the  garnishee  when  sued  by  his 
creditor.^^ 

§  89.  Definitions — "  Civil  "  and  "  Criminal  "  Jurisdiction 
— "  Further  Civil  and  Criminal  Jurisdiction." 

The  terms  "civil"  and  "criminal"  when  used  either  in 
reference   to   jurisdiction    or   judicial    proceedings   generally, 

cured  by  the  fact  that  jurisdiction  of  the  court  had  attached  to  all  the  prop- 
erty under  and  by  virtue  of  the  petitions  of  the  other  lien  claimants.  Their 
petitions  did  not  invoke  the  jurisdiction  of  the  court  in  respect  to  the  Arm- 
strong claim.  We  do  not  see  that  the  court  had  any  greater  or  different 
jurisdiction  than  if  the  subject-matter  of  each  petition  had  been  tried  and 
adjudicated  separately.  The  same  fundamental  principles  fix  the  limits 
of  tl^e  power  and  authority  of  the  court  in  the  one  case  as  in  the  other." 
The  effect  of  Gen.  Stat.,  §  2155,  providing  that  "judgment  is  to  be  rendered 
according  to  the  rights  of  the  parties"  and  each  party  is  to  have  a  lien  es- 
tablished and  determined  in  said  decree  "upon  the  property  to  which  his 
lien  shall  have  attached  "  was  also  considered  as  another  reason  for  the  de- 
cision as  rendered. 

2«  Stewart  v.  Northern  Assurance  Co.,  45  W.  Va.  734,  740,  44  L.  R.  A. 
104,  .'52  S.  E.  218;  McWhorter,  J.,  in  giving  the  above  definition  quotes  from 
Cooper  V.  Reynolds,  10  Wall.  (77  U.  S.)  308,  316,  19  L.  ed.  931. 

157 


§  89  JURISDICTION    AND    VENUE — DEFINITIONS 

have  respect  to  the  nature  and  form  of  the  remedy  and  the 
cause  of  action  or  occasion  for  instituting  legal  proceedings. 
A  competent  court  for  the  prosecution  of  either  class  of  actions 
is  one  having  lawful  jurisdiction;  and  civil  jurisdiction  simply 
means  jurisdiction  to  hear  and  determine  civil  actions.  To 
enlarge  the  civil  jurisdiction  of  that  class  of  actions  is  merely 
to  give  jurisdiction  over  other  actions  for  the  recovery  of  a 
right  or  the  redress  of  a  wrong  and  has  no  respect  whatever 
to  the  territorial  limit  of  the  jurisdiction  over  persons.  When 
a  Constitution  speaks  of  "further  civil  and  criminal  jurisdic- 
tion" it  has  respect  to  the  object  of  the  jurisdiction  and  not  to 
the  territory  or  persons  of  suitors.  When,  therefore,  a  State 
Constitution  continues  certain  local  courts,  then  in  existence 
in  cities,  with  the  powers  and  jurisdiction  then  possessed  by 
them,  "and  such  further  civil  and  criminal  jurisdiction  as  may 
be  conferred  by  law"  the  words  have  respect  to  the  object  of 
the  jurisdiction  and  not  to  the  territory  or  the  persons  of  the 
suitors,  and  the  power  conferred  upon  the  legislature  is  to 
enlarge  the  then  jurisdiction  over  subjects  and  matters  civil 
and  criminal  in  their  nature  and  the  proper  subjects  of  civil  and 
criminal  prosecutions.  The  authority  given  is  to  enlarge  their 
jurisdiction  as  local  courts,  not  to  create  new  courts  with  gen- 
eral jurisdiction  throughout  the  State.  When  a  jurisdiction  is 
spoken  of,  it  has  not  respect  to  the  residence  of  the  plaintiff, 
but  the  subject-matter  and  cause  of  action  and  the  person  of  de- 
fendant ;  and  the  jurisdiction  of  these  local  courts  is  limited  to 
causes  of  action  arising  within  the  territorial  limits  of  the 
tribunal  or  to  cases  in  which  the  party  proceeded  against 
resides  in  or  is  served  with  process  within  the  jurisdiction. 
Jurisdiction  cannot  be  conferred  upon  them  based  simply  upon 
the  fact  that  the  plaintiff  is  domiciled  in  or  casually  chances 
to  be  within  the  locality.  It  was,  therefore,  decided  that  a 
City  Court,  under  such  provision  of  the  Constitution,  had  no 
jurisdiction  of  an  action  against  a  corporation  for  negligence 
as  a  common  carrier,  where  the  cause  of  action  arose  and  the 
business  of  the  corporation  was  transacted,  and  its  officers 
located  outside  of  the  city  constituting  the  jurisdictional 
158 


JURISDICTION    AND    VENUE — DEFINITIONS  §  89 

limits,  and  that  statutes  attempting  to  give  such  jurisdiction 
were  unconstitutional  and  void.^^ 

27  Landers  v.  Staten  Island  R.  Co.,  53  N.  Y.  450,  cited  in  Worthington  v. 
London  Guarantee  &  Accident  Co.,  1G4  N.  Y.  81,  89,  31  Civ.  Pro.  282,  58 
N.  E.  102;  Matter  of  City  of  Buffalo,  139  N.  Y.  422,  427,  34  N.  E.  1103,  54 
N.  Y.  St.  R.  1103;  McCann  v.  Gerding,  60  N.  Y.  Supp.  467,  470,  29  Misc. 
288;  Irwin  v.  Metropolitan  St.  Ry.  Co.,  57  N.  Y.  Supp.  19,  22,  38  App.  Div. 
255,  6  Ann.  Cas.  376;  Tobias  v.  Perry,  54  N.  Y.  Supp.  716,  719,  25  Misc.  78; 
Weidman  v.  Sibley,  44  N.  Y.  Supp.  1057,  1059,  16  App.  Div.  619;  Ziegler  v. 
Corwin,  42  N.  Y.  Supp.  855,  862,  12  App.  Div.  71;  Pierson  v.  Fries,  38  N.  Y. 
Supp.  765,  766,  3  App.  Div.  420. 

Jurisdiction  of  New  York  municipal  court,  see  the  following  cases:  Erkins 
v.  Tucker,  115  N.  Y.  Supp.  256  (no  equity  jurisdiction);  American  Mfg. 
Co.  V.  Weintraub,  115  N.  Y.  Supp.  88  (allegation  not  demurrable  for  want 
of  jurisdiction  in  averring  that  plaintiff  is  a  foreign  corporation  and  not 
showing  defendants  are  residents  of  city);  Rothstein  v.  Brooklyn  Heights 
R.  Co.,  114  N.  Y.  Supp.  344  (in  case  of  action  for  personal  injuries  caused 
by  being  struck  by  a  street  car  conductor,  when  plaintiff  not  a  passenger, 
no  jurisdiction  under  Municipal  Court  Act,  Laws  1902,  p.  1499,  c.  580,  §  1, 
eubdv.  14);  Woodward  Lumber  Co.  v.  General  Supply  &  Construction  Co., 
113  N.  Y.  Supp.  628,  60  Misc.  367  (in  action  by  foreign  corporation  to  re- 
cover money  judgment  only  City  Court  of  New  York  has  jurisdiction  under 
Code  Civ.  Proc,  §  315,  subdv.  1);  Telzer  v.  Brooklyn  Elevated  Rd.  Co., 
113  N.  Y.  Supp.  18,  61  Misc.  59  (no  jurisdiction  of  action  for  mahcious  pros- 
ecution, even  though  joined  with  another  action  over  which  jurisdiction 
exists;  under  Municipal  Court  Act,  §  1,  subdv.  14,  Laws  1902,  p.  1489, 
chap.  580) ;  Miller  v.  Brooklyn  Heights  Rd.  Co.,  Ill  N.  Y.  Supp.  47,  127  App. 
Div.  197  (case  of  refusal  of  passenger  to  pay  fare  and  attempt  to  eject  her; 
action  held  to  be  for  battery  and  court  without  jurisdiction);  Edwards  v. 
Greenwich  Savings  Bk.,  110  N.  Y.  Supp.  920,  59  Misc.  451  (when  City  Court 
without  jurisdiction  in  action  on  savings  bank  account  by  the  transferee 
of  book  and  bank  sets  up  judgment  setting  aside  transfer,  even  though 
equitable  defenses  available);  EbUng  Brewing  Co.  v.  Nimphins,  109  N.  Y. 
Supp.  808,  58  Misc.  545  (case  of  nonequitable  jurisdiction  of  proceedings  to 
redeem  leased  premises);  Baumstein  v.  New  York  City  Ry.  Co.,  107  N.  Y. 
Supp.  23,  56  Misc.  498  (aggravated  assault  by  street  car  conductor  upon 
passenger  and  latter's  arrest;  court  has  jurisdiction);  Leyden  v.  Brooklyn 
Heights  Rd.  Co.,  106  N.  Y.  Supp.  769,  122  App.  Div.  383  (has  jurisdiction 
of  case  for  damages  sustained  through  negligence  of  company  in  causing 
injuries  to  wife  and  consequent  loss  of  personal  services);  Jacobs  v.  Colum- 
bia Storage  Warehouse,  105  N.  Y.  Supp.  276,  55  Misc.  268  (action  to  recover 
personal  property,  under  conditional  sale,  brought  by  assignee  claiming 
lien  for  storage  against  buyer;  no  jurisdiction);  Schwartz  v.  Interborough 
Rapid  Transit  Co.,  103  N.  Y.  Supp.  80,  53  Misc.  289  (action  for  assault  and 
battery  by  company's  servant;  no  jurisdiction;  otherwise,  where  cause  of 
action  and  assault  arose  from  violation  of  defendants'  contract  to  carry 
safely);  Gormley  v.  Brooklyn  Heights  Rd.  Co.,  102  N.  Y.  Supp.  692,  52 

159 


§§  90,  91       JURISDICTION   AND   VENUE — DEFINITIONS 

§  90.  Jurisdiction  as  Applied  to  a  State,  or  to  City  Council. 

Jurisdiction  as  applied  to  a  State,  signifies  the  authority  to 
declare,  and  the  power  to  enforce  the  law,  as  well  as  the  terri- 
tory within  which  such  authority  and  power  may  be  exercised. 
The  jurisdiction  of  a  State  is  coextensive  with  its  sovereignty .^^ 
Where  a  statute  provides  that  "the  city  council  shall  be  deemed 
to  have  acquired  jurisdiction  to  order  "  certain  work  in  streets 
and  alleys  to  be  done,  the  term  "jurisdiction,"  implies  that  the 
person  or  tribunal  which  has  "acquired"  it,  is  thereby  empow- 
ered to  declare  or  establish  an  enforceable  charge  or  liability 
against  the  person  or  subject  over  which  it  has  been  acquired.^^ 

§  91.  Venue  Defined. 

Venue  is  defined  as  locality,  neighborhood;  place  of  trial; 
county.  The  county  where  a  cause  is  to  be  tried.  The  clause 
in  a  declaration  or  indictment  which  states  the  place  where  the 
transaction  was  had,  the  injury  inflicted  or  the  crime  com- 
mitted. Originally  a  venue  was  employed  to  indicate  the 
county  from  which  the  jury  was  to  come.^" 

Misc.  495  (case  of  refusal  of  street  railroad  company  to  give  transfer,  action 
for  penalty  and  where  action  to  be  brought;  no  conflict  between  Code  Civ. 
Proc,  §§  983,  991,  and  Municipal  Court  Act,  Laws  1902,  p.  1496,  chap.  580, 
§  20,  Id.,  p.  1498,  §  1,  subdv.  7  (p.  1488). 

28  Sanders  v.  St.  Louis  &  New  Orleans  Anchor  Line,  97  Mo.  26,  10  S.  W. 
595,  3  L.  R.  A.  390.  A  case  of  action  for  death  caused  by  negligence  of  a 
corporation  of  Missouri  instituted  by  a  resident  of  that  State ;  the  deceased 
was  drowned  on  the  Mississippi  River  between  Illinois  and  Missouri  while 
the  boat  was  at  the  Illinois  shore.  It  was  held  that  the  Missouri  courts  had 
jurisdiction.  But  examine  Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  Cass 
County,  51  Neb.  369,  70  N.  W.  955. 

29  Santa  Cruz  Rock  Pavement  Co.  v.  Broderick,  113  Cal.  628,  634,  45  Pac. 
863  (a  case  of  street  paving  contract,  and  authority  of  a  board  of  super- 
visors and  limitations  thereon). 

30  Aijderson's  Diet,  of  Law. 

For  other  definitions  of  venue  see  the  following  cases: 

Massachusetts:   Briggs  v.  Nantucket  Bank,  5  Mass.  94,  96. 

Mic/n>m.- Sullivan  v.  Hull,  86  Mich.  7, 13, 48  N.  W.  646, 647, 13  L.  R.  A.  556. 

Nevada:  State  v.  McKinney,  5  Nev.  194,  198,  199. 

New  York:  Bangs  v.  Selden,  13  How.  Pr.  (N.  Y.)  374,  377;  Moore  v. 
Gardner,  5  How.  Pr.  (N.  Y.)  243. 

Texas:  Armstrong  v.  Emmet,  16  Tex.  Civ.  App.  242,  244.  41  S.  W.  87. 

Utah:  Konold   v.  Rio  Grande  Western  Ry.  Co.,  16  Utah,  151,  156,   51 
Pac.  256,  257. 
100 


SUPERVISORY   BODIES — GENERALLY 


92 


CHAPTER  VIII 

JURISDICTION    OR    POWER    OF    CORPORATION    SUPERVISORY 
BODIES — GENERALLY 


92.  Jurisdiction  or  Power  of  Su- 

pervisory Bodies  or  Agen- 
cies— Delegation  of  Power 
— Generally. 

93.  Jurisdiction  of  Power  of  Su- 

pervisory Bodies  or  Agen- 
cies— Delegation  of  Power 
— General  Instances. 

94.  Jurisdiction  or  Powers  of  As- 

sessment Board — Railroads 
— Due  Process  of  Law — In- 
terstate Commerce. 

95.  Jurisdiction  or  Power  of  Su- 

pervisors, Aldermen  or 
Other  Legislative  Bodies  of 
Cities,  Towns,  etc.,  as  to 
Water   Rates — Mandamus. 

96.  Powers  of  Municipality — Rail- 

road Commission  and  Bor- 
ough President — L  a  y  i  n  g 
Electric  Lines — Repaving 
by  Street  Railroad. 


97.  Powers  of  Commission  as  to 
Standard  Fire  Policy. 

99.  Jurisdiction  or  Powers  of 
Court  of  Visitation — Tele- 
graph and  Railroad  Lines. 

99.  Powers  of  Secretary  of  Agri- 
cultiu-e  —  Regulation  of 
Commerce —  Quarantine 
Regulations. 

100.  Secretary  of  Commerce   and 

Labor — Enforcement  by, 
Without  Judicial  Trial,  of 
Penalty  of  Transportation 
Company  —  Notice  and 
Hearing — Civil  and  Crimi- 
nal Action. 

101.  Power  of  Secretary  of  State — 

Reinsurance  Contract. 

102.  Special      Tribimal — "Special 

Commission "  to  Hear  and 
Adjudicate,  Not  a  "Court" 
— Gas  and  Electric  Plant. 


§  92.  Jurisdiction  or  Power  of  Supervisory  Bodies  or 
Agencies — Delegation  of  Power — Generally. 

Ill  the  execution  of  the  power  to  regulate  commerce  Congress 
may  employ,  as  instrumentalities,  corporations  created  by  it 
or  by  the  States.^  The  legislature  may  also  properly  designate 
any  agency  it  deems  proper  within  the  State,  reasonably 
calculated  to  act  justly  in  the  matter,  to  nominate  persons  for 
appointment  to  administer  police  regulations.^  So  the  State 
may  transfer  its  reserved  police  power  from  one  set  of  func- 

1  Cherokee  Nation  v.  Southern  Kansas  Ry.  Co.,  135  U.  S.  641,  34  L.  ed. 
295,  10  Sup.  Ct.  965. 

2  State  ex  rel.  Milwaukee  Medical  College  v.  Cliittenden,  127  Wis.  468, 
10  N.  W.  500. 

11  161 


§  93  JURISDICTION   OR   POWER   OF   CORPORATION 

tionaries  to  another  by  requiring  electrical  companies  to  submit 
plans,  etc.,  to  the  latter  for  constructing  electrical  conduits  or 
subways.^  Where  a  statute  acts  on  a  subject  as  far  as  practica- 
ble and  only  leaves  to  executive  officials  the  duty  of  bringing 
about  the  result  pointed  out  and  provided  for,  it  is  not  uncon- 
stitutional as  vesting  executive  officers  with  legislative  powers.'* 
So  a  distinction  exists  between  the  power  to  make  a  law,  which 
involves  a  discretion  as  to  what  that  law  shall  be,  and  employ- 
ing an  agency  which  is  empowered  to  exercise  a  discretion 
in  determining  when  the  law  as  enacted  shall  be  enforced,  or  to 
determine  questions  of  fact  essential  to  the  application  of  the 
law;  the  power  to  legislate  which  is  vested  in  the  State  cannot 
be  delegated;  the  administrative  duties  in  carrying  out  legis- 
lative powers  may  be  delegated.^ 

§  93.  Jurisdiction  of  Power  of  Supervisory  Bodies  or 
Agencies— Delegation  of  Power— General  Instances. 

Judicial  power  is  not  unconstitutionally  conferred  on  a 
State  board  of  control  to  adjudicate  priority  of  water  rights 
with  the  right  of  appeal,  as  such  board  is  an  administrative  one.^ 
A  State  statute  may  also  require  each  surveyor  general  to 
survey  all  logs  and  timbers  running  out  of  any  boom,  chartered 
or  to  be  chartered  by  law  in  his  district,  and  such  enactment 
refers  to  corporations  organized  under  general  law  or  by  special 
actJ    So  power  may  be  delegated  to  a  municipal  corporation 

3  New  York  v.  Squire,  145  U.  S.  175,  12  Sup.  Ct.  880,  36  L.  ed.  666. 

4  Buttfield  V.  Stranahan,  192  U.  S.  470,  24  Sup.  Ct.  349,  48  L.  ed.  252; 
Field  V.  Clark,  143  U.  S.  649,  12  Sup.  Ct.  495,  36  L.  ed.  294.     . 

5  United  States  v.  Union  Bridge  Co.,  143  Fed.  377;  People  v.  Grand  Trunk 
Ry.  Co.,  232  111.  292,  297,  83  N.  E.  839,  per  Carter,  J.,  quoting  Sutherland 
on  Statutory  Construction,  p.  611. 

6  Farm  Investment  Co.  v.  Carpenter,  9  Wyo.  110,  61  Pac.  258,  87  Am. 
St.  Rep.  918,  50  L.  R.  A.  747. 

As  to  delegation  to,  extent  of  jurisdiction  or  power  of,  and  enumeration 
of  subordinate  bodies  or  agencies  to  whom  delegated,  see  Joyce  on  Fran- 
chises, §§  147-170;  as  to  delegation  of  power  to  and  by  courts,  see  Id., 
§§  171-184;  as  to  delegation  of  power — quasi-municipal  and  subordinate 
agencies,  see  Id.,  §§  185-205. 

7  Lindsay  &  Phelps  Co.  v.  Mullen,  176  U.  S.  126,  20  Sup.  Ct.  325,  44  L. 
ed.  400. 

1G2 


SUPERVISORY   BODIES — GENERALLY  §  94 

to  regulate  charges  of  coiniiion  carriers  to  the  city."  A  State 
may  also,  through  the  instrumentality  of  a  city  council,  ap- 
portion the  burden  of  repairs  for  a  viaduct  crossing  several 
railroads."  The  authority  of  a  borough  council  to  consent  to 
the  location  of  electric  street  railway  tracks  upon  notice  as 
required  by  statute  is  not  a  judicial  but  a  legislative  act.^*' 
And  a  delegation  to  a  supervisor  of  building  and  loan  associa- 
tions confers  neither  legislative  nor  judicial  power.^^  An 
agreement  of  the  commissioners  of  the  sinking  fund  of  a  city 
and  the  city  attorney  with  certain  banks,  trust  companies, 
etc.,  including  the  bank  of  the  city,  that  the  rights  of  those 
institutions  should  abide  the  results  of  test  suits  to  be  brought 
is  dehors  the  power  of  said  commissioners  and  said  attorney, 
and  a  decree  in  such  test  suit  docs  not  constitute  res  judicata 
as  to  those  not  actually  parties  to  the  record .^^ 

§  94.  Jurisdiction   or   Powers   of   Assessment   Board — 
Railroads — Due  Process  of  Law — Interstate  Commerce. 

A  State  statute  giving  a  State  assessment  board  power  to 
correct  valuations,  naming  a  time  and  place  at  which  any  per- 
son interested  may  be  heard,  does  not  deprive  the  persons 
assessed  of  their  property  without  due  process  of  law  because 
those  parties  do  not  have  further  opportunities  to  be  heard 
by  a  court  or  the  legislature.^^ 

If  an  assessing  board,  seeking  to  assess  for  purposes  of  taxa- 

s  Chicago  Union  Traction  Co.  v.  City  of  Chicago,  199  111.  484,  50  L.  R.  A. 
631,  05  N.  E.  451. 

»  (Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  Nebraska,  170  U.  S.  57. 

10  State  V.  West  Jersey  Traction  Co.,  62  N.  J.  L.  386,  41  Atl.  946,  aff'g 
61  N.  J.  L.  470,  39  Atl.  681,  10  Am.  &  Eng.  R.  Cas.  (N.  S.)  323. 

Ji  Preferred  Tontine  Mercantile  Co.  v.  Nevada,  199  U.  S.  613,  50  L.  ed. 
334,  26  Sup.  Ct.  748,  dismissing  184  Mo.  160,  82  S.  W.  1075. 

12  Louisville  v.  Bank  of  Louisville,  174  U.  S.  439,  43  L.  ed.  1039,  19  Sup.  Ct. 
753,  affirming  and  applying  Stone  v.  Bank  of  Commerce,  174  U.  S.  412,  19 
Sup.  Ct.  747,  43  L.  ed.  1028;  Citizens'  Savings  Bank  of  Owensboro  v. 
Owensboro,  173  U.  S.  636,  19  Sup.  Ct.  530,  571,  43  L.  ed.  840. 

13  Michigan  Central  R.  Co.  v.  Powers,  201  U.  S.  245,  50  L.  ed.  744,  26  Sup. 
Ct.  459,  aff'g  138  Fed.  223. 

When  duties  imposed  on  tax  collector  are  unconstitutional  delegation  of 
power,  see  Cleveland,  Cincinnati  &  St.  Louis  Ry.  Co.  v.  The  People,  212  111. 
638,  72  N.  E.  725. 

163 


§  95  JURISDICTION    OR   POWER   OF   CORPORATION 

tion  a  part  of  a  railroad  within  a  State,  the  other  part  of  which 
is  in  an  adjoining  State,  ascertains  the  value  of  the  whole  line 
as  a  single  property  and  then  determines  the  value  of  that 
within  the  State,  upon  the  mileage  basis,  that  is  not  a  valuation 
of  property  outside  of  the  State;  and  the  assessing  board,  in 
order  to  keep  within  the  limits  of  State  jurisdiction,  need  not 
treat  the  part  of  the  road  within  the  State  as  an  independent 
line,  disconnected  with  the  part  without,  and  place  upon  that 
property  only  the  value  which  can  be  given  to  it  if  operated 
separately  from  the  balance  of  the  road.  And  where  an  assess- 
ing board  is  charged  with  the  duty  of  valuing  a  certain  number 
of  miles  of  railroad  within  a  State  forming  part  of  a  line  of  road 
running  into  another  State,  and  assesses  those  miles  of  road  at 
their  actual  cash  value  determined  on  a  mileage  basis,  this 
does  not  place  a  burden  upon  interstate  commerce,  beyond 
the  power  of  the  State,  simply  because  the  value  of  that  rail- 
road as  a  whole  is  created  partly — and  perhaps  largely — by  the 
interstate  commerce  which  it  is  doing.^^ 

§  95.  Jurisdiction  of  Power  of  Supervisors,  Aldermen  or 
Other  Legislative  Bodies  of  Cities,  Towns,  etc.,  as  to  Water 
Rates — Mandamus. 

A  State  may  make  it  the  official  duty  of  a  board  of  supervisors, 
town  council,  board  of  aldermen,  or  other  legislative  body  of 
any  city  and  county,  city  or  town,  in  the  State  to  annually 
fix  the  rates  that  shall  be  charged  and  collected  for  water 
furnished.  It  is  also  competent  for  a  State  to  declare  that  the 
use  of  all  water  appropriated  for  sale,  rental,  or  distribution, 
shall  be  a  public  use,  subject  to  public  regulation  and  control; 
but  this  power  cannot  be  exercised  arbitrarily  and  without 
reference  to  what  is  just  and  reasonable  between  the  public 
and  those  who  appropriate  water,  and  supply  it  for  general  use.^^ 

14  Cleveland,  C,  C.  &  St.  L.  Ry.  Co.  v.  Backus,  154  U.  S.  439,  14  Sup.  Ct. 
1122,  38  L.  ed.  1041. 

15  San  Diego  Land  &  Town  Co.  v.  National  City,  174  U.  S.  739,  43  L.  ed. 
1154,  19  Sup.  Ct.  804.  See  also  Stanislaus  County  v.  San  Joaquin  &  Kings 
River  Canal  &  Irrig.  Co.,  192  U.  S.  201,  48  L.  ed.  406,  24  Sup.  Ct.  241,  rev'g 
113  Fed.  930. 

164 


SUPERVISORY   BODIES — GENERALLY  §  90 

To  regulate  or  establish  rates  for  which  water  will  be  supplied 
is,  in  its  nature,  the  execution  of  one  of  the  powers  of  the  State, 
and  the  right  of  the  State  to  do  so  should  not  be  regarded  as 
parted  with  any  sooner  than  the  right  of  taxation  should  be 
so  regarded,  and  the  language  of  such  an  alleged  contract 
should  in  both  cases  be  equally  plain. ^^  So  a  provision  in  a 
State  water  act  that  county  boards  of  supervisors  should 
regulate  water  rates  but  could  not  reduce  them  below  a  certain 
point,  does  not  amount  to  a  contract  with  water  companies 
which  would  be  impaired  within  the  meaning  of  the  Federal 
Constitution  by  a  subsequent  act  either  reducing  the  rates 
below  such  point  or  authorizing  boards  of  supervisors  to  do  so.^' 
A  State  statute  may  also  confer  upon  a  board  of  public  officers, 
such  as  the  commissioner  of  waterworks,  a  discretion  to  make 
a  contract  with  the  "lowest  and  best"  bidder,  and  this  dis- 
cretion cannot  be  controlled  by  mandamus.^* 

§  96.  Powers  of  Municipality — Railroad  Commission  and 
Borough  President — Laying  Electric  Lines — Repaying  by 
Street  Railroad. 

As  chap.  483  of  the  laws  of  1881,  now  part  of  §  102  of  the 
Transportation  Corporations  Law  o'  New  York,  provides  that 
companies  organized  for  the  purpose  of  maintaining  lines  of  elec- 
tric telegraphs  within  the  State  can  operate  provided  they  obtain 
the  consent  of  the  municipal  authorities  before  laying  lines  in 

10  Stanislaus  County  v.  San  Joaquin  &  Kings  River  Canal  &  Irrig.  Co., 
192  U.  S.  201,  48  L.  ed.  406,  24  Sup.  Ct.  241,  rev'g  113  Fed.  930.  See  Os- 
born  V.  San  Diego  Land  &  Town  Co.,  178  U.  S.  22,  20  Sup.  Ct.  860,  44  L. 
ed.  961. 

"  Stanislaus  County  v.  San  Joaquin  &  Kings  River  Canal  &  Irrig.  Co., 
192  U.  S.  201,  48  L.  ed.  400,  24  Sup.  Ct.  241,  rev'g  113  Fed.  930. 

As  to  ordinances  of  municipal  corporations;  contract  rights;  obligation 
of  contract  and  regulation  of  water  rates,  see  Newburyport  Water  Co.  v. 
Newburyport,  193  U.  S.  501,  48  L.  ed.  795,  24  Sup.  Ct.  763;  Freeport  Water 
Co.  V.  Freeport  City,  180  U.  S.  587,  45  L.  ed.  679,  21  Sup.  Ct.  493  (followed 
in  Rogers  Park  Water  Co.  v.  Fergus,  180  U.  S.  624,  45  L.  ed.  702,  21  Sup. 
Ct.  490;  Danville  Water  Co.  v.  Danville  City,  180  U.  S.  619,  21  Sup.  Ct. 
505,  45  L.  ed.  696);  Los  Angeles  v.  Los  Angeles  City  Water  Co.,  177  U.  S. 
558,  20  Sup.  Ct.  736,  44  L.  ed.  886.    See  also  §  37,  herein. 

18  State  of  Ohio  ex  rel.  Walton  v.  Herman,  63  Ohio  St.  440. 

165 


§  96  JURISDICTION    OR    POWER   OF   CORPORATION 

the  streets  of  any  city,  village  or  town,  a  corporation  organized 
after  the  passage  of  said  act,  or  its  successor,  cannot  extend  its 
lines  within  the  city  of  New  York  or  lay  additional  wires  with- 
out the  consent  of  the  municipal  authorities.^*^  Under  the 
charter  of  the  city  of  New  York  a  borough  president,  subject 
to  the  control  of  the  board  of  estimate  and  apportionment,  is 
the  proper  person  to  determine  when,  how  and  under  what 
circumstances  a  street  shall  be  repaved/"  In  Connecticut, 
municipal  authorities  jointly  with  the  railroad  commissioners 
are  agents  of  the  State  in  the  control  of  the  use  of  highways 
for  street  railways,  and  the  commissioners,  in  some  particulars, 
exercise  the  control  through  original  and  exclusive  action,  and 
may  exercise  it  in  all  particulars  either  through  original  and 
appellate  or  final  action.  But  in  the  absence  of  action  by  the 
railroad  commissioners  the  municipal  authorities  in  that  State 
may  exercise  the  full  direction  and  control  given  by  statute  in 
respect  to  placing  electric  wires  and  conductors  in  the  highways 
by  a  street  railway  company  for  the  purpose  of  transmitting 
and  applying  electricity  as  the  motive  power  for  operating  its 
railway,  subject,  however,  to  final  action  of  the  railroad  com- 
missioners; and  any  authorized  action  relating  to  street  rail- 
ways, taken  by  local  municipal  authorities,  may  be  retried  and 
determined  by  the  railroad  commissioners.^^ 

18  New  York  Independent  Telephone  Co.,  Matter  of,  133  App.  Div.  635. 

The  syllabus  to  this  case  as  reported  in  the  New  York  Supplement  reads 
as  follows:  Where  a  State  law  in  force  until  repealed.  Laws  1881,  p.  656, 
chap.  483,  in  force  until  repealed  by  Laws  1909,  chap.  219;  Consol.  Laws, 
p.  1613,  chap.  63,  provided  that  any  company  incorporated  under  the  laws 
of  the  State  for  the  purpose  of  owning  and  maintaining  a  telegraph  line  or 
lines  wholly  or  partly  within  the  State  may  lay  lines  underground  in  any 
city,  etc.,  within  the  State,  provided  that  it  shall  before  doing  so  first  ob- 
tain from  the  common  council,  etc.,  permission  to  use  the  streets  for  the 
purpose.  It  was  held  that  a  burglar  alarm  corporation  incorporated  by 
the  State  in  1890  with  power  to  use  telegraph  wires  had  no  authority  to 
use  the  streets  of  New  York  City,  where  it  had  not  obtained  the  consent  of 
the  board  of  aldermen.  In  re  New  York  Independent  Tel.  Co.,  118  N.  Y. 
Supp.  290,  133  App.  Div.  635. 

20  New  York  City  v.  New  York  City  Ry.  Co.,  132  App.  Div.  156,  a  case  as 
to  the  obligation  of  street  railroads  to  relay  pavements  between  tracks. 

21  New  York,  New  Haven  &  Hartford  Co.'s  Appeal,  80  Conn.  623,  70  Atl.  26. 

166 


SUPERVISORY    BODIES— GENERALLY  §§  97-99 

§  97.  Power  of  Commission  as  to  Standard  Fire  Policy. 

A  delegation  of  power  to  a  commission  to  draft,  etc.,  a  stand- 
ard form  of  fire  insurance  policy  is  unconstitutional  as  confer- 
ring legislative  power .^^ 

§  98.  Jurisdiction  or  Powers  of  Court  of  Visitation — 
Telegraph  and  Railroad  Lines. 

A  Court  of  \^isitation  created  with  power  to  regulate  tele- 
graphic and  railroad  lines  within  a  State  is  a  legislative  and 
administrative  body,  and  the  fact  that  the  legislature  denomi- 
nates such  tribunal  a  court  is  not  conclusive  as  to  its  true  charac- 
ter nor  as  to  the  nature  of  the  jurisdiction  and  powers  conferred 
upon  it;  but  a  statute  is  unconstitutional  which  combines  in 
such  body  legislative  functions  to  make  laws  and  regulations 
with  the  power  to  exercise  judicial  powers  by  passing  upon  the 
validity  of  such  laws  and  regulations  and  enforcing  its  own 
judgments  and  orders .^^  A  chapter  of  a  certain  enactment 
extending  the  power,  jurisdiction  and  control  of  a  Court  of 
Visitation  over  telegraph  companies  and  telegraphic  service 
within  a  State  will  be  held  in  yari  materia  with  another  chapter 
of  the  statutes  passed  the  same  year  creating  a  court  of  visit- 
ation and  attempting  to  extend  its  power,  jurisdiction  and  con- 
trol over  the  railways  of  the  State,  and  it  must  be  construed 
in  connection  with  that  statute  the  same  as  though  both 
chapters  constituted  one  enactment .^^ 

§  99.  Power  of  Secretary  of  Agriculture — Regulation  of 
Commerce — Quarantine  Regulations. 

Whether  or  not  the  Cattle  Contagious  Disease  Act  ^  is  con- 
stitutional as  delegating  power  solely  vested  in  Congress  to  the 
Secretary  of  Agriculture,  that  act  confers  no  power  on  such 
secretary  to  make  any  regulations  concerning  intrastate  com- 

22  King  V.  Concordia  Fire  Ins.  Co.,  140  Mich.  258,  103  N.  W.  616,  12  Det. 
L.  N.  160.  See  also  O'Neil  v.  American  Fire  Ins.  Co.,  166  Pa.  St.  72,  30  Atl. 
943,  45  Am.  St.  Rep.  650,  26  L.  R.  A.  715. 

23  Western  Union  Teleg.  Co.  v.  Myatt  (U.  S.  C.  C),  98  Fed.  335. 

24  Western  Union  Teleg.  Co.  v.  Austin,  67  Kan.  208,  72  Pac.  850. 

25  Of  Feb.  2,  1903,  33  Stat.  1264. 

167 


§  100  JURISDICTION    OR   POWER   OF   CORPORATION 

merce  over  which  Congress  has  no  control.  An  order,  therefore, 
of  that  officer,  purporting  to  fix  a  quarantine  line  under  the 
above  enactment,  and  which  applies  in  terms  to  all  shipments 
whether  interstate  or  intrastate,  is  void  as  an  attempt  to  regu- 
late intrastate  commerce,  notwithstanding  it  is  the  same  line 
as  that  fixed  for  a  similar  purpose  as  to  intrastate  shipments  by 
the  State  through  which  it  passes.  While  in  a  proper  case 
Federal  authorities  may  adopt  a  quarantine  fine  adopted  by  a 
State,  still  where  the  secretary  makes  regulations  adopting  it 
as  applying  to  all  commerce  whether  interstate  or  intrastate, 
and  nothing  on  the  face  of  the  order  indicates  whether  he 
could  have  made  such  an  order  if  limited  to  interstate  commerce, 
the  order  is  not  divisible  and  the  Federal  Supreme  Court  cannot 
declare  that  it  relates  solely  to  interstate  commerce  but  must 
hold  it  void  as  an  entirety.^® 

§  100.  Secretary  of  Commerce  and  Labor — ^Enforcement 
by,  Without  Judicial  Trial,  of  Penalty  on  Transportation 
Company — Notice  and  Hearing — Civil  and  Criminal  Action. 

28  Illinois  Central  Railroad  v.  McKendree,  203  U.  S.  514,  27  Sup.  Ct.  153, 
51  L.  ed.  298.  The  record  here  showed  that  the  case  as  made  by  the  plain- 
tiff below  was  to  recover  damages  for  the  infection  of  cattle,  because  of  com- 
ing in  contact  with  cattle  transported  by  the  railroad  company  from  a  point 
south  to  a  point  north  of  the  quarantine  hne  established  by  the  Secretary  of 
Agriculture,  in  a  manner  violative  of  regulations  for  the  transportation  and 
keeping  of  cattle  established  by  the  Secretary's  order.  The  Government 
objected  to  the  jurisdiction  of  the  Supreme  Court  to  entertain  the  writ  of 
error,  upon  the  ground  that  no  Federal  question  was  raised  within  the  in- 
tent and  meaning  of  §  709,  Revised  Statutes,  but  that  court  was  of  opinion 
that  such  questions  were  raised,  and  that  it  was  required  upon  the  record 
to  review  the  judgment  of  the  State  Court.  "The  railroad  company,  by 
the  proceedings  and  judgment  in  this  case,  was  denied  the  alleged  Federal 
rights  and  immunities  specially  set  up  in  the  proceedings,  in  the  enforce- 
ment of  a  statute  and  departmental  orders  averred  to  be  beyond  the  con- 
stitutional power  of  Congress  and  the  authority  of  the  Secretary  of  Agri- 
culture, and  in  the  rendition  of  a  judgment  for  damages  in  an  action  under 
the  statute  and  order,  in  opposition  to  the  insistence  of  the  defendant  that, 
even  if  constitutional,  the  statute  did  not  confer  such  power  or  authorize 
a  judgment  for  damages."    Id.,  526,  per  Mr.  Justice  Day. 

What  is  not  a  delegation  of  legislative  power  to  Commissioner  of  Agri- 
culture, see  State  v.  Southern  Ry.  Co.,  141  N.  C.  846,  54  S.  E.  29. 

168 


SUPERVISORY    BODIES — GENERALLY  §  100 

It  is  within  the  competency  of  Congress,  when  legislating  as 
to  matters  exclusively  within  its  control,  to  impose  appropriate 
obligations  and  sanction  their  enforcement  by  reasonable 
money  penalties  giving  to  executive  officers  the  power  to  enforce 
such  penalties  without  the  necessity  of  invoking  the  judicial 
powers.  The  prohibition,  therefore,  of  the  Alien  Immigration 
Act  2^  against  bringing  into  the  United  States  alien  immigrants 
afflicted  with  loathsome  and  contagious  diseases  is  within  the 
absolute  power  of  Congress,  and  such  provision  is  not  uncon- 
stitutional because  it  provides  that  the  Secretary  of  Commerce 
and  Labor  may,  without  judicial  trial,  impose  upon  and  exact 
penalties  from  a  transportation  company  for  violation  of  its 
provisions;  nor  is  the  imposition  of  such  penalty  in  such  case 
by  an  executive  officer  where  so  authorized  by  Congress,  in  a 
matter  of  this  kind  and  wholly  within  its  competency,  uncon- 
stitutional under  the  Fifth  Amendment  as  taking  property 
without  due  process  of  law.  The  greater  includes  the  less,  and 
where  Congress  has  power  to  sanction  a  prohibition  by  penalties 
enforceable  by  executive  officers  without  judicial  trial  on  the 
ascertainment  in  a  prescribed  manner  of  certain  facts,  the 
person  upon  whom  the  penalty  is  imposed  is  not  entitled  to  any 
hearing  in  the  sense  of  raising  an  issue  and  tendering  evidence 
as  to  the  facts  so  ascertained,  and  is  not,  therefore,  denied  due 
process  because  the  time  which  the  executive  officer  allows  him 
after  notice  of  the  ascertainment  and  imposition  to  produce 
evidence  as  to  certain  facts  on  which  the  fine  might  be  remitted 
is  too  short.  Again,  the  authority  given  by  Congress  in  the 
above-stated  act  to  the  Secretary  of  Commerce  and  Labor  to 
impose  an  exaction  on  a  transportation  company  bringing  to 
the  United  States  an  alien  immigrant  afflicted  with  a  loathsome 
contagious  disease  when  the  medical  examination  establishes 
that  the  disease  existed,  and  could  have  been  detected  by 
medical  examination  at  the  time  of  embarkation,  does  not 
purport  to  define  and  punish  any  criminal  offense,  but  merely 
entails  the  infliction  of  a  penalty  enforceable  by  civil  suit;  nor 

27  Act  of  March  3,  1903,  §  9,  chap.  1012,  32  Stat.  1213. 

169 


§  100  JURISDICTION    OR    POWER    OF    CORPORATION 

is  the  enforcement  necessarily  governed  by  the  rules  controlling 
the  prosecution  of  criminal  offenses.^* 

The  court,  per  Mr,  Justice  White,^^  said:  "The  exaction 
which  the  section  authorizes  the  Secretary  of  Commerce  and 
Labor  to  impose,  when  considered  in  the  light  afforded  by  the 
context  of  the  statute,  is  clearly  but  a  power  given  as  a  sanction 
to  the  duty,  which  the  statute  places  on  the  owners  of  all 
vessels,  to  subject  alien  emigrants,  prior  to  bringing  them  to 
the  United  States,  to  medical  examination  at  the  point  of 
embarkation,  so  as  to  exclude  those  afflicted  with  the  prohibited 
diseases.  In  other  words,  the  power  to  impose  the  exaction 
which  the  statute  confers  on  the  secretary  is  lodged  in  that 
officer  only  when  it  results  from  the  official  medical  examina- 
tion at  the  point  of  arrival  not  only  that  an  alien  is  afflicted 
with  one  of  the  prohibited  diseases,  but  that  the  stage  of  the 
malady  as  disclosed  by  the  examination  establishes  that  the 

28  Oceanic  Steam  Navigation  Co.  v.  Stranahan,  214  U.  S.  320, 53  L.  ed.  1013, 
29  Sup.  Ct.  671,  aff'g  155  Fed.  428,  distinguishing  Wong  Wing  v.  United 
States,  163  U.  S.  228,  41  L.  ed.  140,  16  Sup.  Ct.  977,  following  Hepner  v. 
United  States,  213  U.  S.  103,  53  L.  ed.  720,  29  Sup.  Ct.  474.  In  the  principal 
case  a  steamship  company  sought  the  recovery  of  money  paid  to  the  collec- 
tor of  customs  of  the  port  of  New  York  which  was  exacted  by  that  official 
under  an  order  of  the  Secretary  of  Commerce  and  Labor.  Under  the  findings 
of  the  court,  the  case  having,  by  stipulation,  been  tried  without  a  jury,  there 
was  no  doubt  that  the  money  was  paid  to  the  collector  under  protest,  and 
involuntarily,  the  company  being  coerced  by  the  certainty  that  if  it  did  not 
pay  the  collector  would  refuse  a  clearance  to  its  steamships  plying  between 
New  York  City  and  foreign  ports  at  periodical  and  definite  sailings,  whose 
failure  to  depart  on  time  would  have  caused  not  only  grave  pubHc  incon- 
venience from  the  nonfulfillment  of  mail  contracts,  but  would  also  have 
entailed  upon  the  company  the  most  serious  pecuniary  loss  consequent  on 
its  failure  to  carry  out  many  other  contracts,  both  the  secretary  and  the 
collector  were  expressly  authorized  by  law,  the  one  to  impose  and  the  other 
to  collect  the  exactions  which  were  made,  and  the  only  question,  therefore, 
was  whether  the  power  conferred  upon  the  named  officials  was  consistent 
with  the  Constitution.  The  act,  the  constitutionality  of  which  was  called 
in  question  and  under  which  the  officials  acted  was  §  9  of  the  act  of  March  3, 
1903,  chap.  1012,  32  Stat.  1213.  This  provision  extended  to  "any  person,  in- 
cluding any  transportation  company  other  than  railway  lines  entering  the 
United  States  from  foreign  contiguous  territory,  or  the  owner,  master,  agent, 
or  consignee  of  any  vessel." 

2«/d.,  332,  342. 

170 


SUPERVISORY   BODIES — GENERALLY         §§  101,  102 

alien  was  suffering  with  the  disease  at  the  time  of  embarkation, 
and  that  such  fact  would  have  been  then  discovered  had  the 
medical  examination  been  then  made  by  the  vessel  or  its  owners, 
as  the  statute  requires.  We  think  it  is  also  certain  that  the 
power  thus  lodged  in  the  Secretary  of  Commerce  and  Labor 
was  intended  to  be  exclusive,  and  that  its  exertion  was  au- 
thorized as  the  result  of  the  probative  force  attributed  to  the 
official  medical  examination  for  which  the  statute  provides, 
and  that  the  power  to  refuse  clearance  to  vessels  was  lodged 
for  the  express  purpose  of  causing  both  the  imposition  of  the 
exaction  and  its  collection  to  be  acts  of  administrative  compe- 
tency not  requiring  a  resort  to  judicial  power  for  their  enforce- 
ment. *  *  *  It  is  not  denied  that  there  was  full  power 
in  Congress  to  provide  for  the  examination  of  the  alien  by 
medical  officers  and  to  attach  conclusive  effect  to  the  result  of 
that  examination  for  the  purposes  of  exclusion  or  deportation. 
But  it  is  said  the  power  to  do  so  docs  not  include  the  right  to 
make  the  medical  examination  conclusive  for  the  purpose  of 
imposing  a  penalty  upon  the  vessel  for  the  negligent  bringing 
in  of  an  alien.  We  think  the  argument  rests  upon  a  distinction 
without  a  difference.  It  disregards  the  purpose  which,  as  we 
have  already  pointed  out,  Congress  had  in  view  in  the  enact- 
ment of  the  provision,  that  is,  the  guarding  against  the  danger 
to  arise  from  the  wrongful  taking  on  board  of  an  alien  afflicted 
with  a  contagious  malady." 

§  101.  Power  of  Secretary  of  State — Reinsurance  Con- 
tracts. 

A  statute  is  not  unconstitutional  as  attempting  to  delegate 
legislative  or  judicial  powers  upon  a  Secretary  of  State  when  it 
requires  such  officer's  approval  to  reinsurance  contracts  of  life 
risks  .^" 

§  102.  Special  Tribunal — "  Special  Commission  "  to  Hear 
and  Adjudicate  Not  a  "  Court  "—Gas  and  Electric  Light 
Plant. 

A  statute  may  create  a  special  tribunal  for  hearing  and  decid- 

30  Iowa  Life  Ins.  Co.,  64  N.  J.  L.  340,  45  AtL  762. 

171 


§  102  JURISDICTION    OR   POWER   OF   CORPORATION 

ing  upon  claims  against  a  municipal  corporation  which  have 
no  legal  obligation,  but  which  the  legislature  thinks  have 
sufficient  equity  to  make  it  proper  to  provide  for  their  investi- 
gation and  payment  when  found  proper,  and  it  does  not  in  any 
way  regulate  the  practice  in  courts  of  justice.^^ 

In  a  case  of  importance  decided  in  Connecticut  a  statute  of 
that  State  ^'  allows  cities  and  towns  to  establish  gas  or  electric 
plants  for  furnishing  light  for  municipal  use  and  the  use  of 
citizens  paying  therefor,  but  requires  the  municipality,  before 
setting  up  its  own  plant,  to  purchase  the  local  plant  of  a  specially 
chartered  corporation  engaged  in  like  business,  if  there  be  one, 
provided  such  corporation  shall  elect  to  sell  and  comply  with  the 
terms  of  the  act.  In  case  of  a  disagreement  as  to  what  shall  be 
sold,  or  as  to  the  terms  of  sale,  the  act  provides  that  either 
party  may  apply  to  the  Superior  Court  for  the  appointment  of 
a  "special  commission,"  who  shall  hear  the  parties  and  "adjudi- 
cate" those  matters,  and  that  its  doings  shall  be  reported  to 
said  court  for  confirmation.  If  a  remonstrance  to  the  report  is 
sustained,  the  court  is  to  set  aside  the  report  in  whole,  or  in 
part,  as  justice  may  require,  and  appoint  another  "special 
commission";  and  this  procedure  is  to  be  repeated,  if  necessary, 
until  the  report, "covering  all  questions  involved"  has  been 
confirmed  by  the  Superior  Court,  which  may  compel  compliance 
with  its  final  decree  and  issue  and  enforce  such  interlocutory 
orders  as  justice  may  require;  upon  appeal  by  the  defendant 
from  a  judgment  of  the  Superior  Court  accepting  and  confirm- 
ing the  action  of  such  a  commission  it  was  held: — (1)  That  the 
question  of  constitutionality  of  the  act  ^^  was  one  beyond  the 
province  of  the  special  commission,  its  duty  being  simply  to 
execute  the  powers  confided  to  it  by  the  Superior  Court.  (2) 
That  the  special  commission  was  not  a  "court,"  nor  its  members 
"judges,"  within  the  meaning  of  the  Constitution  of  the  State  ^* 

31  Guthrie  National  Bank  v.  Guthrie,  173  U.  S.  528,  19  Sup.  Ct.  513,  43 
L.  ed.  796. 

32  Chapter  231  of  the  Public  Acts  of  1893,  now  §§  1978-1997  of  the  Gen- 
eral Statutes. 

33  Of  1893. 

34  Article  5,  §§  1,  3. 

172 


SUPERVISORY    BODIES — GENERALLY  §  102 

which  requires  courts  to  be  established  and  judges  appointed 
by  the  General  Assembly.  (3)  That  the  compulsory  purchase 
feature  of  the  act  did  not  confer  "exclusive  public  emoluments 
or  privileges"  upon  the  plaintiff  in  violation  of  the  State  Con- 
stitution^^ since  the  duty  of  purchasing  such  plants  rested 
equally  on  all  municipalities  seeking  to  take  advantage  of  the 
statute,  and  was  owed  equally  to  all  corporations  in  the  situation 
of  the  plaintiffs.  While  no  man  or  set  of  men  are  entitled  to 
demand  exclusive  privileges  from  the  State,  it  may  grant  them, 
for  proper  cause  and  on  equal  terms,  to  certain  sets  of  men  or 
classes  of  corporations.  (4)  That  the  legislature  had  the  right 
to  create  a  particular  kind  of  administrative  tribunal  to  decide 
questions  regarding  the  value  of  property  to  be  appropriated  to 
a  public  use,  whether  by  a  public  or  a  private  corporation,  and 
the  method  and  terms  of  such  appropriation.  (5)  That  in 
estimating  the  sum  to  be  paid  by  the  city  for  the  plaintiff's 
property,  the  commission  was  not  confined  to  a  valuation  of  the 
bare  physical  plant,  and  committed  no  error  in  taking  into 
account  its  earning  capacity  as  a  going  concern,  based  upon 
its  actual  earnings,  the  expense  of  operation  and  the  changes, 
if  any,  needed  for  the  reasonable  improvement  of  the  plant, 
and  the  probable  results  thereof  as  bearing  upon  the  output; 
also  the  fact  that  the  plaintiff  had  an  established  business, 
built  up  at  the  risk  of  private  capital  after  experiments  and 
changes  during  a  long  period,  as  well  as  the  policy  of  the  State 
in  dealing  with  public  service  corporations  like  the  plaintiff,  in 
so  far  as  that  policy  or  purpose  was  manifested  by  the  terms 
of  the  statute.  (6)  That  it  was  unnecessary  and  could  serve 
no  useful  purpose,  for  the  commission  to  specify  separately 
each  item  of  value  which  it  included  in  the  purchase  price  fixed 
by  it.  (7)  That  it  was  within  the  jurisdiction  of  the  Superior 
Court,  in  framing  the  final  judgment,  to  provide  for  the  due 
fulfillment  of  the  terms  and  conditions  of  sale  laid  down  in  the 
report,  although  it  could  not  impose  other  or  additional  obli- 
gations upon  the  parties.  (8)  That  the  judgment  in  fixing  the 
date  of  the  sale  and  transfer;  settling  the  particular  form  of  the 

36  Article  1,  §  1. 

173 


§  102  JURISDICTION    OR   POWER   OF   CORPORATION 

warranty  deed  and  bill  of  sale  and  the  date  and  manner  of  their 
delivery;  in  computing  interest  and  liquidating  the  precise 
amount  of  the  purchase  price;  and  in  ordering  the  issue  of  an 
execution  for  the  amount  due  at  the  date  fixed  for  payment, 
did  not  depart  from,  but  merely  gave  effect  to  the  terms  of  the 
report.  (9)  That  the  sale  of  the  plant,  subject  to  the  mortgage, 
as  directed  by  the  commission,  imposed  no  direct  obligation 
upon  the  city  to  pay  the  mortgage  bonds  or  interest  thereon, 
and  therefore  a  clause  of  the  judgment  which  required  the  city 
to  reimburse  the  plaintiff  for  such  installments  of  interest  as  it 
should  thereafter  pay,  was  erroneous,  and  unauthorized  either 
by  the  statute  or  the  commission's  report.  Under  such  circum- 
stances the  plaintiff  must  look  solely  to  its  equitable  charge 
upon  the  mortgaged  property  for  indemnity .^^ 

38  Norwich  Gas  &  Electric  Co.  v.  Norwicii,  76  Conn.  565. 


174 


SUPERVISORY   CORPORATION   COMMISSIONS  CONTINUED      §  103 


CHAPTER  IX 

JURISDICTION   OR  POWERS  OF  SUPERVISORY  CORPORATION  COM- 
MISSIONS   CONTINUED 


103.  Jurisdiction  of  Interstate  Com- 

merce Commission — Nature 
of  Powers  of. 

104.  Jurisdiction  of  Interstate  Com- 

merce Commission — Rates 
— R  e  b  a  t  e  s — Discrimina- 
tion. 

105.  Same  Subject — Instances. 

106.  Jurisdiction  of  Interstate  Com- 

merce Commission — Rates 
— Promulgation  of  General 
Orders. 
lOGa.  Jurisdiction  of  Interstate 
Commerce  Commission  — 
Carriers  Discriminatory 
Regulations  —  Railroad 
Equipment — Coal  Car  Dis- 
tribution. 

107.  Power  of  State  as  to  Railroad 

and  Like  Commissions. 

108.  Same  Subject. 

109.  Same  Subject — Power  to  Re- 

move or  Suspend  Commis- 
sions. 

110.  .Jurisdiction    and    Power    of 

Railroad  and  Like  Commis- 
sions— Generally. 

111.  Same  Subject. 

112.  Nature    of    Jurisdiction    and 

Power  of  Railroad  Commis- 
sions. 

1 13.  Jurisdiction  of  Railroad  Com- 

missions— Rates. 


I  114.  Same  Subject. 

115.  When    Railroad    Commission 

Is  Without  Jurisdiction — 
Rates. 

116.  Jurisdiction  of  Railroad  Com- 

mission— Increase  of  Capi- 
tal Stock  of  Corporations. 

117.  Jurisdiction  of  Public  Service 

C  o  m  m  i  s  s  i  o  n — Issue  of 
Stocks  and  Bonds  by  Cor- 
poration, 
lis.  Jurisdiction  of  Railroad  Com- 
mission —  Stopping  Inter- 
state Trains. 

119.  Jurisdiction  of  Railroad  Com- 

mission— Interstate  Com- 
merce— Delivery  of  Cars — 
Train  Connections. 

120.  Jurisdiction  of  Railroad  Com- 

missions— Railroad  Station 
— Other  Facilities — Obliga- 
tion of  Contract — Due 
Process  of  Law. 

121.  Jurisdiction  of  Railroad  Com- 

missions —  Railroad  or 
Grade  Crossings — Appor- 
tionment or  Expense  of. 

122.  Jurisdiction  of  Railroad  Com- 

missions— Telegraph  Com- 
panic  s — Installing  Tele- 
phone. 


§  10.3.  Jurisdiction  of  Interstate  Commerce  Commission 
-Nature  of  Powers  of. 

The  Interstate  Commerce  Commission  is  a  body  corporate 

17-) 


§  103  JURISDICTION   OR   POWERS   OF 

with  legal  capacity  to  be  a  party  plaintiff  or  defendant  in  the 
Federal  Courts.^  It  was  decided  in  1889  that  the  Interstate 
Commerce  Commission  is  invested  only  with  administrative 
powers  of  suspension  and  investigation  which  fall  far  short  of 
making  the  board  a  court,  or  its  action  judicial  in  the  proper 
sense  of  the  term.  The  commission  hears,  investigates,  and 
reports  upon  complaints  made  before  it,  undoing  alleged  viola- 
tions or  omissions  of  duty  under  the  act;  but  subsequent 
judicial  proceedings  are  contemplated  and  provided  for  as  the 
remedy  for  the  enforcement,  either  by  itself  or  the  party  inter- 
ested, of  its  order  or  report  in  all  cases  where  the  party  com- 
plained of  or  against  whom  its  decision  is  rendered  does  not 
yield  voluntary  obedience  thereto.  The  commission  is  charged 
with  the  duty  of  investigating  and  reporting  upon  complaints, 
and  the  facts  found  or  reported  by  it  are  only  given  the  force 
and  weight  of  prima  facie  evidence  in  all  such  judicial  proceed- 
ings as  may  thereafter  be  required  or  had  for  the  enforcement 
of  its  recommendation  or  order.  The  functions  of  the  com- 
mission are  those  of  referees  or  special  commissioners,  appointed 
to  make  preliminary  investigation  of  and  report  upon  matters 
for  subsequent  judicial  examination  and  determination.  In 
respect  to  interstate  commerce  matters  covered  by  the  law,  the 
commission  may  be  regarded  as  the  general  referee  of  each  and 
every  Federal  Circuit  Court  upon  which  the  jurisdiction  is 
conferred  enforcing  the  rights,  duties  and  obligations  recognized 
and  imposed  by  the  act.  It  is  neither  a  Federal  Court  under 
the  Constitution,  nor  does  it  exercise  judicial  powers,  nor  do 
its  conclusions  possess  the  efficacy  of  judicial  proceedings.^ 

1  Texas  &  Pacific  Ry.  Co.  v.  Interstate  Commerce  Commission,  162  U.  S. 
197,  16  Sup.  Ct.  666,  40  L.  ed.  940. 

2  Kentucky  &  Indiana  Bridge  Co.  v.  Louisville  &  Nashville  Rd.  Co.  (U.  S. 
C.  C),  37  Fed.  567. 

See  also  the  following  cases:  Interstate  Commerce  Commission  v.  Cincin- 
nati, New  Orleans  &  T.  P.  Ry.  Co.  (U.  S.  C.  C,  1896),  76  Fed.  183  (I.  C.  C. 
is  not  invested  with  either  legislative  or  purely  judicial  power;  is  adminis- 
trative body  with  certain  incidental  and  quasi-judicial  powers);  Interstate 
Commerce  Commission  v.  Louisville  &  Nashville  Rd.  Co.  (U.  S.  C.  C,  1896), 
73  Fed.  409  (function  of  I.  C.  C.  is  both  quasi-judicial  and  administrative  in 
nature) ;  Interstate  Commerce  Commission  v.  Cincinnati,  New  Orleans  &  T. 

176 


SUPERVISORY  CORPORATION    COMMISSIONS   CONTINUED      §  104 

§  104.  Jurisdiction  of  Interstate  Commerce  Commission 
— Rates — Rebates — Discrimination. 

A  private  car  company  which  delivers  its  cars  to  railroad 
companies  to  be  furnished  indiscriminately  for  the  use  of 
shippers,  receiving  pay  for  such  use  from  the  railroad  com- 
panies on  a  mileage  basis,  is  within  the  provision  of  the  act 
of  Congress^  making  it  unlawful  for  any  person  "or  corpora- 
tion to  offer,  grant,  give,  or  solicit,  accept,  or  receive  any  re- 
bate, concession,  or  discrimination  in  respect  of  the  transporta- 
tion of  any  property  in  interstate  or  foreign  commerce  by  any 
common  carrier,  *  *  *  whereby  any  such  property  shall, 
by  any  devise  whatever  be  transported  at  a  less  rate  than  that 
named  in  the  tariffs  published  and  filed  by  such  carrier,  or 
whereby  any  other  advantage  is  given  or  discrimination  is 
practiced,"  and  the  giving  by  such  car  company  of  any  rebate 
or  allowance  to  a  shipper  using  its  cars,  whereby  he  secures 
the  transportation  of  his  property  at  a  less  rate  than  that 
named  in  the  published  tariff  of  the  carrier  for  transportation 
of  such  property,  in  its  own  cars,  although  from  its  own  funds 
and  without  the  connivance  or  knowledge  of  the  carrier,  is  a 
violation  of  the  statute.  Such  a  car  company  is  therefore  sub- 
ject to  the  jurisdiction  of  the  Interstate  Commerce  Commis- 
sion, charged  with  the  duty  of  enforcing  the  statute  and  having 
power  to  inquire  into  the  operations  of  any  agency  of  trans- 
portation which  may  so  conduct  its  business  as  to  destroy 
uniformity  of  rates  .^ 

The  Southern  Pacific  and  other  railroads  published  a  guar- 
anteed through  rate  on  citrous  fruits  from  California  to  the 
Atlantic  seaboard.  The  shippers  availing  themselves  of  this 
rate  routed  the  goods  from  the  terminals  of  the  initial  carriers 
and  illegally  obtained  rebates  for  the  routing  from  the  con- 
necting carriers.     To  prevent  this — and  the  action  was  suc- 

P.  R.  Co.  (U.  S.  C.  C,  1894),  64  Fed.  981  (I.  C.  C.  not  a  court  but  adminis- 
trative body  exercising  quasi-judicial  powers). 

3  Act  of  Feb.,  1903,  chap.  70S,  32  Stat.  847,  U.  S.  Comp.  St.  Supp.,  1905, 
p.  599. 

<  Syllabus  in  Interstate  Commerce  Commission  v.  Reichmann,  145  Fed. 
237. 

12  177 


§  104  JURISDICTION    OR    POWERS    OF 

coRsful— the  initial  carriers  republished  the  rate,'  reserving  the 
right  to  route  the  goods  beyond  their  own  terminals.    On  com- 
plaint of  shippers  the  Interstate  Commerce  Commission  ordered 
the  initial  carriers  to  desist  from  enforcing  the  new  rule,  hold- 
ing it  violated  §  3  of  the  Interstate  Commerce  Act  by  subject- 
ing the  shippers  to  undue  disadvantage.     The  Circuit  Court 
sustained  the  commission,  but  on  the  ground  that  the  routing 
by  the  carrier  amounted,  although  no  other  agreement  was 
proved  in  regard  thereto,  to  a  pooling  of  freights  and  violated 
§  5  of  the  act.    It  was  held  error,  and  that,  as  the  general  pur- 
pose of  the  act  was  to  facilitate  commerce  and  prevent  dis- 
crimination it  would  not  be  construed  so  as  to  make  illegal  a 
salutary  rule  to  prevent  the  violation  of  the  act  in  regard  to 
obtaining  rebates;  that  the  question  of  joint  through  rates  was, 
under  the  act,  one  of  agreement  between  the  companies  and 
under  their  control,  and  nothing  in  the  act  prevented  an  initial 
carrier  guaranteeing  a  through  rate  from  reserving  in  its  pub- 
lished notice  thereof  the  right  to  route  the  goods  beyond  its 
own  terminal;  that  a  carrier  need  not  contract  to  carry  goods 
beyond  its  own  line,  or  make  a  through  rate;  if  it  had  agreed 
so  to  do,  it  might  do  so  by  such  lines  as  it  chose,  and  upon  such 
reasonable  terms,  not  violative  of  the  law,  as  it  could  agree 
upon;  and  this  right  did  not  depend  upon  whether  it  agreed 
to  be  liable  for  default  of  the  connecting  carrier;  that  the  fact 
that  the  initial  carrier,  in  order  to  break  up  the  practice  of 
rebating  by  the  connecting  carriers,  promised  them  fair  treat- 
ment and  carried  out  the  promise  by  giving  them  certain 
percentages  of  a  guaranteed  through  rate  business,  did  not 
amount  to  a  pooling  of  freights  within  the  meaning  of  §  5  of 
the  Interstate  Commerce  Act;  and  also  that  a  reservation 
applicable  to  a  single  business  by  the  initial  carrier,  guarantee- 
ing a  through  rate,  of  the  right  to  route  goods  beyond  its  own 
terminal,  did  not  amount  to  an  unlawful  discrimination  within 
the  prohibition  of  the  act  if  the  business  was  of  a  special  nature, 
like  the  fruit  business,  having  nothing  in  common  with  other 
freight.'* 

5  Southern  Pacific  Co.  v.  Interstate  Commerce  Commission,  200  U.  S. 

178 


SUPERVISORY   CORPORATION    COMMISSIONS   CONTINUED     §   105 

§  105.  Same  Subject — Instances. 

An  order  of  the  Interstate  Commerce  Commission,  that  car- 
riers not  charging  for  tanks  on  tank-oil  shipments  desist  from 
charging  for  the  barrel  on  barrel  shipments,  or  else  furnish 
tank  cars  to  all  shippers  applying  therefor  is  held  to  be  equiva- 
lent to  a  holding  that  the  charge  for  the  barrel  is  not  in  itself 
excessive,  and,  therefore,  that  barrel-oil  shippers  who  had  not 
demanded  tank  cars  had  not  been  discriminated  against,  and 
were  not  entitled  to  reparation  for  the  amounts  paid  by  them 
on  the  barrel.^ 

Certain  interstate  carriers  having  established  and  for  some 
time  maintained  a  rate  on  steel  rails  and  fastenings  and  other 
iron  products  from  Chicago,  Illinois,  to  San  Francisco,  Cali- 
fornia, and  other  Pacific  coast  points,  the  Interstate  Commerce 
Commission  ordered  that  the  rates  on  such  products  from 
Pueblo,  Colorado,  an  intermediate  point,  to  such  Pacific  coast 
points,  should  not  exceed  seventy-five  per  cent  of  the  rates 
contemporaneously  in  force  from  Chicago  to  the  same  points 
on  the  Pacific  coast,  and  that  the  rate  on  steel  rails  and  fasten- 
ings from  Pueblo  to  San  Francisco  should  not  exceed  forty- 
five  cents  per  hundred,  and  that  the  rate  on  other  iron  products 
should  not  exceed  thirty-seven  and  one-half  cents  per  hundred. 
It  was  held  that  the  commission  had  no  more  power  to  fix  a 
rate  from  Pueblo  to  Pacific  coast  points  by  relation  to  the 
Chicago  rate  that  had  been  or  that  might  be  established  by  the 
carriers  themselves  than  it  had  to  prescribe  a  maximum  rate 
from  Pueblo  to  Pacific  coast  points  upon  an  independent  con- 
sideration of  what  would  be  a  reasonable  charge  for  the  service, 
and  that  its  order  was  therefore  void.''' 

A  railroad  engaged  in  interstate  commerce  does  not  violate 
the  provisions  of  §§4  and  6  of  the  Interstate  Commerce  Act, 
by  furnishing  cartage  for  delivery  free  of  charge  to  the  mer- 

536,  50  L.  ed.  585,  26  Sup.  Ct.  330,  rev'g  Interstate  Commerce  Commission 
V.  Southern  Pac.  Ry.  Co.,  132  Fed.  829.    See  §  35,  herein. 

8  Penn.  Refining  Co.  v.  Western  New  York  &  Penn.  Rd.  Co.,  208  U.  S. 
208,  28  Sup.  Ct.  268,  52  L.  ed.  456,  aff'g  137  Fed.  343,  70  C.  C.  A.  23. 

">  Syllabus  in  Southern  Pacific  Co.  v.  Colorado  Fuel  &  Iron  Co.,  101  Fed. 
779,  42  C.  C.  A.  12;  Colorado  Fuel  &  Iron  Co.  v.  Southern  Pacific  Co.,  Id. 

179 


§  105  JURISDICTION    OR   POWERS   OF 

chants  of  one  town  on  its  line,  and  not  furnishing  similar 
service  to  the  merchants  of  another  town  on  its  Une  thirty- 
three  miles  distant,  nor  by  failing  to  publish  such  free  cartage 
in  the  schedule  published  in  the  first  town,  when  such  privilege 
has  been  openly  and  notoriously  enjoyed  for  twenty-five  years. 
The  fourth  section  of  such  act  has  in  view  only  the  transporta- 
tion of  passengers  and  property  by  rail,  and  when  property 
transported  as  interstate  commerce  reaches  its  destination  by 
rail  at  lawful  rates,  having  regard  to  rates  charged  upon  similar 
transportation  to  other  points  on  the  line,  it  docs  not  concern 
the  Interstate  Commerce  Commission  whether  the  goods  after 
arrival  are  carried  to  their  place  of  deposit  in  vehicles  furnished 
by  the  railroad  company  free  of  charge,  or  in  vehicles  furnished 
by  the  owners  of  goods;  and  the  same  rule  applies  to  the 
transportation  of  passengers.  In  matters  of  this  kind  much 
should  be  left  to  the  judgment  of  the  commission,  and,  should 
it  direct,  by  a  general  order,  that  railway  companies  should 
thereafter  regard  cartage,  when  furnished  free,  as  one  of  the 
terminal  charges,  and  include  it  as  such  in  their  schedules, 
such  an  order  might  be  regarded  as  a  reasonable  exercise  of  the 
commission's  power.^  The  Interstate  Commerce  Commission, 
in  making  an  investigation  on  the  complaint  of  a  shipper  has, 
in  the  public  interest,  the  power  disembarrassed  by  any  sup- 
posed admissions  contained  in  the  statement  of  the  complaint 
to  consider  the  whole  subject  and  the  operation  of  the  new 
classification  complained  of  in  the  entire  territory;  also  how 
far  its  going  into  effect  would  be  just  and  reasonable  and  would 
create  preferences  or  engender  discriminations  and  whether  it 
is  in  conformity  with  the  requirements  of  the  act  to  regulate 
commerce.  And  if  it  finds  that  the  new  classification  disturbs 
the  rate  relations  thereupon  existing  in  the  official  classification 
territory  and  creates  preferences  and  engenders  discrimina- 
tions it  may,  in  order  to  prevent  such  result,  prohibit  the 
further  enforcement  of  the  changed  classification,  and  an  order 
to  that  effect  is  within  the  power  conferred  by  Congress  on  the 

*  Interstate  Commerce  Commission  v.  Detroit,  G.  H.  &  M.  R.  Co.,  167 
U.  S.  633,  42  L.  ed.  310,  17  Sup.  Ct.  957. 

180 


SUPERVISORY   CORPORATION   COMMISSIONS   CONTINUED      §  106 

commission;  and  so  held  as  to  an  order  of  the  commission  di- 
recting carriers  from  further  enforcing  throughout  official 
classification  in  regard  to  common  soap  in  less  than  carload 
lots.» 

§  106.  Jurisdiction  of  Interstate  Commerce  Commission 
— Rates — Promulgation  of  General  Orders. 

Congress  has  not  conferred  upon  the  Interstate  Commerce 
Commission  the  legislative  power  of  prescribing  rates,  either 
maximum  or  minimum  or  absolute;  and  as  it  did  not  give  the 
express  power  to  the  commission,  it  did  not  intend  to  secure 
the  same  result  indirectly  by  empowering  that  tribunal,  after 
having  determined  what,  in  reference  to  the  past,  were  reason- 
able and  just  rates,  to  obtain  from  the  courts  a  peremptory 
order  that  in  the  future  railroad  companies  should  follow  the 
rates  thus  determined  to  have  been  in  the  past  reasonable  and 
just.^°    It  is  also  held  that  the  commission  has  original  and 

»  Cincinnati,  Hamilton  &  Dayton  Ry.  Co.  v.  Interstate  Commerce  Com- 
mission, 206  U.  S.  142,  51  L.  ed.  995,  27  Sup.  Ct.  648,  aff'g  146  Fed.  559. 

10  Interstate  Commerce  Commission  v.  Alabama  Midland  Ry.  Co.,  168 
U.  S.  144,  42  L.  ed.  414,  18  Sup.  Ct.  45,  aff'g  74  Fed.  715,  21  C.  C.  A.  51, 
adhering  to  the  decisions  in  Interstate  Commerce  Commission  v.  Cincinnati, 
New  Orleans  &  Texas  Pac.  Ry.  Co.,  167  U.  S.  479,  44  L.  ed.  243,  17  Sup. 
Ct.  896  (s.  c,  76  Fed.  183);  Cincinnati,  New  Orleans  &  Texas  Pac.  Ry.  Co. 
V.  Interstate  Commerce  Commission,  162  U.  S.  184,  16  Sup.  Ct.  700,  40 
L.  ed.  935.  See  also  Interstate  Commerce  Commission  v.  Cincinnati,  New 
Orleans  &  Texas  Pacific  Ry.  Co.,  167  U.  S.  479,  42  L.  ed.  243,  17  Sup.  Ct. 
896,  cited  in  Siler  v.  Louisville  &  Nashville  Rd.  Co.,  213  U.  S.  175,  194,  29 
Sup.  Ct.  451,  53  L.  ed.  753  [to  point  that  commission  is  not  clothed  with 
jurisdiction,  either  upon  complaint  or  upon  its  own  information,  to  enter 
upon  a  general  investigation  of  every  rate  upon  every  class  of  commodities 
carried  by  all  the  roads  of  the  State  from  or  to  all  points  therein,  and  make 
a  general  tariff  of  rates  throughout  the  State  (such  as  was  made  in  the 
citing  case) ;  and  that  no  such  power  was  given  to  the  Interstate  Commerce 
Commission];  Honolulu  Rapid  Transit  &  Land  Co.  v.  Hawaii,  211  U.  S.  282, 
291,  29  Sup.  Ct.  55,  53  L.  ed.  186  (to  point  that  legislature  may  delegate  to 
an  administrative  body  the  execution  in  detail  of  the  legislative  power  of 
regulation);  Prentis  v.  Atlantic  Coast  Line  Co.,  211  U.  S.  210,  226,  29  Sup. 
Ct.  67,  53  L.  ed.  150  (to  point  that  the  estabhshment  of  a  rate  is  the  making 
of  a  rule  for  the  future,  and  therefore  is  an  act  legislative,  not  judicial  in 
kind);  Arkansas  Railroad  Rates,  In  re  (U.  S.  C.  C),  168  Fed.  720,  724  (to 
point  that  the  making  of  carriers'  rates  is  a  legislative  and  not  a  judicial  act 
and  courts  are  powerless  to  make  them;  and  also  as  to  duty  of  courts  to 

181 


§  106  JURISDICTION    OR   POWERS   OF 

exclusive  jurisdiction  to  determine  the  question  of  the  reason- 
ableness of  an  established  rate  for  the  interstate  transportation 
of  freight,  and  when  a  schedule  of  rates  has  been  duly  filed 
and  has  gone  into  effect  the  rates  thereby  prescribed  are  the 
only  lawful  rates  until  changed  by  the  commission."  Reason- 
ably interpreted,  the  statute,  by  which  alone  the  Interstate 
Commerce  Commission  derives  its  power,  unmistakably  re- 
quires that  all  rates  prescribed  thereunder  shall  be  just  and 
reasonable,  within  the  constitutional  guaranty,  and  also  that 
they  shall  not  be  unjustly  discriminatory  or  unduly  preferential ; 
and  these  requirements  plainly  operate  as  limitations  upon  the 
power  of  the  commission.  Neither  Congress  nor  any  legislative 
or  administrative  board  acting  by  its  authorization  can  com- 
petently establish  rates  for  the  transportation  of  property  in 
interstate  commerce  that  will  not  admit  of  the  carrier  earning 
such  compensation  for  the  service  rendered  as  under  all  the 
circumstances  is  just  and  reasonable  to  it  and  to  the  public, 

dissolve  preliminary  injunction  or  make  it  perpetual  where  commission  rates 
on  final  hearing  are  shown  to  be  compensatory  or  noncompensatory  and 
confiscatory;  the  case  also  decided  as  to  the  power  of  the  court  to  fix  max- 
imum rates  and  to  what  extent  it  may  do  so) ;  Macon  Grocery  Co.  v.  Atlan- 
tic Coast  Line  Rd.  Co.  (U.  S.  C.  C),  163  Fed.  738,  749  ("  'It  is  insisted, 
however,  that  this  power  of  the  court  cannot  be  exercised  until  the  interstate 
commission  has  acted,  but  that  commission  is  expressly  denied  the  power 
of  injunction  or  any  judicial  power.  This,  it  has  been  conclusively  held, 
remains  with  the  courts'  ");  Chicago,  Burlington  &  Quincy  Rd.  Co.  v. 
Winnett  (U.  S.  C.  C.  A.),  162  Fed.  242,  247  [to  point  that  legislature  may 
delegate  power  to  fix  rates  upon  a  commission  and  that  courts  of  equity 
will  not  interfere  by  injunction  to  control  the  exercise  of  this  power  in  ad- 
vance (citing  also  numerous  other  cases)]. 

When  order  of  Interstate  Commerce  Commission  fixing  rates  is  invalid, 
see  Interstate  Commerce  Commission  v.  Lake  Shore  &  Michigan  S.  Ry. 
Co.,  134  Fed.  942,  aff'd  (mem.)  202  U.  S.  613,  26  Sup.  Ct.  766,  50  L.  ed.  1171. 

Neither  court  or  commission  has  power  to  fix  maximum  rates.  See  In- 
terstate Commerce  Commission  v.  East  Tennessee  V.  &  G.  Ry,  Co.,  85  Fed. 
107;  Interstate  Commerce  Commission  v.  Northeastern  R.  Co.  of  S.  C,  83 
Fed.  611,  27  C.  C.  A.  631. 

"  Syllabus  in  Great  Northern  Ry.  Co.  v.  Kalispell  Lmnber  Co.,  165  Fed. 
25. 

Commission  may  determine  reasonableness  or  unreasonableness  of  rates. 
Tift  V.  Southern  Ry.  Co.,  138  Fed.  753,  aff'd  Southern  Ry.  Co.  v.  Tift,  148 
Fed.  1021,  79  C.  C.  A.  536,  206  U.  S.  428,  27  Sup.  Ct.  709,  51  L.  ed.  1124. 

182 


SUPERVISORY  CORPORATION   COMMISSIONS  CONTINUED     §  106 

for  that  would  be  depriving  the  carrier  of  its  property  without 
due  process  of  law,  and  would  also  be  taking  its  property  for 
public  use  without  just  compensation  in  violation  of  the  Fifth 
Amendment  to  the  Constitution .^^  Again,  Congress  has  con- 
ferred upon  the  Interstate  Commerce  Commission  the  power 
of  determining  whether,  in  given  cases,  the  services  rendered 
were  like  and  contemporaneous,  whether  the  respective  traffic 
was  of  a  like  kind  and  whether  the  transportation  was  under 
substantially  similar  circumstances  and  conditions.  If  the 
commission  has  power  of  its  own  motion  to  promulgate  general 
decrees  or  orders  which  thereby  become  rules  of  action  to 
common  carriers,  such  exertion  of  power  must  be  confined  to 
the  obvious  purposes  and  directions  of  the  statute  since  Con- 
gress has  not  granted  it  legislative  powers.  In  passing  upon 
the  questions  arising  under  the  statute  the  tribunal  appointed 
to  enforce  its  provisions,  whether  the  commission  or  the  courts, 
is  empowered  to  consider  fully  all  the  circumstances  and  con- 
ditions that  reasonably  apply  to  the  situation,  and  in  the  exer- 
cise of  its  jurisdiction  the  tribunal  may  and  should  consider 
the  legitimate  interests  as  well  of  the  carrying  companies  as  of 
the  traders  and  shippers,  and  in  considering  whether  any 
particular  locality  is  subjected  to  an  undue  preference  or  dis- 
advantage the  welfare  of  the  communities  occupying  the  lo- 
calities where  the  goods  are  delivered  is  to  be  considered  as 
well  as  that  of  the  communities  which  are  in  the  locality  of  the 
place  of  shipment.  Among  the  circumstances  and  conditions 
to  be  considered,  as  well  in  the  case  of  traffic  originating  in 
foreign  ports  as  well  as  in  the  case  of  traffic  originating  within 
the  United  States,  competition  that  affects  rates  should  be 
considered,  and  in  deciding  whether  rates  and  charges  made  at 
a  low  rate  to  secure  foreign  freights  which  would  otherwise  go 
by  other  competitive  routes,  are  or  are  not  undue  and  unjust 
the  fair  interests  of  the  carrier  companies  and  the  welfare  of 

12  Missouri,  Kansas  &  Texas  Ry.  Co.  v.  Interstate  Commerce  Commission 
(U.  S.  C.  C),  1G4  Fed.  G45.  See  also  Smyth  v.  Ames,  169  U.  S.  466,  18  Sup. 
Ct.  418,  42  L.  ed.  819,  30  Chicago  L.  News,  243,  171  U.  S.  361,  IS  Sup.  Ct. 
888,  43  L.  ed.  197. 

183 


§  106rt  JURISDICTION   OR   POWERS   OF 

the  community  which  is  to  receive  and  consume  the  com- 
modities are  to  be  considered.  If  the  commission  instead  of 
confining  its  action  to  redressing  on  complaint  made  by  some 
particular  person,  corporation,  firm,  or  locality,  some  specific 
disregard  by  common  carriers  of  provisions  of  the  act,  proposes 
to  promulgate  general  orders,  which  thereby  become  rules  of 
action  to  the  carrying  companies,  the  spirit  and  letter  of  the 
act  require  that  such  orders  should  have  in  view  the  purpose  of 
promoting  or  facilitating  commerce,  and  the  welfare  of  all  to  be 
affected,  as  well  the  carriers  as  the  traders  and  consumers  of 
the  country.  The  mere  fact  that  the  disparity  between  through 
and  local  rates  is  considerable  does  not  warrant  the  Circuit 
Court  of  Appeals  in  finding  that  such  disparity  constitutes  an 
undue  discrimination,  especially  if  such  disparity  is  not  com- 
plained of  by  anyone  affected  thereby  .^^ 

§  106a.  Jurisdiction  of  Interstate  Commerce  Commission — 
Carrier's  Discriminatory  Regulations — Railroad  Equipment 
— Coal  Car  Distribution. 

The  equipment  of  an  interstate  railroad,  including  cars  for 
transportation  of  its  own  fuel  are  instruments  of  interstate 
commerce  and  subject  to  the  control  of  the  Interstate  Com- 
merce Commission.  So  the  act  to  regulate  commerce  has 
delegated  to  said  commission  authority  to  consider,  where 
complaint  is  made  on  that  subject,  the  question  of  distribu- 
tion of  coal  cars,  including  the  carrier's  own  fuel  cars,  in  times 
of  car  shortage,  as  a  means  of  prohibiting  unjust  preference 
or  undue  discrimination;  and  the  commission  ^"^  has  power 
to  deal  with  preferential  and  discriminatory  regulations  of 
carriers  as  well  as  with  rates;  nor  is  it  beyond  the  powers  of 
said  commission  to  require  a  railroad  in  distributing  its  coal 
cars  to  take  into  account  its  own  fuel  cars  in  order  not  to 
create  a  preference  of  the  mine  to  which  said  cars  are  assigned 

"  Texas  &  Pacific  Ry.  Co.  v.  Interstate  Commerce  Commission,  162  U.  S. 
197,  16  Sup.  Ct.  666,  40  L.  ed.  940. 

!■*  Under  §  15  of  the  act  to  regulate  commerce  as  amended  June  29, 
1906,  c.  3591,  34  Stat.  585. 

184 


SlU'IORVISORY   CORPORATION    COMMISSIONS    CONTINUED      §  107 

over  other  mines.  And  even  if  commerce  in  regard  to  the 
purchase  of  coal  at  a  mine  on  a  raih-oad  line  by  the  railroad 
company  which  supplies  its  own  cars  may  end  there,  the  power 
to  use  the  equipment  of  the  railroad  to  move  the  coal  is  subject 
to  the  control  of  said  commission  in  order  to  prevent  dis- 
crimination against,  or  undue  preference  of,  other  miners  and 
shippers  of  coal.^^ 

§  107.  Power  of  State  as  to  Railroad  and  Like  Commis- 
sions. 

A  State  may  exercise  through  a  board  of  commissioners  such 
legislative  control  as  may  be  necessary  to  protect  the  public 
against  danger,  injustice  and  oppression.^^  The  legislature 
may  also,  without  delegating  its  lawmaking  power,  establish  a 
commission  with  authority  to  fix  reasonable  rates  and  tariffs 
for  railroads,  prevent  unjust  discriminations  and  exercise  rea- 
sonable supervision  and  control  in  other  matters  subject  to 
the  right  of  appeal  to  the  courts,  and  such  a  statute  is  con- 
stitutional.^'' A  State  statute  may  also  constitutionally  create 
a  railroad  commission  and  charge  it  with  the  duty  of  supervis- 
ing railroads;  and  such  an  enactment  is  not  necessarily  void 
in  its  entirety  because  it  is  to  some  degree  inconsistent  and 
uncertain  in  its  terms.^*  So  the  creation  of  a  board  of  railroad 
commissioners  and  the  extent  of  its  powers;  what  the  route  of 
railroad  companies  created  by  the  State  may  be;  and  whether 
parallel  and  competing  lines  may  consolidate,  are  all  matters 

15  Interstate  Commerce  Commission  v.  Illinois  Central  Rd.  Co.,  215  U.  S. 
452,  30  Sup.  Ct.  — ,  54  L.  ed.  — ,  followed  in  Interstate  Commerce  Commis- 
sion V.  Chicago  &  Alton  Rd.  Co.,  215  U.  S.  479,  30  Sup.  Ct.  — ,  54  L.  ed.  — , 
as  to  power,  under  the  act  to  regulate  commerce,  of  the  commission  to 
make  reasonable  arrangements  for  the  distribution  of  coal  cars  to  shippers 
including  cars  for  the  transportation  of  fuel  purchased  by  the  railroad  com- 
pany for  its  own  use.  See  Baltimore  &  Ohio  Rd.  Co.  v.  Pitcairn  Coal  Co., 
215  U.  S.  481,  54  L.  ed.  — ,  30  Sup.  Ct.  — .    See  §  49,  herein. 

i«  New  York  &  New  Eng.  Rd.  Co.  v.  Bristol,  151  U.  S.  556,  14  Sup.  Ct. 
437,  38  L.  ed.  269. 

17  Express  Co.  (Atlantic  Express  Co.)  v.  Wilmington  &  Weldon  Rd.  Co., 
Ill  N.  C.  463,  16  S.  E.  393. 

18  Railroad  Commission  Cases  (Stone  v.  Farmers'  Loan  &  Trust  Co.),  116 
U.  S.  307,  29  L.  ed.  636,  6  Sup.  Ct.  334. 

185 


§  108  JURISDICTION   OR   POWERS   OF 

which  a  State  may  regulate  by  its  statutes,  and  the  State  Courts 
are  the  absolute  interpreters  of  such  statutes.^^ 

§  108.  Same  Subject. 

The  power  to  regulate  the  operation  of  railroads  by  a  commis- 
sion rests  upon  the  principle  that  the  State  has  control  over 
property  and  pursuits  of  a  public  nature.  The  commission 
derives  all  its  powers  from  the  statute  which  creates  it.  Its 
functions  and  duties  are  administrative  or  ministerial  and 
neither  legislative  nor  judicial.  "Its  powers  cannot  be  legis- 
lative, for  legislative  powers  cannot,  strictly  speaking,  be  delega- 
ted, nor  can  its  powers  be  judicial  in  the  proper  sense  of  the 
term,  for  judicial  power  can  only  be  exercised  by  courts  and 
judges."  ^"  A  constitutional  inhibition  against  the  delegation 
of  legislative  power  does  not  prevent  the  grant  of  authority  to 
make  rules  and  regulations  for  the  government  of  a  particular 
subject.  In  creating  a  board  of  railroad  commissioners  and 
investing  it  with  authority  to  make  rules  and  regulations  for  the 
government  of  railroads,  the  legislature  really  enacts  the  law 
which  governs  the  subject,  but  intrusts  to  the  board  the  execu- 
tion of  the  law.  For  the  law  the  statute  must  be  looked  to,  as 
the  commissioners  cannot  enact  laws,  although  they  may  make 
reasonable  rules  and  regulations  when  the  authority  to  make 
such  rules  and  regulations  is  expressly  or  impliedly  conferred 
upon  them  by  statute. ^^  Again,  inasmuch  as  a  State  has  inher- 
ent power  to  regulate  and  control  public  service  corporations, 
operating  within  its  limits,  and  to  prescribe  within  reasonable 
bounds  the  facilities  and  conveniences  which  shall  be  furnished 
by  them,  it  may  delegate  to  or  confer  this  power  upon  a  body 
such  as  a  State  corporation  commission,  although  it  possesses, 
to  some  extent,  legislative,  executive  and  judicial  powers. 
And  where  such  commission  is,  by  the  Constitution  and  laws 

19  Mobile,  Jackson  &  Kansas  City  Rd.  Co.  v.  Mississippi,  210  U.  S.  187, 
52  L.  ed.  1016,  28  Sup.  Ct.  650,  aff'g  89  Miss.  724. 

20  Gulf,  Colorado  &  Santa  Fe  Ry.  Co.  v.  State  (Tex.  Civ.  App.,  1909),  120 
S.  W.  1028,  1034. 

21  Gulf,  Colorado  &  Santa  Fe  Ry.  Co.  v.  State  (Tex.  Civ.  App.,  1909),  120 
S.  W.  1028,  1034. 

186 


SUPERVISORY   CORPORATION   COMMISSIONS   CONTINUED      §  109 

of  a  State,  given  control  over  common  carriers  of  persons  and 
goods  as  to  matters  relating  to  their  public  duties  and  charges, 
and  the  latter  are  given  full  opportunity,  upon  notice,  to  be 
heard  as  to  their  defense  and  also  a  right  of  appeal  to  the  State 
Court,  they  are  not,  by  such  legislation,  deprived  of  their  prop- 
erty without  due  process  of  law.  But  although  this  applies  to 
the  exercise  of  its  judicial  powers,  still,  in  exercising  its  legis- 
lative powers  the  commission  is  not  obligated  to  give  notice  to 
the  parties  to  be  affected  thereby.  Again,  the  subjection  of 
common  carriers  to  the  control  of  such  corporation  commission 
by  the  State  Constitution  and  laws  does  not  deny  to  them  the 
equal  protection  of  the  laws  within  the  meaning  of  that  provision 
of  the  Federal  Constitution.  The  State  Constitution  and  laws 
apply  alike  in  such  case  to  all  persons  and  companies  similarly 
situated,  and  the  classification  is  a  reasonable  one.  Nor  is  the 
commission  an  illegal  and  invalid  tribunal,  even  though  invested 
to  a  certain  extent  with  legislative,  executive  and  judicial 
powers;  nor  does  such  grant  of  powers  conflict  with  the  Bill  of 
Rights,  which  expressly  provides  that,  "Except  as  hereinafter 
provided,  the  legislative,  executive  and  judicial  departments 
shall  be  kept  separate  and  distinct."  But  where  a  choice  of 
either  of  two  methods  of  performing  a  charter  duty  is  given  a 
corporation,  it  should  not  be  limited  to  one  of  them  by  the 
commission,  nor  should  the  latter  make  any  order  affecting  the 
right  of  a  connecting  carrier  who  has  had  no  notice  and  was  not 
a  party  to  the  proceeding.^^ 

§  109.  Same  Subject — Power  to  Remove  or  Suspend 
Commissions. 

Inasmuch  as  the  railroad  commission  of  North  Carolina  is 
not  a  judicial  but  an  administrative  court  a  statute  which 
provides  for  the  suspension  and  removal  of  a  commissioner 

M  Winchester  &  Strasburg  Rd.  Co.  v.  Commonwealth,  106  Va.  264,  55 
S.  E.  692. 

What  is  not  a  delegation  of  legislative  powers  to  commission,  see  People  v. 
Delaware  &  H.  Canal  Co.,  52  N.  Y.  Supp.  850,  32  App.  Div.  120,  aff'd  165 
N.  Y.  362,  59  N.  E.  138. 

187 


§  110  JURISDICTION    OR   POWERS   OF 

will  not  be  sustained  as  unconstitutional  on  the  ground  that 
thereby  the  independent  tenure  of  the  judiciary  is  interfered 
with.^^ 

§  110.  Jurisdiction  and  Power  of  Railroad  and  Like 
Commissions — Generally. 

As  the  regulation  of  the  business  conducted  by  common 
carriers  is  one  over  which  the  legislature  has  full  power  to  act, 
ample  authority  can  by  law  be  conferred  upon  a  railroad  and 
warehouse  commission  to  call  for  information  on  any  carrier, 
whether  a  natural  or  artificial  person,  resident  or  nonresident, 
carrying  on  business  within  the  State,  where  such  information 
is  absolutely  essential  for  the  proper  conduct  of  the  carrier  and 
the  protection  of  the  public.^^  Under  a  Georgia  case  a  railroad 
company  cannot  be  compelled  by  a  railroad  commission  to 
contract  for  shipment  of  goods  beyond  its  own  line.^^  Under  a 
North  Carolina  decision,  a  State  statute  ^^  making  it  unlawful 
for  a  railroad  to  neglect  to  transport  any  goods  received  by  it 
for  a  longer  period  than  four  days  after  the  receipt  thereof  gives 
to  the  railroad  four  days'  free  time  at  the  point  of  shipment. 
And  a  statute  making  it  unlawful  for  any  railroad  to  allow  any 
goods  to  remain  at  any  intermediate  point  for  a  longer  period 
than  forty-eight  hours  unless  otherwise  provided  by  the  corpo- 
ration commission,  gives  to  the  commission  the  right  to  fix  the 
time  allowed  as  free  time  for  intermediate  points  and  to  make 
reasonable  regulations  as  to  the  time  of  transit.  But  the  corpo- 
ration commission  has  no  power  to  change  the  time  allowed  as 

23  Caldwell  (State  ex  rel.  Caldwell)  v.  Wilson,  121  N.  C.  425,  61  Am.  St. 
Rep.  672,  28  S.  E.  554. 

24  State  ex  rel.  Railroad  &  Warehouse  Commission  v.  Adams  Express 
Co.,  66  Minn.  271,  273,  38  L.  R.  A.  225,  68  N.  W.  1085,  per  Collins,  J. 

25  State  V.  Wrightsville  &  T.  Rd.  Co.,  104  Ga.  437,  30  S.  E.  891. 

As  to  power  of  railroad  commission  to  relieve  railroad  company  on  ap- 
plication of  operation  of  statutes  relating  to  transportation  of  a  particular 
commodity  between  certain  points,  see  Illinois  Central  Rd.  Co.  v.  Common- 
wealth, 23  Ky.  L.  Rep.  514,  63  S.  W.  448.  Examine  Siler  v.  Louisville  & 
Nashville  Rd.  Co.,  213  U.  S.  175,  53  L.  ed.  753,  29  Sup.  Ct.  451,  considered 
under  §  115,  herein. 

2«  Laws  N.  C.  1903,  chap.  590. 

188 


SUPERVISORY   CORPORATION    COMMISSIONS   CONTINUED      §111 

free  time  at  the  point  of  shipment,  nor  to  alter  the  penalties 
fixed  for  the  violation  of  the  statute .^^ 

§  111.  Same  Subject. 

Under  an  Oregon  decision  a  legislative  authority  given  to  a 
railroad  commission  to  examine  into  the  affairs  of  railroads  and 
report  as  to  certain  specific  matters  to  the  legislature,  docs  not 
raise  the  presumption  of  an  authority  to  adjust  the  same,  even 
though  authority  is  also  conferred  to  hear  complaints  against 
such  corporations  by  reason  of  acts  done  or  omitted  to  be  done 
by  them.2«  In  Wisconsin  while  the  legislature  cannot  properly 
delegate  authority  to  a  commission  to  determine  what  power 
a  corporation  shall  possess,  still  it  may  clothe  a  commission  with 
authority  to  determine  whether  the  facts  exist  rendering  a 
corporation  competent  to  exercise  its  corporate  powers  in  a 
given  case.  A  legislative  grant  of  authority  to  a  commission  to 
determine  whether  a  corporation  may  do  a  particular  thing 
proposed  by  the  latter  to  be  done  implies  authority  to  determine 
corporate  competency  in  that  regard  tested  by  the  charter.^" 
Under  a  Virginia  decision  where  a  choice  of  one  of  two  methods 
is  given  to  a  railroad  corporation  of  performing  a  charter  duty, 
it  is  error  for  a  State  corporation  commission  to  limit  them  to 
one  of  such  methods  in  directing  the  performance  of  that  duty.^" 
Under  a  Texas  decision  the  Constitution  of  that  State  ^^  em- 

27  Summers  v.  Railroad,  138  N.  C.  295,  50  S.  E.  714.  The  syllabus  to  this 
case  in  the  Southeastern  Reporter  reads  as  follows:  "Laws  1903,  p.  999, 
c.  590,  §  3,  providing  that  it  shall  be  unlawful  for  any  railroad  company  to 
omit  to  transport  any  goods  received  by  it  for  shipment  for  a  longer  period 
than  four  days  after  receipt  thereof,  unless  otherwise  agreed  upon  between 
the  parties,  or  unless  the  same  be  destroyed,  or  to  allow  any  such  goods  to 
remain  at  any  intermediate  point  more  than  forty-eight  hours,  unless  other- 
wise provided  by  the  Corporation  Commission,  confers  power  on  the  com- 
mission to  fix  the  time  allowed  as  free  time  for  intermediate  points,  and  to 
make  regulations  as  to  the  time  of  transit,  but  not  to  change  the  time  al- 
lowed as  free  time  at  the  point  of  shipment,  nor  to  alter  the  penalties. 

28  Oregon  Railroad  Comm'rs  v.  Oregon  Rd.  &  Nav.  Co.,  17  Ore.  65,  19 
Pac.  702,  2  L.  R.  A.  195. 

29  State  ex  rel.  Minneapolis,  St.  Paul  &  Sault  Ste.  Marie  Ry.  Co.,  v.  Rail- 
road Commission,  137  Wis.  80,  117  N.  W.  846. 

30  Winchester  &  Strasburg  Rd.  Co.  v.  Commonwealth,  106  Va.  264. 

31  Article  10,  §  2. 

180 


§  112  JURISDICTION   OR   POWERS   OF 

powers  and  directs  the  legislature  to  enact  laws  to  "correct 
abuses"  on  the  different  railroads  in  this  State,  and  this  embra- 
ces the  right  and  duty  to  pass  laws  for  the  correction  of  all 
abuses  or  improper  uses  of  the  franchises  which  had  been  or 
might  be  granted  to  railroads  in  this  State,  as  well  as  all  abuses 
connected  with  or  growing  out  of  the  business  transacted  in  the 
exercise  of  such  franchises.  The  power  was  not  limited  to  the 
correction  of  abuses  in  the  rates  of  freight  and  passenger 
tariffs.  The  same  construction  and  effect  is  to  be  given  to  the 
power  to  "correct  abuses"  conferred  by  the  legislature  on  the 
railroad  commission  ^^  and  the  powers  conferred  thereby  are 
not  limited  to  regulation  of  freight  and  passenger  tariffs.  It 
seems  that  the  power  of  the  railroad  commission  to  correct 
abuses  extends  only  to  such  as  are  defined  by  law,  and  does  not 
give  authority  to  enact  a  law  defining  what  is  an  abuse .^^  Un- 
der the  English  Regulation  of  Railways  Act  ^*  railway  commis- 
sioners have  power  to  issue  a  writ  of  attachment  or  to  impose  a 
penalty  not  exceeding  a  certain  sum  for  disobedience  to  their 
orders.*^ 

§  112.  Nature  of  Jurisdiction  and  Powers  of  Railroad 
Commissions. 

The  Railroad  Commission  of  Mississippi  is  not  a  court  but  a 
mere  administrative  agency  of  the  State.^^  The  North  Carolina 
Railroad  Commission  established  by  the  act  of  1891  of  that 
State  is  purely  of  legislative  origin,  and  is  an  administrative  and 

32  Rev.  Stats.,  Arts.  4562-4569. 

33  Syllabus  in  Railroad  Commission  v.  Houston  &  Texas  Cent.  Ry.  Co., 
90  Tex.  340,  38  S.  W.  750. 

As  to  effect  of  order  of  railroad  commission  compelling  carriers  to  receive 
loaded  cars  for  transportation  over  its  own  line,  to  haul  the  same  over  its 
own  line  and  its  junction  with  the  next  connecting  line  and  deliver  them  for 
transportation  to  a  connecting  line,  without  compensation  for  loss  or  de- 
livery of  cars  when  beyond  its  own  control,  see  Gulf,  Colorado  &  Santa  Fe 
Ry.  Co.  V.  State  (Tex.  Civ.  App.,  1909),  120  S.  W.  1028. 

34  Of  1873,  §  6. 

35  So  held  by  Queen's  Bench  Division  of  the  High  Court  of  Justice,  Chat- 
terly  Iron  Co.  v.  North  Staffordshire  Ry.  Co.  (1878),  3  Ry.  &  Can.  Cas.  238. 

38  Mississippi  Railroad  Commission  v.  Illinois  Central  Rd.  Co.,  203  U.  S. 
335,  27  Sup.  Ct.  90,  51  L.  ed.  209,  aff'g  138  Fed.  327. 

190 


SUPERVISORY   CORPORATION   COMMISSIONS   CONTINUED      §  113 

not  a  judicial  court,  and  though,  by  subsequent  statute,  the 
commission  was  made  a  court  of  record,  the  object  and  effect 
of  such  amending  statute  was  simply  to  give  authority  to  its 
records  and  proceedings  and  added  nothing  to  its  powers.^^ 
Whether  or  not  certain  provisions  of  the  Texas  statute  of  1891, 
establishing  a  railroad  commission  with  power  to  classify  and 
regulate  rates,  are  valid,  the  remainder  of  that  act  is  a  valid  and 
constitutional  exercise  of  the  State  sovereignty,  and  the  commis- 
sion created  thereby  is  an  administrative  board,  created  for 
carrying  into  effect  the  will  of  the  State,  as  expressed  by  its 
legislation.^*  It  is  held  that  the  State  Corporation  Commission 
of  Virginia  acts  judicially  in  determining  the  liability  of  a 
corporation  for  a  fine  or  forfeiture  imposed  by  a  statute  which 
such  commission  is  required  to  enforce,  and  it  may  declare  the 
act  imposing  such  fine  or  forfeiture  unconstitutional.^® 

§  113.  Jurisdiction  of  Railroad  Commissions — Rates. 

Under  a  State  statute  the  duty  of  enforcing  such  rates  as  it 
may  fix  may  be  vested  in  a  railroad  commission. '*°   The  author- 

37  Caldwell  v.  Wilson,  121  N.  C.  425,  28  S.  E.  554.  See  Pate  (State  ex  rel. 
Board  of  Rd.  Comm'rs)  v.  Wilmington  &  Weldon  Rd.  Co.,  122  N.  C.  877, 
29  S.  E.  334,  11  Am.  &  Eng.  R.  Cas.  (N.  S.)  671,  considered  under  §  140, 
herein. 

38  Reagan  v.  Farmers'  Loan  &  Trust  Co.,  154  U.  S.  352,  38  L.  ed.  1014, 
14  Sup.  Ct.  1047,  followed  Id.,  154  U.  S.  420,  38  L.  ed.  1031,  14  Sup.  Ct.  1062. 

39  Commonwealth  v.  Atlantic  Coast  Line  Ry.  Co.,  106  Va.  61.  Mr.  Jus- 
tice Holmes,  in  his  opinion  in  Prentis  v.  Atlantic  Coast  Line  Co.,  211  U.  S. 
210,  224,  53  L.  ed.  150,  29  Sup.  Ct.  67,  remarks  that  the  Virginia  State 
corporation  commission  exercises  among  its  duties  "the  authority  of  the 
State  to  supervise,  regulate  and  control  public  service  corporations,  and 
to  that  end,  as  is  said  by  the  Supreme  Court  of  Virginia  *  *  *  it  has 
been  clotiied  with  legislative,  judicial  and  extensive  powers.  Norfolk  & 
Portsmouth  Belt  Line  Rd.  Co.  v.  Commonwealth,  103  Va.  289,  294." 

40  McChord  v.  Louisville  &  N.  R.  Co.,  183  U.  S.  483,  46  L.  ed.  289,  22  Sup. 
Ct.  165. 

Duty  of  railroad  commissioners  to  make  rates  relates  to  the  subjects  of 
transportation  rather  than  to  particular  persons  or  comporations.  State  v. 
Atlantic  Coast  Line  Rd.  Co.  (Fla.),  40  So.  875. 

As  to  delegation  to  railroad  commissioners  as  to  mileage  tickets  on  rail- 
roads, when  valid,  see  Attorney  General  v.  Old  Colony  Rd.  Co.,  160  Mass. 
62,  35  N.  E.  252,  22  L.  R.  A.  1112. 

When  railroad  commission  no  jurisdiction  to  compel  railroad  to  reinstate 

191 


§  113  JURISDICTION   OR   POWERS   OP 

ity  vested  in  a  railroad  and  warehouse  commission  to  determine, 

in  the  exercise  of  their  discretion  and  judgment  what  are  equal 

and  reasonable  rates  and  fares  for  the  transportation  of  persons 

former  lower  competitive  rate,  see  Edson  v.  Southern  Pacific  Co.,  133  Cal. 
25,  65  Pac.  15. 

.See  the  following  English  decisions: 

Jurisdiction  of  railway  commissioners  to  require  railway  company  to 
distinguish  in  rate  books  quantum  for  conveyance,  etc.,  under  Regulation 
of  Railways  Act,  1873  (36  &  37  Vict.,  chap.  48),  s.  14.  See  Pickford's,  Lim- 
ited, V.  London  &  Northwestern  Ry.  Co.  (1905),  12  Ry.  &  Can.  Traff.  Cas. 
154. 

Jurisdiction  of  railway  commissioners;  whether  railway  company  can 
be  called  upon  to  justify  increase  of  rates,  lowered  but  reraised  under  Rail- 
way &  Can.  Traff.  Act,  1894  (57  &  38  Vict.,  chap.  54),  s.  1,  and  Act,  1888 
(51  &  52  Vict.,  chap.  25),  s.  29.  See  Millon  &  Askam  Hematic  Iron  Co.  v. 
Furness  Ry.,  12  Ry.  &  Can.  Traff.  Cas.  1.  Examine  Rishworth  v.  North- 
eastern Ry.,  12  Ry.  &  Can.  Traff.  Cas.  34. 

Jurisdiction  of  railway  commissioners  to  rescind  a  through  rate;  reason- 
able facility,  see  Great  Northern  Ry.  Co.  (Ireland)  v.  Donegal  Ry.  Co. 
(1901),  11  Ry.  &  Can.  Traff.  Cas.  47;  Ry.  &  Canal  Traff.  Act,  1854  (17  & 
18  Vict.,  chap.  31),  s.  2,  and  Act,  1888  (51  &  52  Vict.,  chap.  25),  ss.  9, 
25. 

Jurisdiction  of  railway  commissioners  as  to  proposed  reduction  of  rate; 
creation  of  undue  preference,  see  Taff  Vale  Ry.  Co.,  In  re  (1900),  11  Ry.  & 
Can.  Traff.  Cas.  89  [application  to  commissioners  imder  Ry.  &  Can.  Traff. 
Act,  1888  (51  &  52  Vict.,  chap.  25),  s.  29,  subs.  3]. 

Jurisdiction  of  railway  commissioners  to  grant  through  booking  with- 
out a  through  rate,  as  reasonable  facilities,  see  Didcot,  Newbury  &  South- 
ampton Ry.  Co.  V.  Great  Western  Ry.  Co.,  etc.  (1896),  10  Ry.  &  Can.  Traff. 
Cas.  1,  9,  under  Ry.  &  Can.  Traff.  Act,  1854  (17  &  18  Vict.,  chap.  31),  s.  2, 
and  Act,  1888  (51  &  52  Vict.,  chap.  25),  s.  25.  As  to  jurisdiction  of  railway 
commissioners  to  hear  and  determine  complaint  as  to  unreasonableness  of 
increased  rate  or  charge  for  cartage,  see  Mansion  House  Association  on  Ry. 
&  Canal  Traffic,  etc.,  v.  London  &  Northwestern  Ry.  Co.,  9  Ry.  &  Can. 
Traff.  Cas.  (1896),  174,  apphcation  under  Ry.  &  Can.  Traff.  Act,  1894  (57  & 
58  Vict.,  chap.  54),  s.  1. 

Jurisdiction  of  railway  commissioners;  application  for  order  enjoining 
railway  company  to  desist  charging  passengers  fares  in  excess  of  the  sums 
stated  in  the  Company's  Act,  1847  (10  &  11  Vict.,  chap.  226,  s.  49).  Com- 
plaint was  founded  on  obHgation  imposed  on  railway  companies  by  the 
English  Ry.  &  Can.  Traff.  Act,  1854,  s.  2,  to  grant  "all  reasonable  facili- 
ties." See  Brown  v.  Great  Western  Ry.  Co.  (1881),  3  Ry.  &  Can.  Cas.  523. 
See  also  Chatterly  Iron  Co.  v.  North  Staffordshire  Ry.  Co.  (1878),  3  Ry.  & 
Can.  Cas.  238  (illegal  and  excessive  charges  for  conveyance  of  traffic  does 
not  afford  all  reasonable  facilities  within  English  Ry.  &  Can.  Traff.  Act, 
1854,  s.  2);  Aberdeen  Commercial  Co.,  etc.,  v  Great  North  of  Scotland  Ry. 
Co.  (1878),  3  Ry.  &  Can.  Traff.  Cas.  205. 

192 


SUPERVISORY    CORPORATION    COMMISSIONS    CONTINUED      §  114 

and  property  by  a  railway  company  is  not  a  delegation  of 
legislative  power."*^ 

The  act  of  the  legislature  of  Minnesota,  creating  a  railroad 
commission,  is  not  unconstitutional  in  assuming  to  establish 
joint  through  rates  or  traffic  over  the  lines  of  independent  con- 
necting railroads,  and  apportionating  and  dividing  the  joint 
earnings.  Such  a  commission  has  a  clear  right  to  pass  upon  the 
reasonableness  of  contracts  in  which  the  public  is  interested, 
whether  such  contracts  be  made  directly  with  the  patrons  of 
the  road  or  for  a  joint  action  between  railroads  in  the  trans- 
portation of  persons  and  property  in  which  the  public  is  indi- 
rectly concerned.  And  whether  or  not  connecting  roads  may  be 
compelled  to  enter  into  contracts  as  between  themselves,  and 
establish  joint  rates,  it  is  none  the  less  true  that  where  a  joint 
tariff  between  two  or  more  roads  has  been  agreed  upon  such 
tariff  is  as  much  within  the  control  of  the  legislature  as  if  it 
related  to  transportation  over  a  single  line.  The  presumption 
is  that  the  rates  fixed  by  the  commission  are  reasonable,  and 
the  burden  of  proof  is  upon  the  railroad  company  to  show  the 
contrary.  A  tariff  fixed  by  the  commission  for  coal  in  carload 
lots  is  not  proved  to  be  unreasonable,  by  showing  that  if  such 
tariff  were  applied  to  all  freight  the  road  would  not  pay  its  op- 
erating expenses,  since  it  might  well  be  that  the  existing  rates 
upon  other  merchandise,  which  were  not  disturbed  by  the  com- 
mission, might  be  sufficient  to  earn  a  large  profit  to  the  com- 
pany, though  it  might  earn  little  or  nothing  upon  coal  in  car- 
load lots.^' 

§  114,  Same  Subject. 

An  act  of  incorporation,  which  confers  upon  the  directors 
of  a  railroad  company  the  power  to  make  by-laws,  rules  and 
regulations  touching  the  disposition  and  management  of  the 
company's  property  and  all  matters  appertaining  to  its  con- 

«  State  V.  Chicago,  Milwaukee  &  St.  Paul  Ry.  Co.,  38  Minn.  281,  37  N.  W. 
72. 

*2  Minneapolis  &  St.  Louis  Ry.  Co.  v.  Minnesota,  18G  U.  S.  257,  22  Sup. 
Ct.  900,  46  L.  ed.  1151. 

13  193 


§  115  JURISDICTION    OR   POWERS   OF 

cerns,  confers  no  right  which  is  violated  by  the  creation  of  a 
State  railroad  commission,  charged  with  the  general  duty  of 
preventing  the  exaction  of  unreasonable  or  discriminating  the 
rates  upon  transportation  done  within  the  limits  of  the  State, 
and  with  the  enforcement  of  reasonable  police  regulations  for 
the  comfort,  convenience  and  safety  of  travelers  and  persons 
doing  business  with  the  company  within  the  State.^^  Under 
a  Massachusetts  decision  the  authority  of  the  board  of  railroad 
commissioners  **  is  not  to  consider  the  general  subject  of  rates, 
but  "to  ascertain  at  what  rates  facilities  for  the  carriage  of 
milk  under  contract  or  in  large  quantities  are  furnished  by  the 
railroad  corporation,"  and  to  compare  them  with  the  tariff  for 
the  carriage  of  milk  by  the  can,  to  fix  rates  by  the  can  "fairly 
proportionate  with  such  contract  or  large  quantity  rates." 
The  order  when  made  is  to  have  the  force  and  effect  of  a  criminal 
statute  which  calls  for  strictness  and  regularity  of  proceedings 
under  it.^  The  creation  of  a  railroad  or  corporation  commis- 
sion by  statute  of  a  State  may  operate  as  a  repeal  of  a  statute 
empowering  railroads  to  fix  passenger  rates,  or  a  statute  giving 
such  authority  to  railroads  may  repeal  an  enactment  creating 
such  commission  or  extending  its  powers."*® 

§  115.  When  Railroad  Commission  Is  Without  Jurisdic- 
tion— Rates. 

Jurisdiction  so  extensive  as  to  place  in  the  hands  of  a  rail- 
road commission  power  to  make  general  maximum  rates  for  all 
commodities  between  all  points  in  a  State  is  not  to  be  implied, 
but  must  be  given  in  language  admitting  no  other  reasonable 
construction ;  and  the  fact  that  the  legislature  of  a  State  gives 
to  such  a  commission  no  power  to  raise  rates,  but  only  power 
to  reduce  rates  found  to  be  exorbitant  after  hearing  on  specific 
complaint  is  an  argument  against  construing  the  statute  so  as 

43  Railroad  Commission  Cases  (Stone  v.  Farmers'  Loan  &  Trust  Co.),  116 
U.  S.  307,  29  L.  ed.  636,  6  Sup.  Ct.  334. 

**  Under  Pub.  Stat.,  chap.  112,  §§  192-194. 

«  Syllabus  in  Littlefield  v.  Fitchburg  Rd.  Co.,  158  Mass.  1,  32  N.  E.  859. 

48  Southern  Ry.  Co.  v.  McNeill,  155  Fed.  756.  See  Matthews  v.  Board  of 
Corporation  Comm'rs  of  N.  C,  97  Fed.  400. 

194 


SUPERVISORY   CORPORATION   COMMISSIONS   CONTINUED      §  115 

to  give  the  commission  power  to  fix  inaximum  rates  on  all 
commodities.  Again,  where  such  commission  after  hearing  on 
specific  complaint  as  to  a  rate  on  a  particular  conmiodity  makes 
a  general  rate  tariff  for  maxinmm  rates  on  all  commodities 
which  is  beyond  its  statutory  power,  the  whole  tariff  falls,  and 
the  rate  on  the  tariff  on  the  particular  commodity  will  not  be 
separately  sustained.  Therefore,  where  a  State  railroad  com- 
mission having,  after  a  hearing  on  complaints  that  the  rates 
on  lumber  were  too  high,  attempted  to  impose  a  general  maxi- 
mum intrastate  tariff  schedule,  and  the  statute  creating  the 
commission  not  giving  it  authority  to  make  such  a  schedule,  it 
was  held  by  the  Federal  Supreme  Court,  without  deciding 
whether  either  the  statute  or  the  order  deprived  the  railroad 
companies  of  their  property  without  due  process  of  law,  that 
the  entire  schedule  of  rates  must  fall  as  being  beyond  the  juris- 
diction of  the  commission  to  establish  in  that  manner.^^  So  a 
State  constitutional  provision  regulating  rates  or  compensation 
for  long  and  short  hauls  with  a  proviso  authorizing  the  railroad 
commission  upon  application  to  prescribe  the  extent  of  relief 
which  might  be  granted  or  carried  from  the  operation  of  the 
provision  is  invalid  where  it  affects  or  is  made  applicable  to 
interstate   commerce.'**     A   statute   creating   a   railroad   and 

<7  Siler  V.  Louisville  &  Nashville  Rd.  Co.,  213  U.  S.  175,  53  L.  ed.  753, 
29  Sup.  Ct.  451.  The  jurisdiction  of  the  United  States  Circuit  Court,  also 
the  rule  of  the  Federal  Supreme  Court  as  to  constitutional  questions  not  de- 
cided were  involved  as  noted  elsewhere  herein.  The  Kentucky  railroad 
commission  law  was  the  one  under  discussion.  The  bill  was  by  a  railroad 
company  in  the  Federal  Circuit  Court  for  the  Eastern  District  of  Kentucky 
to  enjoin  enforcement  of  order  of  the  commission  providing  maximum  rates 
on  transportation  of  all  commodities  upon  railroads  to  and  from  all  points 
within  the  State.  Examine  Illinois  Central  Rd.  Co.  v.  Commonwealth,  23 
Ky.  L.  Rep.  544,  63  S.  W.  448. 

«  Louisville  &  Nashville  Rd.  Co.  v.  Eubank,  184  U.  S.  27,  22  Sup.  Ct.  277, 
46  L.  ed.  416.  The  section  (Const.  Ky.,  §  218)  reads  as  follows:  "It  shall  be 
unlawful  for  any  person  or  corporation,  owning  or  operating  a  railroad  in 
this  State,  or  any  common  carrier,  to  charge  or  receive  any  greater  com- 
pensation in  the  aggregate  for  the  transportation  of  passengers,  or  of  prop- 
erty of  like  kind,  under  substantially  similar  circumstances  and  conditions, 
for  a  shorter  than  for  a  longer  distance  over  the  same  line,  in  the  same 
direction,  the  shorter  being  included  within  the  longer  distance;  but  this 
shall  not  be  construed  as  authorizing  any  common  carrier,  or  person  or 

195 


§  116  JURISDICTION    OR    POWERS    OF 

warehouse  commission  is  unconstitutional  where  it  makes  the 
rates  fixed  by  such  commission  final  and  conclusive  and  de- 
prives a  railroad  company  of  its  right  to  judicial  investigation 
by  due  process  of  law."*^  Again,  a  legislative  authority  given 
to  a  board  of  railroad  commissioners,  under  the  act  creating  it, 
to  examine  into  the  affairs  of  railroad  companies  doing  business 
in  the  State  and  make  reports  to  the  legislature  with  certain 
suggestions  as  to  classification  and  rate  changes  in  freights  or 
fares  without  any  express  delegation  of  authority  to  regulate  or 
determine  the  unreasonableness  of  such  freight  rates,  does  not 
vest  jurisdiction  in  the  commission  to  require  excessive  freight 
charges  to  be  refunded  .^° 

§  116.  Jurisdiction  of  Railroad  Commissions — ^Increase 
of  Capital  Stock  of  Corporations. 

Under  a  Minnesota  decision  the  legislature  may  pass  a  statute 
providing  generally  for  what  purposes  and  upon  what  terms, 
conditions  and  limitations  an  increase  of  capital  stock  may  be 
made,  and  it  may  confer  upon  a  commission  (a  railroad  and 
warehouse  commission)  the  administrative  duty  of  supervis- 
ing any  proposed  increase  of  stock.  It  may  also  delegate  to 
the  commission  the  duty  of  finding  the  facts  in  each  particu- 
lar case,  and  empower  and  require  rt  to  allow  the  proposed 
increase  where  the  facts  exist  which  bring  the  case  within  the 
statute.  But  the  legislature  cannot,  by  any  statute,  authorize 
such  commission  in  its  judgment  to  allow  an  increase  of  a  cor- 
poration's capital  stock  for  such  purposes  and  on  such  condi- 

corporation,  owning  or  operating  a  railroad  in  this  State,  to  receive  as  great 
compensation  for  a  shorter  as  for  a  longer  distance:  Provided,  that  upon 
application  to  the  Railroad  Commission,  such  common  carrier,  or  person 
or  corporation,  owning  a  railroad  in  this  State,  may  in  special  cases,  after 
investigation  by  the  Commission,  be  authorized  to  charge  less  for  longer 
than  for  shorter  distances  for  the  transportation  of  passengers  or  property, 
and  the  commission  may,  from  time  to  time,  prescribe  the  extent  to  which 
such  common  carrier,  or  person  or  corporation,  owning  or  operating  a 
railroad  in  this  State,  may  be  relieved  from  the  operation  of  this  section." 

49  Chicago,  Milwaukee  &  St.  Paul  Ry.  Co.  v.  Minnesota,  134  U.  S.  418, 
33  L.  ed.  970,  10  Sup.  Ct.  462,  702. 

50  Oregon  Railroad  Comm'rs  v.  Oregon  Rd.  &  Nav.  Co.,  17  Ore.  65,  19 
Pac.  702,  2  L.  R.  A.  195. 

196 


SUPERVISORY    (.'ORPORATION    COMMISSIONS    CONTINUED      §  116 

tions  or  terms  as  it  shall  or  may  deem  advisable,  or  in  its 
discretion  to  refuse  it,  as  such  an  attempt  to  confer  authority 
would  be  a  delegation  of  legislative  power.  And  where  the 
statute  does  delegate  to  a  commission  such  legislative  power, 
it  is  unconstitutional  and  void;  a  distinction  exists  between 
the  delegation  of  legislative  powers  and  administrative  duties; 
that  between  the  delegation  of  power  to  make  a  law,  which 
involves  a  discretion  as  to  which  it  shall  be,  and  the  conferring 
an  authority  or  discretion  to  be  exercised  under  and  in  pur- 
suance of  the  law.^^  The  Railroad  Commission  of  Wisconsin 
also  has  authority  to  pass  upon  the  competency  of  a  railroad 
corporation  to  increase  its  capital  stock  and  to  refuse  permis- 
sion in  that  regard  in  case  the  articles  of  incorporation  shall  not 
have  been  so  broadened  as  to  cover  the  subject  by  a  valid 
amendment  which  requires  a  public  record  of  the  change  to  be 
made  in  the  office  of  the  Secretary  of  State  and  compliance 
with  the  conditions  precedent  thereto  in  respect  to  the  pay- 
ment of  fees.^- 

51  State  V.  Great  Northern  Ry.  Co.,  100  Minn.  445,  10  L.  R.  A.  (N.  S.) 
250,  111  N.  W.  289. 

52  State  ex  rel.  Minneapolis,  St.  Paul  &  Sault  Ste.  Marie  Ry.  Co.  v.  Rail- 
road Commission,  137  Wis.  80,  117  N.  W.  846.  A  case  of  mandamus  pro- 
ceedings to  require  the  State  railroad  commission  to  furnish  relator  with 
a  certificate  of  authority  to  issue  stock  in  addition  to  that  originally  author- 
ized by  the  articles  of  association.  There  was  involved  the  question  of  the 
scope  of  the  commissioners'  power  relative  to  the  issue  of  stock,  stock  certifi- 
cates, bonds,  or  other  evidences  of  indebtedness  by  railroad  corporations. 
"  The  key  to  the  law  "  (statute)  "  is  contained  in  the  declaration,  in  effect,  that 
no  corporate  stock,  stock  certificates,  bonds,  or  other  evidences  of  indebted- 
ness shall  be  issued  by  any  public  service  corporation  except  upon  the  au- 
tliority  of  the  commission  first  obtained.  That,  of  course,  does  not  imply 
authority  for  the  commission  to  interfere  with  the  mere  business  policy  of 
a  corporation  within  its  corporate  powers,  which  *  *  *  would  be  an 
illegitimate  delegation  of  authority.  State  v.  Great  Northern  Ry.  Co.,  100 
Minn.  445,  111  N.  W.  289.  It  does  unmistakably  show  a  purpose  to  lodge 
in  the  railroad  commission  power  to  pass  upon  questions  of  fact  involved 
in  whether  a  public  service  corporation,  desiring  to  do  any  of  the  things 
mentioned  is  competent  in  that  regard,  having  reference  to  the  written  law 
on  the  subject.  The  seat  of  original  power  is  in  the  legislature;  it  cannot 
legitimately  delegate  it.  It  can  properly  clothe  a  commission  with  capacity 
to  determine  whether  corporate  rights  created  by  the  legislature  are  exer- 
cisable, that  depending  upon  the  existence  of  facts  satisfying  legal  con- 

197 


§  117  JURISDICTION    OR   POWERS   OF 

§  117.  Jurisdiction  of  Public  Service  Commission— Issue 
of  Stocks  and  Bonds  by  Corporations. 

The  paramount  purpose  of  the  enactment  of  the  Public 
Service  Commissions  Law  of  New  York  was  the  protection  and 
enforcement  of  the  rights  of  the  public.  One  of  the  legislative 
])urposes  in  the  enactment  of  the  statute  was  to  prevent  the 
issue  of  stocks  and  bonds  by  public  service  corporations,  if, 
upon  an  investigation  of  the  facts,  it  was  found  that  they  were 
not  for  the  purposes  of  the  corporation  enumerated  by  the 
statute  and  reasonably  required  therefor.  It  was  not,  however, 
designed  to  make  the  commissioners  the  financial  managers  of 
the  corporation  or  to  empower  them  to  substitute  their  judg- 
ment for  that  of  the  board  of  directors  or  stockholders  as  to  the 
wisdom  of  a  transaction.  While  the  ownership  of  property  or- 
dinarily carries  with  it  the  right  of  management,  the  duty 
devolves  upon  the  owner  to  so  manage  as  not  to  have  it  become 
a  nuisance  or  unnecessarily  infringe  upon  the  rights  of  others. 
It  was,  therefore,  evidently  the  legislative  intent  in  the  enact- 
ment of  this  provision  that  the  commissioners  should  have 
supervision  over  the  issuing  of  long-time  bonds  by  the  public 
service  corporations  enumerated  in  §  55  of  the  Public  Service 
Commission  Law  to  the  extent  of  determining  whether  they 
were  issued  under  and  in  conformity  with  the  provisions  of  the 
statute  for  the  purposes  mentioned  therein,  or  whether  they 
were  issued  for  the  discharge  of  the  actual  and  not  the  fictitious 
debts  of  the  company,  or  whether  they  were  issued  for  the 
refunding  of  its  actual  obligations  and  not  for  the  inflation  of 
its  stocks  or  bonds.  Beyond  this  the  power  of  the  commis- 
sioners does  not  extend,  unless  it  may  pertain  to  the  power  to 
determine  whether  an  obligation  should  be  classified  as  operat- 
ing expenses  and  as  to  whether  such  expenses  should  be  paid 

ditions  precedent  in  that  regard,  and  give  to  the  corporation  invoking  its 
jurisdiction  evidences  of  its  determination.  It  would  be  highlj^  unreason- 
able to  conclude  that  the  legislature  purposed  empowering  the  commission 
to  authorize  the  doing  of  the  things  mentioned  in  the  act  in  any  other  sense. 
The  grant  of  power  to  authorize  suggests  by  necessary  implication  the  grant 
of  power  to  pass  upon  the  underlying  questions.  The  former  includes  the 
latter."     Id.,  86,  87,  per  Marshall,  J. 

198 


SUPERVISORY   CORPORATION   COMMISSIONS   CONTINUED      §  117 

by  obligations  running  beyond  a  year.  The  Public  Service 
Commission  Law^^  authorizes  a  eommon  carrier,  upon  secur- 
ing from  the  proper  public  service  commission  an  order  so  to 
do,  to  issue  stocks,  bonds,  notes  or  other  evidence  of  indebted- 
ness, among  other  things,  for  the  discharge  or  lawful  refunding 
of  its  obligations,  and  authorizes  such  commission  to  investi- 
gate for  the  purpose  of  enabling  it  to  determine  whether  it 
should  grant  such  an  order.  The  relator  made  an  application 
for  an  order  to  issue  bonds  secured  by  a  mortgage  already 
given  for  the  purpose  of  paying  outstanding  indebtedness,  the 
amount  and  validity  of  which  indebtedness  was  not  questioned. 
The  indebtedness  had  accrued  by  the  purchase  of  securities, 
which  transaction  the  public  service  commission  regarded  as  an 
unfortunate  one  for  the  company;  that  it  had  paid  more  than 
the  securities  were  worth  and  that  the  property  so  acquired 
had  not  been  included  in  the  mortgage.  Although  it  conceded 
that  the  purchase  was  lawful  and  that  the  notes  were  valid 
obligations  of  the  company,  the  commission  withheld  consent 
to  the  issuing  of  the  bonds.  Relator  also  applied  for  leave  to 
issue  bonds  to  pay  indebtedness  incurred  for  the  acquisition 
of  other  property,  which  was  refused,  apparently  upon  the 
ground  that  the  lands  so  acquired  should  have  been  mortgaged 
for  the  purpose  of  paying  such  obligations.  It  was  held  that 
the  application  of  the  relator  to  issue  the  bonds  should  have 
been  granted.^'*  The  decision  of  the  court  below  in  this  case 
was  as  follows :  §  55  of  the  Public  Service  Commission  Law, 
requiring  public  service  corporations  to  obtain  an  order  from 
the  Public  Service  Commissioners  authorizing  an  issue  of  bonds 
and  determining  the  amount  thereof,  was  designed  to  pro- 
tect the  public  and  the  public  interests.  The  commission  is 
not  justified  in  withholding  its  consent  unless  the  proposed 
bond  issue  is  in  conflict  with  public  interest.  Otherwise  the 
right  of  such  corporation  to  manage  its  own  affairs  is  protected 
by  the  Constitution.  The  Public  Service  Commission,  there- 
fore, should  not  refuse  to  grant  an  order  authorizing  a  corpora- 

53  Laws  1907,  chap.  429,  §  55. 

84  People  ex  rel.  Delaware  &  Hudson  Co.  v.  Stevens,  197  N.  Y.  1. 

199 


§  118  JURISDICTION    OR    POWERS    OF 

tion  owning  and  operating  both  railroads  and  coal  mines  to 
issue  bonds  secured  only  by  a  mortgage  on  its  railroad  property, 
but  not  covering  its  coal  mines,  for  the  purpose  of  refunding 
outstanding  obligations  where  it  does  not  appear  that  the 
public  interests  are  in  any  way  imperiled .^^ 

§  118.  Jurisdiction  of  Railroad  Commissions — Stopping 
Interstate  Trains.^^ 

While  a  State  railroad  commission  may,  in  the  absence  of 
congressional  legislation,  order  a  railroad  company  to  stop 
interstate  trains  at  stations  where  there  is  only  an  incidental 
interference  with  interstate  commerce,  based  on  a  legal  exer- 
cise of  the  police  power  of  the  State  exerted  to  secure  proper 
facilities  for  the  citizens  of  the  State,  still,  where  the  railroad 
company  has  furnished  all  proper  and  reasonable  facilities, 
such  an  order  is  an  improper  and  illegal  interference  with  inter- 
state commerce  and  void  as  a  violation  of  the  commerce  clause 
of  the  Constitution."  ''The  matter  of  the  validity  of  statutes, 
directing  railroad  companies  to  stop  certain  of  their  trains  at 
stations  named,  has  been  before  this  court  several  times,  and 
the  result  of  its  holdings  is:  That  a  statute  of  Illinois,  which 
required  the  Illinois  Central  Railroad  to  stop  its  fast  mail  train 
from  Chicago  to  New  Orleans  at  Cairo,  in  the  State  of  Illinois, 

65  People  ex  rel.  Delaware  &  Hudson  Co.  v.  Stevens,  134  App.  Div.  99. 

As  presenting  the  view  taken  of  this  case,  as  set  forth  in  the  syllabus 
thereto,  in  118  N.  Y.  Supp.  969,  we  append  that  syllabus  as  follows:  The 
PubUc  Service  Commission  Law,  Laws  1907,  p.  921,  chap.  429,  §  55,  provid- 
ing for  the  approval  by  the  commission  of  the  issuance  of  bonds  by  public 
service  corporations,  is  valid  only  as  an  exercise  of  the  right  of  the  State  to 
protect  the  public  and  the  pubhc  interests,  and  the  commission  may  not 
withhold  its  approval  unless  it  clearly  appears  that  the  act  of  the  corpora- 
tion in  the  management  of  its  affairs  is  in  conflict  with  the  public  interests. 
And  where  a  corporation  organized  to  own  and  operate  railroads  and  coal 
lands  proposed  to  issue  bonds  secured  by  a  mortgage  of  railroad  property 
alone  and  the  public  interests  would  not  be  imperiled  thereby,  the  Public 
Service  Commission  must  approve  the  issue  as  required  by  Public  .Service 
Commission  Law,  Laws  1907,  p.  921,  chap.  429,  §  55,  and  they  could  not 
insist  that  the  mortgage  should  include  coal  lands  as  well. 

*8  See  §  50,  herein. 

w  Mississippi  Railroad  Commission  v.  Illinois  Central  Rd  Co.,  203  U.  S. 
335,  51  L.  ed.  209,  27  Sup.  Ct.  90,  aff'g  138  Fed.  327. 

200 


SUPERVISORY   CORPORATION   COMMISSIONS   CONTINUED      §  118 

which  was  a  county  seat,  was  unconstitutional  if  the  company 
had  made  adequate  accommodation  by  other  trains  for  inter- 
state passengers  to  and  from  Cairo.^^  That  a  statute  which  re- 
quired every  railroad  corporation  to  stop  all  regular  passenger 
trains,  running  wholly  within  the  State,  at  its  stations  at  all 

58  Illinois  Central  Rd.  Co.  v.  Illinois,  163  U.  S.  142,  41  L.  ed.  107,  16  Sup. 
Ct.  1096.  In  this  case  the  act  of  Congress  of  Sept.  20,  1850,  c.  61,  granted  a 
right  of  way  and  sections  of  the  pubhc  lands,  to  the  State  of  Illinois,  and  to 
States  south  of  the  Ohio  River,  to  and  in  the  construction  of  a  railroad  con- 
necting the  waters  of  the  Great  Lakes  with  those  of  the  Gulf  of  Mexico,  and 
over  which  the  mails  of  the  United  States  should  be  carried.  The  State  of 
Illinois  accepted  the  act,  and  incorporated  the  Illinois  Central  Railroad 
Company,  for  the  purpose  of  constructing  a  railroad  with  a  southern  ter- 
minus described  as  "  a  point  at  the  City  of  Cairo."  The  company  accordingly 
constructed  and  maintained  its  railroad  to  a  station  in  Cairo,  very  near 
the  junction  of  the  Ohio  and  Mississippi  Rivers;  but  afterwards,  in  accord- 
ance with  statutes  of  the  United  States  and  of  the  State  of  Illinois,  connected 
its  railroad  with  a  railroad  bridge  built  across  the  Ohio  River  opposite  a 
part  of  Cairo  farther  from  the  mouth  of  that  river;  and  put  on  a  fast  mail 
train  carrying  interstate  passengers  and  the  United  States  mails  from 
Chicago  to  New  Orleans,  which  ran  through  the  city  of  Cairo,  but  did  not 
go  to  the  station  in  that  city,  and  could  not  have  done  so  without  leaving 
the  through  route  at  a  point  three  and  a  half  miles  from  the  station  and 
coming  back  to  the  same  point ;  but  the  company  made  adequate  accommo- 
dation by  other  trains  for  interstate  passengers  to  and  from  Cairo.  Cairo 
was  a  coimty  seat.  It  was  held  that  a  statute  of  Illinois,  requiring  railroad 
companies  to  stop  their  trains  at  county  seats  long  enough  to  receive  and 
let  off  passengers  with  safety,  and  construed  by  the  Supreme  Court  of  the 
State  to  require  the  fast  mail  train  of  this  company  to  be  run  to  and  stopped 
at  the  station  in  Cairo,  was,  to  that  extent,  an  unconstitutional  hindrance 
and  obstruction  of  interstate  commerce,  and  of  the  passage  of  the  mails  of 
the  United  States,  cited  in  Houston  &  Texas  Central  R.  Co.  v.  Mayes,  201 
U.  S.  321,  329,  50  L.  ed.  772,  26  Sup.  Ct.  491  (case  of  requirement  that  rail- 
road furnish  certain  number  of  cars  on  specified  day  to  transport  merchan- 
dise to  another  State ;  held  not  within  police  power,  and  in  violation  of  com- 
merce clause  of  Federal  Constitution);  Cleveland,  Cincinnati,  Chicago  & 
St.  Louis  Ry.  Co.  v.  Illinois,  177  U.  S.  514,  518,  519,  20  Sup.  Ct.  722,  44  L. 
ed.  868  (considered  in  note  below);  Lake  Shore  &  Michigan  Southern  Ry. 
Co.  V.  Smith,  173  U.  S.  684,  688,  19  Sup.  Ct.  565,  43  L.  ed.  858  [reversing 
Smith  V.  Lake  Shore  &  Michigan  Southern  Ry.  Co.,  114  Mich.  460,  72  N.  W. 
328,  4  Det.  Leg.  N.  662,  8  Am.  &  Eng.  R.  Cas.  (N.  S.)  496],  a  case  of  mileages 
ticket;  constitutional  law  and  State  legislature  regulation  of  railroads; 
Lake  Shore  &  Michigan  Southern  Ry.  Co.  v.  Ohio,  173  U.  S.  285,  303,  306, 
and  in  dissenting  opinion,  321,  43  L.  ed.  702,  19  Sup.  Ct.  465  (considered  in 
note  60,  below),  distinguished  in  Gladson  v.  Minnesota,  166  U.  S.  427,  431 
(considered  in  note  59,  below). 

201 


§  118  JURISDICTION    OR    TOWERS    OF 

county  seats,  was  a  reasonable  exercise  of  the  police  power  of 
the  State,  where  the  statute  did  not  apply  to  railroad  trains 
entering  the  State  from  any  other  State,  or  transcontinental 
trains  of  any  railroad  .^^  A  statute  relating  to  railroad  com- 
panies which  provided  that  a  company  should  cause  three  of 
its  trains  each  way,  if  so  many  were  run  daily,  Sundays  ex- 
cepted, to  stop  at  a  station  containing  over  three  thousand 
inhabitants,  was  valid  in  the  absence  of  legislation  by  Congress 
on  the  subject;^"  and  also  a  State  statute  which  required  all 
regular  passenger  trains  to  stop  at  county  seats  was  invalid, 
when  applied  to  an  interstate  train,  intended  only  for  through 
passengers  from  St.  Louis  to  New  York,  when  it  appeared  that 
the  railroad  company  furnished  sufficient  trains  to  accommo- 
date all  the  local  and  through  business  in  the  State,  and  where 
such  trains  stopped  at  county  seats. ^^     *    *    *    Upon  the 

5«  Gladson  v.  Minnesota,  166  U.  S.  427,  41  L.  ed.  1064,  17  Sup.  Ct.  627, 
holding  also  that  such  a  statute  does  not  take  property  of  the  company 
without  due  process  of  law;  nor  does  it,  as  applied  to  a  train  connecting  with 
a  train  of  the  same  company  running  into  another  State,  and  carrying  some 
interstate  passengers  and  the  United  States  mail,  unconstitutionally  inter- 
fere with  interstate  commerce,  or  with  the  transportation  of  the  mails  of 
the  United  States. 

60  Lake  Shore  &  Michigan  Southern  Ry.  Co.  v.  Ohio,  173  U.  S.  285,  19 
Sup.  Ct.  465,  43  L.  ed.  702,  under  an  Ohio  statute  providing  as  stated  in  the 
text  and  also  that:  "If  a  company,  or  any  agent  or  employe  thereof,  vio- 
late or  cause  or  permit  to  be  violated,  this  provision,  such  company,  agent 
or  employe  shall  be  liable  to  a  forfeiture  of  not  more  than  one  hundred  nor 
less  than  twenty-five  dollars,  to  be  recovered  in  an  action  in  the  name  of 
the  State,  upon  the  complaint  of  any  person,  before  a  justice  of  the  peace 
of  the  county  in  which  the  violation  occurs,  for  the  benefit  of  the  general 
fund  of  the  county;  and  in  all  cases  in  wliich  a  forfeiture  occurs  under  the 
provisions  of  this  section,  the  company  whose  agent  or  employe  caused  or 
permitted  such  violation  shall  be  liable  for  the  amount  of  the  forfeiture,  and 
the  conductor  in  charge  of  such  train  shall  be  held,  prima  facie,  to  have 
caused  the  violation."  This  statute  was  held  not  to  be,  in  the  absence  of 
legislation  by  Congress  on  the  subject,  repugnant  to  the  Constitution  of 
the  United  States,  when  appHed  to  interstate  trains  carrying  interstate 
commerce  through  the  State  of  Ohio  on  the  Lake  Shore  &  Michigan  Southern 
Railway. 

61  Cleveland,  Cincinnati,  Chicago  &  St.  Louis  Ry.  Co.  v.  Illinois,  177 
U.  S.  514,  44  L.  ed.  868,  20  Sup.  Ct.  772;  four  regular  passenger  trains  per 
daj'',  each  way,  were  furnished  by  the  railroad  company,  which  were  suffi- 
cient to  accommodate  all  tlie  local  and  through  business,  and  all  such  trains 

202 


SUPERVISORY   CORPORATION   COMMISSIONS   CONTINUED      §  118 

principles  decided  in  these  cases,  a  State  railroad  commission 
has  the  right,  under  a  State  statute,  so  far  as  railroads  are 
concerned,  to  compel  a  railroad  company  to  stop  its  trains 
under  the  circumstances  already  referred  to,  and  it  may  order 
the  stoppage  of  such  trains  if  the  company  does  not  otherwise 
furnish  proper  and  adequate  accommodation  to  a  particular 
locality,  and  in  such  cases  the  order  may  embrace  a  through 
interstate  train  actually  running  and  compel  it  to  stop  at  a 
locality  named.  In  such  case  in  the  absence  of  congressional 
legislation  covering  the  subject,  there  is  no  illegal  or  improper 
interference  with  the  interstate  commerce  right;  but  if  the  com- 
pany has  furnished  all  such  proper  and  reasonable  accommoda- 
tion to  the  locality  as  fairly  may  be  demanded,  taking  into 
consideration  the  fact,  if  it  be  one,  that  the  locality  is  a  county 
seat,  and  the  amount  and  character  of  the  business  done,  then 
any  interference  with  the  company  (either  directly  by  statute, 
or  by  a  railroad  commission  acting  under  authority  of  a  statute) 
by  causing  its  interstate  trains  to  stop  in  a  particular  locality 
in  the  State,  is  an  improper  and  illegal  interference  with  the 
rights  of  the  railroad  company,  and  a  violation  of  the  com- 
merce clause  of  the  Constitution.  In  reviewing  statutes  of  this 
nature,  and  also  orders  made  by  a  State  railroad  commission, 
it  frequently  becomes  necessary  to  examine  the  facts  upon 
which  they  rest  and  to  determine  from  such  examination 
whether  there  has  been  an  unconstitutional  exercise  of  power 
and  an  illegal  interference  by  the  State  or  its  commission  with 
the  interstate  commerce  of  the  railroad.  Whether  there  has 
or  has  not  been  such  an  interference  is  a  question  of  law  arising 
from  the  facts."  ^^ 

stopped  at  county  seats.  It  was  also  held  that  while  railways  are  bound  to 
provide  primarily  and  adequately  for  the  accommodation  of  those  to  whom 
they  are  directly  tributary,  they  have  the  legal  right,  after  all  these  local 
conditions  have  been  met,  to  adopt  special  provisions  for  througli  traffic, 
anil  legislative  interference  therewith  is  an  infringement  upon  the  clause 
of  the  Constitution  which  requires  that  commerce  shall  be  free  and  unob- 
structed. 

62  Mississippi  Railroad  Commission  v.  Illinois  Central  Rd.  Co.,  203  U.  S. 
335,  343,  344,  27  Sup.  Ct.  90,  per  Mr.  Justice  Peckham;  case  affirms  138 
Fed. 327. 

203 


§  119  JURISDICTION    OR   POWERS   OF 

§  119.  Jurisdiction  of  Railroad  Commissions — Interstate 
Commerce — Delivery  of  Cars— Train  Connections. 

While  a  State  in  the  exercise  of  its  police  power  may  confer 
power  on  an  administrative  agency  to  make  reasonable  regu- 
lations as  to  the  place,  time  and  manner  of  delivery  of  merchan- 
dise moving  in  channels  of  interstate  commerce,  any  regulation 
which  directly  burdens  interstate  commerce  is  a  regulation 
thereof  and  repugnant  to  the  Federal  Constitution  and  so  held 
that  an  order  of  a  North  Carolina  corporation  commission  re- 
quiring a  railway  company  to  deliver  cars  from  another  State 
to  the  consignee  on  a  private  siding  beyond  its  own  right  of 
way  was  a  burden  on  interstate  commerce  and  void,  but  it  was 
a  question  whether  such  an  order  applicable  solely  to  State 
business  would  be  repugnant  to  the  due  process  clause  of  the 
Constitution.^^  A  State  railroad  commission  may  require  a 
railroad  company  to  so  arrange  its  schedule  as  to  furnish  trans- 
portation between  two  points  so  as  to  make  connection  with 
through  trains  where  such  order  is  not  so  arbitrary  or  unreason- 
able as  to  transcend  the  limits  of  regulation  and  is  not  in  effect 
either  a  denial  of  due  process  of  law  or  a  deprivation  of  the 

83  McNeill  V.  Southern  Railway  Co.,  202  U.  S.  543,  30  L.  ed.  1143,  26 
Sup.  Ct.  722. 

Jurisdiction  of  railway  commissioners  as  to  traffic;  complaint  under 
Railway  and  Canal  Traffic  Act,  1888  (51  &  52  Vict.,  chap.  25),  s.  9,  subs, 
(a)  (c);  also  conditions  precedent  to  jurisdiction;  see  Great  Northern  Ry. 
Co.  V.  Great  Central  Ry.  Co.  (1899),  10  Ry.  &  Can.  Traff.  Cas.  266. 

Jurisdiction  of  railway  commission  as  to  "facilities"  for  receiving,  for- 
warding and  delivering  traffic;  to  erect  or  alter  stations  or  other  structural 
works;  case  of  demurrer  to  a  prohibition  issued  at  instance  of  the  railway 
company  to  restrain  the  railway  commissioners  from  proceeding  to  make 
certain  orders  which  they  had  announced  their  intention  to  make  under 
the  English  Act  of  1873  (36  &  37  Vict.,  chap.  48),  the  act  by  which  the 
commissioners  were  appointed  to  carry  into  effect  the  Railway  and  Canal 
Traffic  Act,  1854  (17  &  18  Vict.,  chap.  31),  as  amended  and  enlarged  by 
that  act;  see  (Hastings  Case)  Southeastern  Ry.  Co.  v.  Railway  Comm'rs,  etc. 
(1881),  3  Ry.  &  Can.  Cas.  464. 

Court  of  Railway  and  Canal  Commission:  jurisdiction  of  to  order  railway 
company  to  deliver  traffic  at  a  private  siding  as  part  of  a  "  railway  " ;  under 
Railway  and  Canal  Traffic  Act,  1854  (17  &  18  Vict.,  chap.  31),  ss.  1,  2.  See 
Cowan  &  Sons  v.  North  British  Ry.  Co.  (1901),  11  Ry.  &  Can.  Traff.  Cas. 
96.    Held  by  a  majority  of  seven  judges  of  Court  of  Session. 

204 


SUPERVISORY   CORPORATION   COMMISSIONS   CONTINUED      §  120 

equal  protection  of  the;  laws  or  a  taking  of  propcjrty  without 
compensation.  It  is  also  within  the  power  of  such  commission 
to  compel  a  railroad  company  to  make  reasonable  connections 
with  other  roads  so  as  to  promote  the  convenience  of  the 
traveling  public,  and  an  order  requiring  the  running  of  an 
additional  train  for  that  purpose,  if  otherwise  just  and  reason- 
able, is  not  inherently  unjust  and  unreasonable  because  the 
running  of  such  train  will  impose  some  pecuniary  loss  on  the 
company  .^^ 

§  120.  Jurisdiction  of  Railroad  Commissions— Railroad 
Stations— Other  Facilities— Obligation  of  Contract— Due 
Process  of  Law. 

While  a  State  statute,  providing  for  the  abandonment  of 
railroad  stations,  may  authorize  railroad  commissioners  to 
consent,  or  to  refuse  to  consent,  to  the  abandonment  of  an 
existing  railroad  station,  still  it  confers  upon  them  no  authority 
to  bind  the  State  by  contract  not  to  exercise  its  legislative 
power  as  to  the  establishment  of  such  stations,  so  that  a  sub- 
sequent enactment  of  the  legislature  establishing  a  depot  at  a 
certain  place  does  not  impair  the  obligation  of  any  contract 
between  the  State  and  a  railroad  corporation.*'^  The  general 
laws  of  Minnesota  of  1901  ^^  requiring  the  erection  and  main- 
tenance of  depots  by  railroad  companies  on  the  order  of  the 
railroad  and  warehouse  commission  under  the  conditions  therein 
stated  in  that  act,  does  not  deny  a  railroad  company  the  right 
to  reasonably  manage  or  control  property  or  arbitrarily  take 
its  property  without  its  consent,  or  without  compensation  or 
due  process  of  law,  and  is  not  repugnant  to  the  Constitution  of 
the  United  States.^'     Under  a  Texas  decision  an  action  was 

64  Atlantic  Coast  Line  Rd.  Co.  v.  North  Carolina  Corporation  Commission, 
206  U.  S.  1,  51  L.  ed.  33,  27  Sup.  Ct.  585.  Examine  Honolulu  Rapid  Transit 
&  Land  Co.  v.  Hawaii,  211  U.  S.  282,  29  Sup.  Ct.  55,  53  L.  ed.  186,  rev'g  18 
Hawaii,  553. 

86  Railroad  Company  v.  Hammersley,  104  U.  S.  1,  26  L.  ed.  629. 

68  Chapter  270,  April  13,  1901. 

"7  Minneapolis  &  St.  Louis  Ry.  Co.  v.  Minnesota,  193  U.  S.  53,  48  L.  ed. 
614,  42  Sup.  Ct.  396. 

Whether  railway  commission  has  jurisdiction  to  order  water-closets  to 

205 


§  120  JURISDICTION   OR   POWERS   OF 

begun  by  a  railway  company  to  enjoin  the  railroad  commission 
from  enforcing  an  order  made  by  it  requiring  the  company  to 
construct  at  a  certain  place  a  station  on  its  line  of  railway  in 
said  State  "and  its  terminus,  an  adequate  and  sufficient  pas- 
senger and  freight  depot  building  for  the  proper  accommodation 
as  required  by  law,  of  the  business  of  said  station."  The  trial 
court  gave  judgment  for  the  plantiff,  defendant  appealed  and 
said  judgment  was  sustained.  The  defendant  brought  error, 
there  was  a  reversal  and  the  action  was  dismissed.  It  was  also 
held  that  the  commission  having  merely  followed  the  statute 
in  making  the  order  in  question,  the  validity  of  its  action  must 
depend  upon  the  validity  of  the  statute,  and  not  upon  the 
powers  of  the  commission  outside  of  that  statute .^^  Admission 
of  incompetent  evidence  in  a  proceeding  before  the  State 
corporation  commission  to  require  a  railway  company  to  es- 
tablish and  maintain  a  depot  and  agent  at  one  of  its  stations 
is  not  ground  for  reversal  of  an  order  requiring  such  facilities 
and  service,  where  the  action  of  the  commission  is  supported 
by  other  sufficient  competent  evidence.®^ 

be  provided  at  railway  stations  as  a  reasonable  facility,  see  West  Hann  Corp. 
V.  Great  Eastern  Ry.  Co.  (1895),  9  Ry.  &  Can.  Traff.  Cas.  7. 

6s  Railroad  Commission  v.  Chicago,  Rock  Island  &  Gulf  Ry.  Co.  (Sup.  Ct. 
Tex.,  1909),  117  S.  W.  794,  rev'g  114  S.  W.  192. 

69  Syllabus  in  Missouri,  Kansas  &  Texas  Ry.  Co.  v.  State  (Okla.,  1909), 
103  Pac.  613.  The  court,  per  Hayes,  J.  (at  p.  616),  said:  "  In  determining 
whether  an  additional  facility  shall  be  required  at  a  station,  the  conven- 
ience of  the  public  patronizing  the  station,  the  inconvenience  of  the  railroad 
in  maintaining  it,  and  the  expense  thereof,  are  all  to  be  considered.  In  the 
case  at  bar,  there  is  some  evidence  tending  to  show  a  necessity  for  the  depot 
and  agent  prayed  for  by  the  petition.  On  the  other  hand,  there  is  also  evi- 
dence tending  to  show  that  the  maintenance  of  the  depot  by  appellant  will 
be  attended  with  some  inconvenience  and  extra  expense  to  the  company. 
The  exact  extent  of  the  business  which  petitioner  insists  demands  these 
additional  facilities,  and  the  extent  of  the  additional  expense  which  will  be 
entailed  upon  the  railway  company  to  furnish  them,  do  not  clearly  appear 
from  the  record  upon  which  the  commission  has  acted  and  made  its  order 
requiring  the  station  to  be  established  and  the  agent  maintained;  but  the 
evidence  does  show  that  the  passenger  traffic  to  and  from  this  point  has  been 
sufficient,  that  the  company  has  voluntarily  established  a  schedule  for  the 
stopping  of  six  passenger  trains  daily  to  receive  passengers  and  to  permit 
them  to  depart  from  its  trains  at  that  point.  The  proximity  of  the  other 
stations  and  the  access  they  afford  to  the  public  at  Phillips  upon  appellant's 

206 


SUrP.UVISORY    C<JK1'011ATI0N    COMMISSIONS    CONTINUKD      §   121 

§  121.  Jurisdiction   of  Railroad  Commissions — Railroad 
or  Grade  Crossings — Apportionment  of  Expense  of  J" 

The  Wisconsin  Railroad  Coiiiinission  is  vested  with  powers  to 
determine  the  point  as  well  as  the  manner  of  crossing  of  different 
railroad  tracks,  superseding  in  this  respect  the  power  of  corn- 
line  would  demand  of  us  careful  consideration,  if  the  duty  was  upon  us  in 
the  first  instance  to  determine  whether  this  order  should  be  made;  but  the 
power  and  duty  of  determining  in  the  first  instance  whether  additional  fa- 
cilities or  service  shall  be  required  of  appellant  has  been  by  the  Constitution 
imposed  upon  the  corporation  commission.  In  their  judgment  has  been 
reposed  the  exercise  of  all  discretion  to  the  point  that  their  act  shall  not  be 
unreasonable  and  unjust,  and  he  who  complains  of  their  act  as  falling 
within  this  prohibition  has  upon  him,  under  the  law,  the  burden  of  estab- 
lishing on  appeal  such  complaints  in  some  of  the  manners  previously  pointed 
out.  This  court  cannot  take  judicial  knowledge  of  what  it  will  cost  appellant 
to  maintain  an  agent  at  one  of  its  stations,  and  appellant  has  not  offered 
to  prove  what  that  expense  will  be,  and  from  the  evidence  in  this  case  the 
only  extra  expense  which  this  order  will  incur  upon  appellant  is  the  expense 
of  the  agent  and  the  expenditure  necessary  to  repair  and  remodel  its  build- 
ing so  as  to  make  same  suitable  for  a  depot.  Appellant  now  stops  its  trains 
at  this  station,  and  no  additional  expense  or  inconvenience  will  result  from 
the  order  in  this  respect.  This  is  not  an  order  to  establish  a  station.  The 
railway  company  for  some  time  has  maintained  a  prepay  freight  station  at 
Phillips  and  has  stopped  its  passenger  trains  there.  The  petition  and  order 
is  for  the  establishment  of  additional  facilities  at  a  station  the  company  has 
established  at  which  a  town  of  750  people  has  been  built.  An  order  has 
been  made  by  the  commission  showing  definitely  that  the  receipts  of  the 
company  from  this  station  amount  to  more  than  $300  per  month,  and  that 
there  are  other  receipts  not  included  in  this  estimate  which  should  be  cred- 
ited to  that  station,  and  there  is  further  evidence  tending  to  show  that  the 
establishment  of  the  facilities  asked  for  will  increase  the  receipts  of  the  com- 
pany at  tliat  station.  The  commission  by  its  order  has  found  a  necessity  for 
the  establishment  of  a  depot  and  the  maintenance  of  an  agent  by  appellant. 
For  reversal  of  this  order,  appellant  presents  to  this  court  only  the  facts  that 
Phillips  is  located  two  miles  from  the  station  of  the  company  on  one  side 
and  three  miles  from  the  station  on  the  other,  and  that  the  establishment 
of  a  depot  at  Phillips  will  require  an  expenditure  of  from  $400  to  $500  and 
the  employment  of  an  agent,  the  expense  of  which  is  not  shown.  Upon  this 
state  of  the  record,  we  cannot  say  that  the  company  will  sustain  any  loss  by 
reason  of  this  order,  or  that  the  expen-se  and  inconvenience  it  will  incur  to  the 
company  will  outweigh  and  be  out  of  proportion  to  the  convenience  the 
observance  of  the  same  will  afford  to  the  public  and  the  necessity  therefor. 
We  cannot  therefore  say  that  the  presumption  of  the  reasonableness,  just- 
ness and  correctness  of  the  commission's  action  has  been  overcome  by  appel- 
lant, and  for  that  reason  the  order  of  the  commission  should  not  be  reversed." 

'oSee  §§  24,  25,  herein. 

207 


§  121  JURISDICTION   OR   POWERS   OF 

missioners  appointed  by  the  court.  A  statute,  however,  which 
vests  a  raih'oad  commission  with  power  to  fix  the  proportion  of 
the  expense  of  one  raih-oad  crossing  another,  at  a  grade  cros.sing, 
does  not  constitute  a  delegation  of  legislative  power  or  vest 
the  commission  with  judicial  powerJ^  But  even  though  a  high- 
way crossing  is  dangerous  as  well  as  another  one  passed  over  by 
many  trespassers  only,  still  a  lawful  crossing  cannot  be  abolished 
by  railroad  commissioners  and  a  grade  crossing  substituted  by 
them  at  a  place  about  midway  between  the  others7^  Again,  the 
police  power  of  a  State  does  not  empower  a  railroad  commission 
to  apportion  or  distribute  the  burden  of  expense  of  a  railroad 
crossing  between  a  railroad  company  and  an  older  road  which 
it  seeks  to  cross,  where  the  latter  has  acquired  vested  rights 
under  a  statute  precluding  such  charge  even  though  a  later 
enactment  authorizes  such  commissioners  to  fix  the  proportion 
of  the  expense  of  originally  constructing,  operating  and  main- 
taining such  crossing  and  of  any  protective  appliances  pre- 
scribed by  them  and  of  operating  and  maintaining  the  same  and 
that  the  same  shall  be  paid  by  the  owners  of  such  tracks  respec- 
tively; such  a  construction  of  the  later  statute  so  allowing  the 
commission  to  so  apportion  the  cost  of  crossing  between  the 
roads  without  a  remedy  for  damages  to  the  older  road  would 
be  unconstitutional  and  not  a  reasonable  exercise  of  the  police 
power,  as  it  would  amount  to  the  taking  of  the  older  railroad's 
property  and  transferring  it  to  the  junior  road  without  com- 
pensation 7^  Under  a  New  York  decision  the  Public  Service 
Commission  has  full  power  and  jurisdiction  to  do  whatever  the 

71  State  ex  rel.  Northern  Pac.  Ry.  Co.  v.  Railroad  Commission  (Wis.,  1909), 
121  N.  W.  919  (Laws  Wis.,  1907,  pp.  439-447,  chap.  454),  citing  Union  Bridge 
Co.  V.  United  States,  204  U.  S.  364,  27  Sup.  Ct.  367,  51  L.  ed.  523;  Minneap- 
olis, St.  Paul  &  Sault  Ste.  Marie  Ry.  Co.  v.  Railroad  Commission,  136  Wis. 
146,  116  N.  W.  905,  17  L.  R.  A.  (N.  S.)  821 ;  Madison  v.  Madison  Gas  &  Elec- 
tric Co.,  129  Wis.  249,  108  N.  W.  65,  8  L.  R.  A.  (N.  S.)  529;  Nash  v.  Fries, 
129  Wis.  120,  108  N.  W.  210;  State  ex  rel.  Kellogg  v.  Currens,  111  Wis.  431, 
87  N.  W.  561,  56  L.  R.  A.  252;  DowHng  v.  Lancashire  Ins.  Co.,  92  Wis.  63, 
65  N.  W.  7.38,  31  L.  R.  A.  112. 

72  Fairfield's  Appeal,  57  Conn.  167,  17  Atl.  764. 

73  State  ex  rel.  Northern  Pac.  Ry.  Co.  v.  Railroad  Commission  (Wis.,  1909), 
121  N.  W.  919. 

208 


SUPERVISORY   CORPORATION   COMMISSIONS   CONTINUED      §  122 

former  board  of  railroad  commissioners  might  have  done  under 
the  grade  crossing  provisions  of  the  railroad  law,  even  if  the 
matter  was  pending  and  undetermined  before  the  railroad 
commissioners  when  the  jurisdiction  of  that  board  was  trans- 
ferred to  the  Public  Service  Commission.  The  former  board  of 
railroad  commissioners  had  power  to  reinvestigate,  hear  and 
determine  on  new  testimony  matters  previously  decided  by 
that  board  concerning  grade  crossings,  and  had  the  right  to 
change  its  decision  on  all  matters  involved  whether  of  substance 
or  detail.  The  Public  Service  Commission,  therefore,  possessing 
all  the  powers  of  the  former  board  can  rehear  and  redetermine  on 
new  evidence  the  proper  method  of  constructing  a  grade  cross- 
ing although  an  application  for  the  reconsideration  of  a  prior 
determination  on  the  matter  was  pending  undetermined  when 
the  board  of  railroad  commissioners  was  abolished,  therefore  the 
])ublic  service  commission  is  not  barred  from  reconsidering  a 
prior  determination  of  the  railroad  commissioners  merely  be- 
cause that  decision  had  been  sustained  on  appeal.''''* 

§  122.  Jurisdiction  of  Railroad  Commissions— Telegraph 
Companies — Installing  Telephone. 

The  North  Carolina  Railroad  Commission,  under  the  statute 
of  1891  of  that  State  establishing  such  commission,  was  given 
no  authority  to  direct  a  telegraph  company  to  open,  for  com- 
mercial messages,  offices  at  which  only  its  business  or  that  of 
a  railroad  company  with  which  it  has  intimate  relations,  is 
transacted.  Whether  it  is  the  duty  of  such  company  to  take 
such  messages  may  be  tested  in  a  civil  action  after  the  tender 
of  a  message.^^  And  in  the  same  State  telegraphic  messages 
transmitted  by  a  company  from  and  to  points  in  a  State, 
although  traversing  another  point  in  the  route,  do  not  con- 
stitute interstate  commerce,  and  are  subject  to  the  tariff 
regulation  of  the  commission .^^    And  where  a  railroad  com- 

''*  People  ex  rel.  Town  of  West  Seneca  v.  Public  Service  Commission,  130 
App.  Div.  335. 

^5  Railroad  Commissioners  (State  ex  rel.  Railroad  Commissioners)  v.  West- 
ern Union  Teleg.  Co.,  113  N.  C.  213,  IS  S.  E.  3S<). 

'8  Railroad  Commissioners  (State  c.x  rel.  Railroad  Commissioners)  v.  West- 

14  209 


§  122  JURISDIGTION    OK   I'OWEKS   OF 

mission  has  statutory  authority  to  make  rates  for  the  trans- 
mission of  messages  by  any  telegraph  line  or  lines  within  the 
State,  it  has  the  incidental  power,  subject  to  the  right  of  ap- 
peal, to  ascertain  what  particular  corporation  is  in  the  con- 
trol of  or  operates  any  of  such  lines  in  the  State,  in  order  that 
it  may  exercise  its  authority  to  fix  rates,  as  well  as  to  ascertain 
against  whom  to  proceed  for  a  violation  7^  Again,  the  railroad 
commission  in  that  State  has  no  power  to  prescribe  rules  or 
regulations  for  telegraph  companies  other  than  those  directed 
by  statute  to  make  rates  of  charges  for  the  transportation  of 
messages  by  telegraph  lines  for  doing  business  in  the  State  of 
the  statutory  enactment,  and  for  a  violation  of  the  rules  pre- 
scribed by  the  commission  fixing  rates  for  messages  the  latter 
may  on  service  of  notice  of  the  violation  and  on  hearing  direct 
full  compensation  to  the  injured  party,  enforceable  by  a  civil 
action.'*  With  only  one  railroad  station  in  a  town  having  one 
telephone  exchange,  and  an  inland  town  about  six  miles  distant 
with  about  three  hundred  population  having  a  telephone  ex- 
change, said  town  receiving  all  of  its  freight  by  the  way  of 
said  station  and  a  telephone  installed  and  maintained  in  said 
station,  connected  with  both  exchanges,  it  appearing  that  the 
installing  and  maintaining  of  such  telephone  would  be  to  the 
convenience  of  the  patrons  of  said  railroad  station,  the  order 
of  the  corporation  commission  requiring  a  telephone  to  be 
installed  and  maintained  in  said  station  will  not  be  disturbed 
by  the  court.  Prima  facie  just,  reasonable,  and  correct,''^  is  a 
presumption  arising  upon  the  finding  of  the  corporation  com- 
mission that  the  order  based  upon  such  facts  is  presumed  on 
appeal  by  the  court  to  be  just,  reasonable,  and  correct,  subject 
to  be  overcome  or  rebutted  by  the  facts  in  the  record,  as 
weighed  and  found  by  the  court  in  reviewing  the  same.*" 

ern  Union  Teleg.  Co.,  113  N.  C.  213,  18  S.  E.  389;  compare  Leavell  v.  West- 
ern Union  Teleg.  Co.,  116  N.  C.  211,  21  S.  E.  391. 

"  Railroad  Commissioners  (State  ex  rel.  Railroad  Commissioners)  v. 
Western  Union  Teleg.  Co.,  113  N.  C.  213,  18  S.  E.  389. 

7»  Mayo  V.  Western  Union  Teleg.  Co.,  112  N.  C.  343,  16  S.  E.  1006. 

79  Section  22,  Art.  9,  §  235,  Burns's  ed.;  Snyder's  ed.,  p.  259,  of  the  Consti- 
tution. 

80  Atchison,  Topeka  &  Santa  Fe  Ry.  Co.  y.  State  (Okla.,  1909),  100  Pac.  11. 

210 


CORPORATION   SUPERVISUKY   COMMISSIONS,    ETC. 


CHAPTER  X 

JURISDICTION   OF    COURTS    OVER    COIU'ORATION    SUPERVISORY 
COMMISSIONS,    ETC. 


133. 
134. 


135. 


135a 


123.  Jurisdicfion     of     Boards     of    §   132. 

E(ivializat.ion  —  Conclusive- 
ness of  Decisions  of — Re- 
view by  Courts. 

124.  Jurisdiction    of   Courts — Cer- 

tiorari to  Review  Assess- 
ment —  Special  Franchise 
Tax — Requirements  as  to 
Return  by  Tax  Commis- 
sioners. 

125.  Board    of    Harbor    Commis- 

sioners— J urisdiction  of 
Courts. 

126.  Resolution    of    City    Council 

and  Direction  to  City  So- 
licitor to  Enforce  Same 
Against  Street  Railway — 
— Obligation  of  Contract — 
Jurisdiction  of  Federal  Cir- 
cuit Court — Injunction. 

127.  Condemnation  Proceedings — 

Commissioners  —  State 
Crossing  Board — Jurisdic- 
tion of  Courts — Waiver. 

128.  Jurisdiction    of    Courts — In- 

surance— State  Auditor — 
Superintendent  of  Insur- 
ance. 

129.  Jurisdiction     of     Officers     of 

Land  Department — Con- 
trol and  Supervision  of  by 
Courts  —  Mandamus  —  In- 
junction. 

130.  Same     Subject — Railroads- 

Right  of  Way. 

131.  Jurisdiction  of  Courts  in  Re- 

spect to  Interstate  Com- 
merce Commission — Gener- 
ally. 


136. 


137. 


138. 


Jurisdiction  of  Federal  Courts 
in  Respect  to  Interstate 
Commerce  Commission  — 
Rates. 

Same  Subject. 

Same  Subject — Injunction — 
Where  Redress  Must  First 
Be  Sought. 

Same  Subject — Compensation 
of  Carrier — Services  Ren- 
dered at  Shipper's  Request 
— Practice  and  Procedure 
— Remanding  Case. 

.Jurisdiction  of  Federal 
Courts  in  Respect  to  Inter- 
state Commerce  Commis- 
sion —  Regulation  of  Car- 
riers as  to  Cars  —  Where 
Redress  Must  First  be 
Sought. 

Jurisdiction  of  Federal  Courts 
in  Respect  to  Interstate 
Commerce  Commission — 
Shipper's  Indebtedness  for 
Demurrage  —  Refusal  of 
Carriers  to  Receive  Goods. 

Use  of  Process  of  Federal 
Circuit  Court  in  Aid  of  In- 
quiries Before  Interstate 
Commerce  Commission- 
Testimony —  Production  of 
Books,  etc. — Fine  and  Im- 
prisonment —  Contempt  — 
Power  of  Commission. 

Judicial  Functions  of  Non- 
judicial Bodies — Power  to 
Compel  Corporations  to 
Produce  Books,  etc. — No- 
tice— Courts — Due   Process 

211 


§123 


JURISDICTION    OF   COURTS    OVER 


and  Equal  Protection — 
Contempt  —  Compensation 
to  Witness. 
Jurisdiction  of  Courts  in  Re- 
spect to  Railroad  Commis- 
sions— Generally. 

140.  Same  Subject. 

141.  Same  Subject. 
Jurisdiction  of  Courts — Rail- 
road Commissioners — Pub- 
lic Service  Commission — 
Certificate  of  Public  Con- 
venience and  Necessity. 

Jurisdiction  of  Courts  Over 
Rate  Regulations — Gener- 
ally. 

Same  Subject. 

Legislative  and  Judicial  Func- 
tions as  to  Rate  Regulation 
— Distinctions. 

146.  Equity    Jurisdiction  —  Rail- 

road, etc.,  Rates — Obliga- 
tion of  Contracts — Injunc- 
tion— Discrimination . 

147.  Extent   of  Judicial   Interfer- 

ence as  to  Rate  Regulations. 


139. 


142. 


143. 


144. 
145. 


§    148. 


149. 


150. 
151. 

152. 


153. 


154. 


155. 


Jurisdiction  of  Courts  Before 
Rate  Legislation  Goes  Into 
Effect. 

Jurisdiction  of  Courts  in  Re- 
spect to  Railroad  Commis- 
sions— Rates. 

Same  Subject. 

Same  Subject — Where  Re- 
sort Must  First  Be  Had. 

Same  Subject  —  Appeal  to 
State  Supreme  Court  Be- 
fore Suing  in  Federal  Cir- 
cuit Court. 

Jurisdiction  of  Courts  in  Re- 
spect to  Railroad  Commis- 
sions— Rates — When  Con- 
stitutional Question  Not 
Decided. 

Public  Service  Commission — 
Right  to  Appeal — Certio- 
rari— Nature  of  Powers. 

Jurisdiction  of  Courts — Suit 
Against  Railroad  Commis- 
sioners —  Whether  Suit 
Against  State. 


§  123.  Jurisdiction  of  Boards  of  Equalization— Conclu- 
siveness of  Decisions  Of — Review  by  Courts. 

A  State  board  of  equalization  is  one  of  the  instrumentalities 
provided  by  the  State  for  the  purpose  of  raising  the  public 
revenue  by  way  of  taxation.  In  regard  to  corporations  of  a 
certain  class  it  is  the  duty  of  that  board  to  make  an  original 
assessment  upon  them.  Where  no  appeal  is  provided  for  from 
the  decision  of  the  board,  such  decision  is  conclusive,  except 
as  proceedings  for  relief  may  thereafter  be  taken  in  the  courts. 
But  the  action  of  the  board  is  reviewable  in  the  Federal  Courts 
at  the  instance  of  one  claiming  to  be  thereby  deprived  of  his 
property  without  due  process  of  law  and  denied  the  equal 
protection  of  the  law ;  the  provisions  of  the  Fourteenth  Amend- 
ment are  not  confined  to  the  action  of  the  State  through  its 
legislative,  executive  or  judicial  authority,  but  relate  to  all  the 
instrumentalities  through  which  the  State  acts.  And  action  of 
212 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.        §  123 

such  a  board  which  results  in  illegal  discrimination  is  held  not 
to  be  action  forbidden  by  the  State  legislature  and  therefore 
beyond  review  of  the  Federal  Courts  under  the  Fourteenth 
Amendment.^  Again,  proceedings  before  a  board  of  equaliza- 
tion are  ^wasi-judicial,  and  if  an  order  made  by  it  is  within  its 
jurisdiction  it  is  not  void  and  cannot  be  resisted  in  an  action  at 
law;  nor  can  overvaluation  be  made  a  ground  of  defense  at  law. 
The  action  of  the  tax  officers  being  in  the  nature  of  a  judgment 
must  be  yielded  to  until  set  aside.  And  this  can  only  be  done 
in  a  direct  proceeding.  So  where  the  highest  court  of  a  State 
has  decided  that  the  board  of  equalization  has  acted  according 
to  the  methods  prescribed  and  authorized  by  the  laws  of  the 
State,  and  that  an  order  made  by  it  is  legal  under  the  State 
Constitution  and  statutes,  the  decision  constitutes  an  interpre- 
tation of  the  law  of  the  State  and  is  not  open  to  dispute  in  the 
Federal  Supreme  Court  .^ 

1  Raymond  v.  Chicago  Traction  Co.,  207  U.  S.  20,  52  L.  ed.  7,  28  Sup.  Ct. 
7,  aff'g  114  Fed.  557,  distinguishing  on  the  last  point,  Barney  v.  City  of  New 
York,  193  N.  Y.  430;  see  Powers  v.  Detroit,  Grand  Haven  &  M.  Ry.  Co.,  201 
U.  S.  543,  26  Sup.  Ct.  556,  50  L.  ed.  860,  af?'g  138  Fed.  264;  Savannah,  T.  & 
I.  of  H.  Ry.  Co.  V.  Savannah,  198  U.  S.  392,  49  L.  ed.  1097,  25  Sup.  Ct. 
690. 

As  to  equity  jurisdiction  and  power  of  courts;  injunction  against  collection 
of  taxes;  and  railroad  taxation,  see  State  Railroad  Tax  Cases,  92  U.  S.  575, 
23  L.  ed.  663,  cited  as  to  remedy  in  Norwood  v.  Baker,  172  U.  S.  269,  291, 
300,  19  Sup.  Ct.  187,  43  L.  ed.  443;  Pittsburg,  C,  C.  &  St.  Louis  Ry.  Co. 
V.  Board  of  Public  Works,  172  U.  S.  32,  37,  19  Sup.  Ct.  90,  43  L.  ed.  354; 
Northern  Pacific  Rd.  Co.  v.  Clark,  153  U.  S.  252,  272,  38  L.  ed.  706,  14  Sup. 
Ct.  809;  Albuquerque  Bank  v.  Perea,  147  U.  S.  87,  90,  37  L.  ed.  91,  13  Sup. 
Ct.  000;  Milwaukee  v.  Koeffler,  116  U.  S.  219,  224,  29  L.  ed.  612,  6  Sup.  Ct. 
372;  Thompson  v.  Allen  County,  115  U.  S.  550,  557,  564,  29  L.  ed.  472,  6  Sup. 
Ct.  140;  Virginia  Coupon  Cases,  114  U.  S.  270,  315  (there  were  eight  of  these 
cases,  114  U.  S.  at  pp.  270,  307,  309,  311,  317,  323,  325,  3.38,  29  L.  ed.  185, 
199,  198,  200,  202,  205,  5  Sup.  Ct.  903,  923,  924,  925,  928,  932,  962) ;  Union 
Pacific  Ry.  Co.  v.  Cheyenne,  113  U.  S.  516,  526,  29  L.  ed.  517,  6  Sup.  Ct.  475; 
Snyder  v.  Marks,  109  U.  S.  189,  193,  3  Sup.  Ct.  157,  27  L.  ed.  901;  National 
Bank  v.  Kimball,  103  U.  S.  732,  733,  26  L.  ed.  469;  Whitehead  v.  Farmers' 
Loan  &  Trust  Co.,  98  Fed.  12;  Linehan  Ry.  Transfer  Co.  v.  Pendergrass,  70 
Fed.  2;  Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  Board  of  Comm'rs,  67  Fed. 
413;  Robinson  v.  City  of  Wilmington,  65  Fed.  858. 

2  Western  Union  Tel.  Co.  v.  Missouri  ex  rel.  Gottlieb,  190  U.  S.  412,  23  Sup. 
Ct.  730,  47  L.  ed.  1116. 

213 


§§  124,  125  JURISDICTION   OF   COURTS   OVER 

§  124.  Jurisdiction  of  Courts — Certiorari  to  Review  As- 
sessment— Special  Franchise  Tax — Requirements  as  to 
Return  by  Tax  Commissioners. 

It  is  held  in  a  late  case  in  New  York  that  on  certiorari  to 
review  the  assessment  of  a  special  franchise  tax,  the  tax  com- 
missioners should  be  required  to  specify  in  their  return  the 
records  and  papers  upon  which  the  determination  was  made, 
the  evidence  presented  before  the  board  in  open  session,  and  to 
state  the  separate  valuations  placed  upon  real  property  in  the 
street  and  upon  the  use  of  the  street,  if  separate  valuations 
were  made,  together  with  the  material  facts  which  enter  into 
their  determination.  Although  the  board  of  tax  commissioners 
in  making  such  assessment  may  obtain  information  apart  from 
the  record  and  may  have  its  own  experts  make  an  examination 
of  facts  bearing  upon  the  value  of  the  franchise,  it  should  not 
be  required  to  make  a  return  of  specific  information  acquired 
apart  from  the  open  session  or  through  agents  and  experts. 
On  certiorari  under  the  tax  law  the  court  has  power  to  take 
further  evidence,  or  direct  such  evidence  to  be  taken  before 
a  referee,  and  hence  there  is  not  the  same  necessity  for  a  full 
and  complete  return  that  exists  in  the  case  of  the  ordinary  writ.^ 

§  125.  Board  of  Harbor  Commissioners — ^Jurisdiction  of 
Courts. 

Under  a  California  decision  the  courts  will  refuse  to  interfere 
with  the  discretion  of  harbor  commissioners,  vested  in  them 
under  the  political  code  of  that  State  in  the  matter  of  regulating 
the  position  of  vessels,  even  if  such  discretion  is  erroneously 
exercised  and  may  operate  as  a  hardship  on  individuals,  pro- 
vided, however,  there  is  an  honest  exercise  of  judgment;  and 
if  a  fraudulent  exercise  of  discretion  is  claimed  in  changing  the 
wharf  of  a  vessel  the  court  w^ill  not  interfere  unless  the  fraud 
is  clearly  established;  the  proof  must  be  of  something  greater 
than  suspicion  alone.'* 

3  People  ex  rel.  New  York,  Ontario  &  Western  Ry.  Co.  v.  Tax  Commis- 
sioners, 132  App.  Div.  604. 

4  Union  Transportation  Co.  v.  Bassett,  118  Cal.  604,  50  Pac.  754,  rev'g  in 
Banc,  46  Pac.  907. 

214 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.       §  126 

§  126.  Resolution  of  City  Council  and  Direction  to  City 
Solicitor  to  Enforce  Same  Against  Street  Railway — Obliga- 
tion of  Contract — Jurisdiction  of  Federal  Circuit  Court  — 
Injunction. 

A  resolution  of  a  municipal  council  directing  a  street  railway 
company  to  remove  and  replace  tracks  and  wires,  and,  in  case 
of  failure  to  comply,  instructing  the  city  solicitor  to  take  such 
action  as  he  deems  advisable  to  enforce  the  resolution,  amounts 
only  to  direction  to  bring  a  suit;  and,  even  if  contract  rights 
should  be  violated  if  the  resolution  were  enforced,  the  resolution 
does  not  of  itself  amount  to  an  ordinance  or  law  impairing  the 
obligation  of  contracts,  and  the  Federal  Circuit  Court  has  no 
jurisdiction  of  a  suit  to  enjoin  its  enforcement.  Mr.  Jus- 
tice Holmes  said:  "We  are  of  opinion  that  this  is  not  a  law 
impairing  the  rights  alleged  by  the  appellee,  and,  therefore, 
that  the  jurisdiction  of  the  Circuit  Court  cannot  be  maintained. 
Leaving  on  one  side  all  questions  as  to  what  can  be  done  by 
resolution  as  distinguished  from  ordinance  under  Iowa  laws,  we 
read  this  resolution  as  simply  a  denial  of  the  appellee's  claim 
and  a  direction  to  the  city  solicitor  to  resort  to  the  courts  if 
the  appellee  shall  not  accept  the  city's  views.  The  resolution 
begins  with  a  recital  that  questions  as  to  the  railway  company's 
rights  have  been  raised,  and  ends  with  a  direction  to  the  city 
solicitor  to  take  action  to  enforce  the  city's  position.  The  only 
action  to  be  expected  from  the  city  solicitor  is  a  suit  in  court. 
We  cannot  take  it  to  have  been  within  the  meaning  of  the  di- 
rection to  him  that  he  should  take  a  posse  and  begin  to  pull  up 
the  tracks.  The  order  addressed  to  the  company  to  remove 
their  tracks  was  simply  to  put  them  in  the  position  of  dis- 
obedience, as  ground  for  a  suit,  if  the  city  was  right."  ^ 

5  Des  Moines,  City  of,  v.  Des  Moines  City  Ry.  Co.,  214  U.  S.  179,  53  L.  ed. 
958,  29  Sup.  Ct.  553.  This  was  a  bill  brought  in  the  Circuit  Court  by  an 
Iowa  corporation  against  a  city  in  Iowa.  The  ground  of  jurisdiction  was 
that  a  resolution  of  the  city  council  impaired  the  obligation  of  contract  and 
also  if  carried  out  would  take  the  property  of  the  corporation  without  due 
process  of  law  contrary  to  the  Fourteenth  Amendment.  The  Circuit  Court 
granted  an  injunction  against  the  enforcement  of  the  resolution,  and  the  de- 
fendant appealed  to  the  Federal  Supreme  Court.    The  plaintiff,  the  appellee, 

215 


§127  JURISDICTION   OF   COURTS   OVER 

§  127.  Condemnation    Proceedings  —  Commissioners  — 
State  Crossing  Board— Jurisdiction  of  Courts— Waiver. 

The  United  States  cannot  interfere  with  the  exercise  by  the 
State  of  her  right  of  eminent  domain  in  taking  for  public  use 
land,  within  her  limits,  which  is  private  property.  But  when 
the  inquiry  whether  the  conditions  prescribed  by  her  statutes 
for  its  exercise  have  been  observed  takes  the  form  of  a  judicial 
proceeding  between  the  owner  of  lands  and  a  corporation 
seeking  to  condemn  and  appropriate  them,  the  controversy 
is  subject  to  the  ordinary  incidents  of  a  civil  suit,  and  its 
determination  does  not  derogate  from  the  sovereignty  of  the 
State.  So  a  controversy  of  this  kind  in  a  State,  when  carried, 
under  a  law  thereof,  from  the  commissioners  of  appraisement 
to  the  State  Court,  taking  there  the  form  of  a  suit  at  law,  may, 
if  it  is  between  citizens  of  different  States,  be  removed  to  a 
Federal  Court.^  In  condemnation  proceedings  to  acquire  an 
existing  system  of  water  supply  in  a  city,  which  system  is  the 
property  of  private  individuals  operated  under  a  contract  with 
the  city  the  assessment  of  damages  may  be  made  by  com- 
missioners where  the  statutes  so  provide,  and  there  is  no  denial 
of  due  process  of  law  in  making  their  findings  final  as  to  the 
facts,  leaving  open  to  the  courts  the  inquiry  whether  there  was 
any  erroneous  basis  adopted  by  the  commissioners  in  their 
appraisal,  or  other  errors  in  their  proceedings,  and  this  applies 
where  there  is  nothing  in  the  statute  under  which  a  water 
supply  company  was  organized,  nor  in  any  contract  with  the 
town  in  question  for  a  water  supply,  nor  in  the  annexation  to 
a  municipality  which  gave  to  such  company  rights  exclusive 
beyond  such  legislative  action.^  Under  a  Michigan  decision  the 
State  crossing  board  is  given  the  requisite  jurisdiction  as  to 

set  up,  under  a  certain  ordinance,  a  right  unlimited  as  to  time  to  construct, 
maintain  and  operate  an  electric  street  railway  in  and  over  the  streets,  alleys 
and  bridges  of  Des  Moines. 

8  Boom  Co.  V.  Patterson,  98  U.  S.  403,  25  L.  ed.  206.  See  as  to  last  point 
Madisonville  Traction  Co.  v.  Saint  Bernard  Min.  Co.,  196  U.  S.  239,  25  Sup. 
Ct.  251,  49  L.  ed.  262. 

7  Long  Island  Water  Sppply  Co.  v.  Brooklyn,  166  U.  S.  685,  41  L.  ed.  1154, 
17  Sup.  Ct.  677. 

216 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.    §§  128,  129 

making  orders  in  condemnation  proceedings  to  condemn  land 
for  terminal  branches  of  a  railroad  at  the  time  of  its  being 
organized,  where  a  map  of  the  road  was  then  filed  including  the 
terminal  branches,  and  the  certified  approval  of  the  board  of 
directors  was  given  thereto.*  An  objection,  taken  by  a  property 
owner  in  a  condemnation  proceeding  for  a  part  of  his  property, 
that,  under  the  statute,  his  entire  property  must  be  condemned, 
is  waived  and  cannot  be  maintained  on  appeal,  if  he  accepts  the 
award  made  by  the  commissioners  in  the  condemnation  pro- 
ceeding and  paid  in  by  the  condemnors  for  the  parcel  actually 
condemned.  After  an  award  has  been  made  and  accepted  the 
proceeding  is  functus  officio.^ 

§  128.  Jurisdiction  of  Courts — Insurance — State  Auditor 
— Superintendent  of  Insurance. 

Where  trust  funds  for  the  benefit  of  policy  holders  are  in  the 
possession  of  the  State  auditor,  through  securities,  which  have 
been  deposited  with  the  insurance  commissioner  by  an  insurance 
company  as  required  by  law,  being  illegally  surrendered  and 
transferred,  the  court  will  take  jurisdiction  of  such  auditor  as 
to  the  control  and  disposition  of  said  trust  fund.^"  A  super- 
intendent of  insurance,  who  is  without  authority  to  revoke  a 
license  to  do  business  in  the  State  of  an  insurance  company 
organized  in  another  State,  may  be  enjoined  from  so  revoking 
by  the  Federal  Court .^^ 

§  129.  Jurisdiction  of  Officers  of  Land  Department — Con- 
trol and  Supervision  of  by  Courts — Mandamus — Injunction. 

Congress  has  constituted  the  Land  Department,  under  the 

8  Toledo,  S.  &  M.  R.  Co.  v.  East  Saginaw  &  St.  C.  R.  Co.,  72  Mich.  206,  40 
N.  W.  436. 

9  Winslow  V.  Baltimore  &  Ohio  Rd.  Co.,  208  U.  S.  59,  52  L.  ed.  388,  28  Sup. 
Ct.  190,  aff'g  28  App.  D.  C.  126. 

i«  Hayne  v.  Metropolitan  Trust  Co.,  67  Minn.  245,  69  N.  W.  916. 

When  state  auditor  cannot  be  compelled  by  the  Federal  Court  to  issue  to  a 
foreign  insurance  company  a  certificate  authorizing  it  to  do  business  in  the 
State,  see  Manchester  Fire  Ins.  Co.  v.  Herriott  (U.  S.  C.  C),  91  Fed.  711. 

11  Metropolitan  Life  Ins.  Co.  v.  McNall  (U.  S.  C.  C),  81  Fed.  888,  26  Ins. 
L.  J.  641,  14  Nat.  Corp.  Rep.  675. 

217 


§  129  JURISDICTION   OF  COURTS   OVER 

supervision  and  control  of  the  Secretary  of  the  Interior,  a 
special  tribunal  with  judicial  functions  to  which  is  confided  the 
execution  of  the  laws  which  regulate  the  purchase,  selling  and 
care  and  disposition  of  the  public  lands.  The  Secretary  having 
jurisdiction  to  decide  at  all,  has  necessarily  jurisdiction  to 
decide  as  he  thinks  the  law  is,  and  it  is  his  duty  so  to  do,  and 
the  courts  have  no  jurisdiction  under  those  circumstances  to 
review  his  determination  by  mandamus  or  injunction;  neither 
of  these  writs  will  lie  against  an  officer  of  the  Land  Department 
to  control  him  in  discharging  an  official  duty  which  requires 
the  exercise  of  his  judgment  and  discretion.  The  courts  have 
no  general  supervisory  power  over  these  officers  by  which  they 
can  control  their  decisions  upon  questions  within  their  juris- 
diction.^^ So  where  the  decision  of  questions  of  fact  is  commit- 
ted by  Congress  to  the  judgment  and  discretion  of  the  head  of 
a  department,  his  decision  thereon  is  conclusive;  and  even  upon 
mixed  questions  of  law  and  fact,  or  of  law  alone,  his  action  will 
carry  with  it  a  strong  presumption  of  its  correctness,  and  the 
courts  will  not  ordinarily  review  it,  although  they  have  the 
power,  and  will  occasionally  exercise  the  right  of  so  doing.^^ 
The  rule  is  that  in  the  administration  of  the  public  lands  of  the 
United  States  the  decisions  of  the  Land  Department  upon 
questions  of  fact  are  conclusive  and  only  questions  of  law  are 

12  Riverside  Oil  Co.  v.  Hitchcock,  190  U.  S.  316,  47  L.  ed.  1074,  23  Sup.  Ct. 
698.  See  also  Love  v.  Flahive,  205  U.  S.  195,  51  L.  ed.  768,  27  Sup.  Ct.  488, 
aff'g  83  Pac.  882;  Estes  v.  Timmons,  199  U.  S.  391,  50  L.  ed.  241,  26  Sup.  Ct. 
85;  McMichael  v.  Murphy,  197  U.  S.  304,  25  Sup.  Ct.  460,  49  L.  ed.  766; 
Small  V.  Rakestraw,  196  U.  S.  403,  25  Sup.  Ct.  285;  49  L.  ed.  527;  Gertgens 
V.  O'Connor,  191  U.  S.  237,  24  Sup.  Ct.  94;  48  L.  ed.  163;  Cosmos  Exploration 
Co.  V.  Gray  Eagle  Oil  Co.,  190  U.  S.  301,  47  L.  ed.  1064,  23  Sup.  Ct.  692; 
Potter  V.  Hall,  189  U.  S.  292,  23  Sup.  Ct.  545,  47  L.  ed.  417;  De  Cambra  v. 
Rogers,  189  U.  S.  119,  23  Sup.  Ct.  519,  47  L.  ed.  734;  New  Orleans  v.  Paine, 
147  U.  S.  261,  37  L.  ed.  162,  13  Sup.  Ct.  303  (cited  in  Michigan  Land  &  Lum- 
ber Co.  V.  Rust,  168  IT.  S.  589,  594,  42  L.  ed.  591,  18  Sup.  Ct.  208;  Astiazarin 
V.  Santa  Rita  Min.  Co.,  148  U.  S.  80,  83,  27  L.  ed.  376,  13  Sup.  Ct.  457). 

13  Bates  &  Guild  Co.  v.  Pa>Tie,  194  U.  S.  106,  24  Sup.  Ct.  559,  48  L.  ed.  894, 
citing  (at  p.  109)  Riverside  Oil  Co.  v.  Hitchcock,  cited  in  last  preceding  note. 
See  Whitcomb  v.  White,  214  U.  S.  15,  53  L.  ed.  889;  29  Sup.  Ct.  599,  aff'g  13 
Idaho,  490;  Enterprise  Sav.  Assoc,  v.  Zumstein  (U.  S.  C.  C.  A.),  67  Fed.  1000, 
aff'g  64  Fed.  837,  as  to  same  principle. 

218 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.       §  129 

reviewable  in  the  courts.  In  the  absence  of  some  specific 
provision  to  the  contrary  in  respect  to  any  particular  grant  of 
public  land,  its  administration  falls  wholly  and  absolutely 
within  the  jurisdiction  of  the  Commissioner  of  the  General 
Land  Office,  under  the  supervision  and  direction  of  the  Secre- 
tary of  the  Interior.^"*  But  it  is  held  that  judicial  power  is  not 
unconstitutionally  conferred  on  a  State  board  of  land  com- 

14  Catholic  Bishop  of  Nesqually  v.  Gibbon,  158  U.  S.  155,  15  Sup.  Ct.  779, 
39  L.  ed.  931,  citing  Barden  v.  Northern  Pacific  Rd.,  154  U.  S.  288,  327,  38 
L.  ed.  992,  14  Sup.  Ct.  1030;  United  States  v.  California  &  Oregon  Land  Co., 
148  U.  S.  31,  37  L.  ed.  354,  13  Sup.  Ct.  458;  Knight  v.  United  States  Land 
Assoc,  142  U.  S.  161,  177,  12  Sup.  Ct.  258,  35  L.  ed.  974;  Cragin  v.  Powell, 
128  U.  S.  691,  32  L.  ed.  566,  9  Sup.  Ct.  203;  Wright  v.  Roseberry,  121  U.  S. 
488,  7  Sup.  Ct.  985,  30  L.  ed.  1039;  Lee  v.  Johnson,  116  U.  S.  48,  29  L.  ed. 
570,  6  Sup.  Ct.  249;  United  States  v.  Minor,  114  U.  S.  233,  5  Sup.  Ct.  836, 
29  L.  ed.  110;  Rector  v.  Gibbon,  111  U.  S.  276,  28  L.  ed.  427,  4  Sup.  Ct.  605; 
Baldwin  v.  Stark,  107  U.  S.  463,  27  L.  ed.  526,  2  Sup.  Ct.  473;  Missionary 
Society  v.  Dallas,  107  U.  S.  336,  2  Sup.  Ct.  672,  27  L.  ed.  545;  Steel  v.  Smelt- 
ing Co.,  106  U.  S.  447,  1  Sup.  Ct.  389,  27  L.  ed.  226;  Smelting  Co.  v.  Kemp, 
104  U.  S.  636,  26  L.  ed.  875;  Quimby  v.  Conlan,  104  U.  S.  420,  26  L.  ed.  800; 
Vance  v.  Burbank,  101  U.  S.  514,  25  L.  ed.  929;  Marquez  v.  Frisbie,  101  U.  S. 
473,  25  L.  ed.  800;  Moore  v.  Robbins,  96  U.  S.  530,  24  L.  ed.  848;  Shepley  v. 
Cowan,  91  U.  S.  330,  23  L.  ed.  424;  Warren  v.  Van  Brunt,  19  Wall.  (86  U.  S.) 
646,  22  L.  ed.  219;  Lamb  v.  Davenport,  18  Wall.  (85  U.  S.)  307,  314,  21  L. 
ed.  759;  Johnson  v.  Towsley,  13  Wall.  (80  U.  S.)  72,  20  L.  ed.  485.  The  prin- 
cipal case  is  cited  in  Cosmos  Exploration  Co.  v.  Gray  Eagle  Oil  Co.,  190  U.  S. 
301,  309,  47  L.  ed.  1064,  23  Sup.  Ct.  692  (to  the  point  of  jurisdiction  of  the 
Land  Department  imless  taken  away  by  some  affirmative  provision  of  law. 
The  case  also  decides  that  the  court  will  not  determine  title  while  the  ques- 
tions are  still  before  the  Land  Department  and  there  undecided.  See  also  to 
this  last  point  Kirwan  v.  Murphy,  189  U.  S.  35,  47  L.  ed.  698,  23  Sup.  Ct.  599) 
Johanson  v.  Washington,  190  U.  S.  179,  185  (to  the  point  that  the  general 
supervision  of  the  affairs  of  the  Land  Department  is  now  vested  in  the  Secre- 
tary of  the  Interior,  and  that  unless  Congress  selects  some  other  officer  to  act 
in  respect  to  such  matters  it  will  be  assumed  that  he  is  the  officer  to  represent 
the  Government);  United  States  v.  Beebe,  117  Fed.  670,  679;  Northern 
Pacific  Rd.  Co.  v.  M'Cormick,  94  Fed.  932,  941;  Diller  v.  Hawley,  81  Fed. 
651,  657;  Johnston  v.  Morris,  72  Fed.  890,  897;  American  Bell  Telephone  Co. 
v.  United  States,  68  Fed.  542,  569. 

Jurisdiction  in  its  common  law  and  technical  meaning  is  declared  not  to  be 
a  term  applicable  to  the  Commissioner  of  the  Land  Office  to  issue  grants  or 
patents  to  land.  The  case,  however,  holds  that  the  authority  of  the  Commis- 
sioner of  Patents  to  grant  a  patent  is  not  of  the  nature  of  jurisdiction  in  the 
common-law  acceptance.  Wilder  v.  McCormick,  2  Blatch.  (U.  S.  C.  C.)  31, 
34  Fed.  Cas.,  No.  1760,  p.  1221. 

219 


§  130  JURISDICTION   OF   COURTS   OVER 

missioncrs.^^  Still  the  decisions  of  State  land  officers  are  also 
decided  not  to  be  conclusive,  but  may  be  inquired  into  and 
declared  void  by  the  courts .^^ 

§  130.  Same  Subject— Railroads— Right  of  Way. 

A  decision  of  the  Secretary  of  the  Interior  in  the  exercise  of 
the  powers  conferred  upon  him  by  the  act  of  1875  *^  that  a 
designated  railroad  company  is  entitled  to  a  right  of  way  over 
public  land,  cannot  be  revoked  by  his  successor  in  office,  and 
whether  a  railroad  company,  applying  for  such  a  grant,  is  a 
company  which  the  statute  authorizes  to  receive  a  grant  of  a 
right  of  way  is  a  ^wasi-judicial  question,  which,  when  once 
determined  by  the  Secretary,  is  finally  determined  so  far  as  the 
executive  is  concerned.^*  It  is  further  decided  that  it  is  not 
within  the  province  of  the  courts  to  interfere  with  the  adminis- 
tration of  the  Land  Department,  and  until  the  land  is  patented 
inquiry  as  to  equitable  rights  comes  within  the  cognizance  of 
the  Department  and  the  courts  will  not  anticipate  its  action.^^ 

15  American  Sulphur  &  Mining  Co.  v.  Brennan,  20  Colo.  App.  439,  79  Pac. 
750. 

When  jurisdiction  and  control  of  land  may  be  delegated  to  county  through 
board  of  supervisors  under  general  supervision  of  land  commissioners,  see 
Jefferson  Davis  County  v.  James-Sumrall  Lumber  Co.  (Miss.,  1909),  49  So. 
611. 

16  Minnesota  v.  Bachelder,  1  Wall.  (68  U.  S.)  109,  17  L.  ed.  551. 

17  Act  of  March  3,  1875,  chap.  152,  18  Stat.  482. 

18  Noble  v.  Union  River  Logging  Rd.  Co.,  147  U.  S.  165,  37  L.  ed.  123,  13 
Sup.  Ct.  271.  See  Curtner  v.  United  States,  149  U.  S.  662,  676,  13  Sup.  Ct. 
985,  1041,  37  L.  ed.  890. 

19  Oregon  v.  Hitchcock,  202  U.  S.  60,  50  L.  ed.  935,  26  Sup.  Ct.  568.  See 
further  as  to  jurisdiction  of  courts  in  such  matters  the  following  cases:  Hum- 
bird  V.  Avery,  195  U.  S.  480,  49  L.  ed.  286,  25  Sup.  Ct.  123  (Northern  Pacific 
Railroad  grant) ;  Clark  v.  Herington,  186  U.  S.  206,  22  Sup.  Ct.  872,  46  L.  ed. 
1128  (Union  Pacific  Railroad  grants);  Hawley  v.  Diller,  178  U.  S.  476,  44 
L.  ed.  1157,  20  Sup.  Ct.  986;  Brown  v.  Hitchcock,  173  U.  S.  473,  43  L.  ed. 
772,  19  Sup.  Ct.  485;  Parsons  v.  Venzke,  164  U.  S.  89,  17  Sup.  Ct.  27,  41  L.  ed. 
360;  Monroe  Cattle  Co.  v.  Becker,  147  U.  S.  47,  37  L.  ed.  72,  13  Sup.  Ct.  217; 
United  States  v.  Missouri,  Kansas  &  Texas  Ry.  Co.,  141  U.  S.  358,  12  Sup. 
Ct.  13,  35  L.  ed.  76G  (railroad  and  telegraph  grant);  Sanford  v,  Sanford, 
139  U.  S.  642,  35  L.  ed.  290,  11  Sup.  Ct.  266;  United  States  v.  Marshall  Silver 
Min.  Co.,  129  U.  S.  579,  32  L.  ed.  734,  9  Sup.  Ct.  343;  Craig  v.  Leitensdorfer, 
123  U.  S.  189,  8  Sup.  Ct.  85,  31  L.  ed.  114;  Litchfield  v.  Register  &  Receiver, 

220 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.       §  131 

§  131.  Jurisdiction  of  Courts  in  Respect  to  Interstate 
Commerce  Commission — Generally. 

In  a  ijroceeding  in  the  Circuit  Court  ^'^  under  the  Interstate 
Commerce  Law  to  enforce  an  order  made  by  the  commission,  the 
court  has  no  general  power  to  adjust  differences  between  the 
litigants,  or  to  correct  abuses  in  the  conduct  by  a  railroad 
company  of  its  business;  and,  unless  a  vaUd  order  has  been 
made  by  the  commission  and  violated  by  the  company  no 
relief  can  be  granted  to  the  petitioners.^^  In  a  suit  by  the 
Interstate  Commerce  Commission  to  enforce  an  order  made  by 
it,  the  court  is  not  confined  in  passing  on  the  validity  of  the 
order  to  the  reasons  stated  by  the  commission.^^  In  determin- 
ing whether  an  order  of  the  Interstate  Commerce  Commission 
shall  be  suspended  or  set  aside,  power  to  make,  and  not  the 
wisdom  of,  the  order  is  the  test,  and  the  Federal  Supreme  Court 
must  consider  all  relevant  questions  of  constitutional  power 
or  right,  all  pertinent  questions  as  to  whether  the  administra- 
tive order  is  within  the  scope  of  the  delegated  authority  under 
which  it  purports  to  be  made,  and  also  whether  even  if  in  form 
it  is  within  such  delegated  authority  it  is  not  so  in  substance 
because  so  arbitrary  and  unreasonable  as  to  render  it  invalid. 
If  an  order  of  the  Interstate  Commerce  Commission  is  sus- 

9  Wall.  (76  U.  S.)  575,  19  L.  ed.  681;  Secretary  v.  McGarrahan,  9  Wall. 
(76  U.  S.)  298,  19  L.  ed.  579;  Gaines  v.  Thompson,  7  Wall.  (74  U.  S.)  347, 
19  L.  ed.  62;  Lindsey  v.  Hawes,  2  Black  (67  U.  S.),  554,  17  L.  ed.  265;  Lytle 
V.  Kansas,  22  How.  (63  U.  S.)  193,  16  L.  ed.  306;  Irvine  v.  Marshall,  20  How. 
(61  U.  S.)  558,  15  L.  ed.  994;  Garland  v.  Wynn,  20  How.  (61  U.  S.)  6,  15 
L.  ed.  801. 

When  jurisdiction  of  Land  Department  ceases,  see  United  States  v. 
Schurz,  102  U.  S.  378,  26  L.  ed.  167,  cited  in  Michigan  Land  &  Lumber  Co.  v. 
Rust,  168  U.  S.  589,  593,  18  Sup.  Ct.  208,  42  L.  ed.  591;  Iron  Silver  Min.  Co. 
V.  Campbell,  135  U.  S.  286,  302,  10  Sup.  Ct.  765,  34  L.  ed.  155;  United  States 
V.  American  Bell  Telephone  Co.,  128  U.  S.  315,  363,  32  L.  ed.  450,  9  Sup.  Ct. 
90;  Mullan  v.  United  States,  118  U.  S.  271,  279,  6  Sup.  Ct.  1041,  30  L.  ed.  170; 
Bicknell  v.  Comstock,  113  U.  S.  149,  151,  5  Sup.  Ct.  399,  28  L.  ed.  962; 
City  of  New  Orleans  v.  Paine,  51  Fed.  838. 

20  Under  §  16  of  Interstate  Commerce  Law. 

21  Syllabus  in  Farmers'  Loan  &  Trust  Co.  v.  Northern  Pac.  Ry.  Co.  (U.  S. 
C.  C),  83  Fed.  249. 

22  Southern  Pacific  Co.  v.  Interstate  Commerce  Commission,  200  U.  S. 
536,  26  Sup.  Ct.  330,  50  L.  ed.  585. 

221 


§  132  JURISDICTION   OF  COURTS   OVER 

tained  by  the  court  below  in  part  and  only  the  commission 
appeals,  the  conclusions  of  the  court  below  as  to  those  portions 
of  the  order  sustained  are  not  open  to  inquiry  in  the  Federal 
Supreme  Court;  and  in  determining  whether  the  action  of  the 
court  below  was  or  was  not  correct  said  Supreme  Court  does 
so  irrespective  of  the  reasoning  by  which  such  action  was 
induced. ^^  The  findings  of  the  Interstate  Commerce  Com- 
mission are  made  by  the  law  prima  facie  true,  and  the  Federal 
Supreme  Court  has  ascribed  to  them  the  strength  due  to  the 
judgments  of  a  tribunal  appointed  by  law  and  informed  by 
experienced^ 

§  132.  Jurisdiction  of  Federal  Courts  in  Respect  to  Inter- 
state Commerce  Commission — Rates. 

The  Federal  Circuit  Court  has  jurisdiction  to  review  the 
findings  of  the  Interstate  Commerce  Commission  as  to  rates, 
affecting  interstate  commerce,  long  and  short  hauls,  and  undue 
and  unreasonable  preferences;  or  whether  the  circumstances 
and  conditions  of  the  carriage  have  been  substantially  similar 
or  otherwise,  giving  effect  to  the  findings  as  'prima  facie  evidence 
of  the  matters  stated  therein. ^^  So  power  to  determine  and 
prescribe  what  are  just  and  reasonable  maximum  rates  to  be 
charged  in  interstate  commerce  is,  in  a  limited  way,  conferred 
upon  the  Interstate  Commerce  Commission  by  existing  statute 
law;  but  as  the  commission  acts  only  as  a  legislative  or  admin- 
istrative board,  and  not  judicially,  its  determination  or  action 
does  not,  and  cannot,  preclude  judicial  inquiry  into  the  justness 
and  reasonableness  of  the  rates,  within  the  meaning  of  the 

23  Interstate  Commerce  Commission  v.  Illinois  Central  Rd.  Co.,  215 
U.  S.  452,  54  L.  ed.  — ,  30  Sup.  Ct.  — ,  cited  in  Baltimore  &  Ohio  Rd.  Co. 
V.  Pitcairn  Coal  Co.,  215  U.  S.  481,  30  Sup.  Ct.  — ,  54  L.  ed.  — ,  to  the  point 
that  under  the  court  review  provisions  of  §  15  of  the  act  to  regulate  com- 
merce as  amended  in  1906,  the  courts  are  limited  to  the  question  of  power 
of  the  commission  to  make  the  order  and  cannot  consider  the  wisdom  or 
expediency  of  the  order  itself. 

24  Ilhnois  Central  Rd.  Co.  v.  Interstate  Coimnerce  Commission,  206  U.  S. 
441,  27  Sup.  Ct.  700,  51  L.  ed.  128. 

25  Interstate  Commerce  Commission  v.  Alabama  Midland  Ry.  Co.,  168 
U.  S.  144,  42  L.  ed.  414,  18  Sup.  Ct.  45. 

222 


COKPOKATIUN    SUrEKVlSOKV    COMMISSIONS,    ETC.        §  I'A'J, 

constitutional  guaranty,  for  that  is  a  judicial  question.  The 
P^ederal  Circuit  Court  may,  therefore,  inquire  whether  rates 
fixed  by  the  Interstate  Conuncrce  Commission  are  just  and 
reasonable  within  the  meaning  of  the  constitutional  guaranty, 
and  whether  they  are  unjustly  discriminatory,  or  unduly 
perferential,  within  the  meaning  of  the  statute.  The  statute 
under  which  the  Interstate  Commerce  Commission  derives  its 
power  to  prescribe  rates  at  all  also  unequivocally  recognizes, 
and,  if  there  be  need  therefor,  it  plainly  declares,  that  the 
Federal  Circuit  Courts,  sitting  in  equity,  are  vested  with  juris- 
diction to  entertain,  hear,  and  determine  suits  to  compel 
obedience  to  orders  of  the  commission  prescribing  rates,  and 
also  suits  to  annul  or  enjoin  the  enforcement  of  such  orders. 
It  is  not  conceived  that  the  scope  of  the  inquiry  which  the  court 
is  authorized  to  make,  or  the  effect  to  be  given  to  the  com- 
mission's finding  or  determination  upon  which  its  order  is 
based,  is  intended  to  be  in  anywise  different  when  the  suit  is  one 
to  annul  or  enjoin  the  enforcement  of  the  order  than  when  it  is 
one  to  enforce  obedience  thereto.  It  is  not  intended  that  the 
hearing  in  sucn  a  suit,  whether  it  be  of  the  one  kind  or  the  other, 
shall  be  confined  to  an  ascertainment  of  what  was  determined 
by  the  commission  and  to  a  consideration  of  the  sufficiency  of 
the  facts  as  determined  by  it  to  sustain  the  order;  but  on  the 
contrary,  the  hearing  may  be  de  novo,  and  may  include  the 
taking  and  consideration  of  evidence  other  than  that  before  the 
commission.  Again,  evidence  submitted  by  raihvay  companies 
in  such  case  may  be  considered  which  was  not  before  the  com- 
mission. The  court  should,  however,  start  with  the  presumption 
that  the  order  of  the  commission  is  vaUd,  and  was  made  after 
a  careful  consideration  and  correct  determination  of  every 
question  of  fact  underlying  it.  The  burden  of  showing  that  the 
facts  are  such  as  to  render  the  order  invalid  rests  upon  the 
carrier  assailing  it,  and  unless  the  case  made  on  behalf  of  the 
carrier  is  a  clear  one  the  order  ought  to  be  upheld .^*^    Again, 

28  Missouri,  Kansas  &  Texas  Ry.  Co.  v.  Interstate  Commerce  Commission 
(U.  S.  C.  C),  164  Fed.  645,  650.  A  suit  in  equity  against  the  Interstate 
Commerce  Commission  by  certain  railway  companies  and  the  receivers  of 

223 


§  132  JURISDICTION   OF  COURTS   OVER 

it  is  decided,  however,  that  under  the  Interstate  Commerce 
Act^''  the  Interstate  Commerce  Commission  has  original  and 
exclusive  jurisdiction  to  determine  the  question  of  the  reason- 
ableness of  an  established  rate  for  the  interstate  transportation 
of  freight,  and  when  a  schedule  of  rates  has  been  duly  filed  and 
has  gone  into  effect  the  rates  thereby  prescribed  are  the  only 
lawful  rates  until  changed  by  the  commission,  and  a  court  has 
no  power  to  enjoin  their  enforcement.^^     It  is  declared  in  a 

other  railway  companies  to  annul  and  enjoin  the  enforcement  of  an  order  of 
the  commission  requiring  such  companies  to  desist  from  exacting  certain 
terminal  charges  as  to  shipments  originating  outside  the  State,  and  prescrib- 
ing a  maximum  charge  per  car  for  such  terminal  service,  and  also  requiring 
the  railway  companies  to  desist  from  exacting  existing  through  rates  for 
transportation  of  cattle  in  car  loads  from  and  to  outside  points  and  for  pre- 
scribing for  such  through  service  maximum  rates  to  be  charged.  The  court 
also  says,  as  to  express  declaration  of  the  statute  stated  in  the  text,  that: 
"This  is  shown  (a)  by  the  provision  in  Section  15  [Act  Feb.  4,  1887,  c.  104, 
24  Stat.  384  (U.  S.  Comp.  Stat.  1901,  p.  3165),  as  amended  by  act  June  29, 
1906,  c.  3591,  §  4,  34  Stat.  589  (U.  S.  Comp.  Stat.  Supp.  1907  p.  900)],  that 
'  all  orders  of  the  commission,  except  orders  for  the  payment  of  money,  shall 
take  effect  *  *  *  and  shall  continue  in  force  *  *  *  not  exceeding 
two  years,  *  *  *  unless  the  same  shall  be  *  *  *  suspended  or 
set  aside  by  a  court  of  competent  jurisdiction;'  (b)  by  the  provision  in 
Section  16  that  when  any  carrier  fails  or  neglects  to  obey  'any  order  of  the 
commission,  other  than  for  the  payment  of  money, '  while  the  same  is  in 
effect,  any  party  injured  thereby,  or  the  commission  in  its  own  name,  may 
apply  to  the  Circuit  Court  for  an  enforcement  of  such  order,  and  '  the  court 
shall  prosecute  such  inquiries  and  make  such  investigations,  through  such 
means  as  it  shall  deem  needful  in  the  ascertainment  of  the  facts  at  issue,  or 
which  may  arise  upon  the  hearing  of  such  petition;'  (c)  by  the  further 
provision  in  §  16  that '  the  venue  of  suits  brought  in  any  of  the  Circuit  Courts 
of  the  United  States  against  the  commission  to  enjoin,  set  aside,  annul  or 
suspend  any  order  or  requirement  of  the  commission  shall  be  in  '  designated 
districts,  'and  jurisdiction  to  hear  and  determine  such  suits  is  hereby  vested 
in  such  courts; '  and  (d)  by  the  still  further  provision  in  §  16  that  the  provi- 
sions of  the  expedition  act  [act,  Feb.  11,  1903,  c.  544,  32  Stat.  823  (U.  S. 
Comp.  Stat.  Supp.  1907,  p.  951)] '  are  hereby  made  applicable  to  all  such  suits, 
including  the  hearing  on  an  application  for  a  prehminary  injunction,  and 
are  also  made  applicable  to  any  proceeding  in  equity  to  enforce  any  order  or 
re^iuirement  of  the  commission.'  " 

27  Act  of  Feb.  4,  1S87,  ch;ip.  104,  24  Stat.  379,  U.  S.  Comp.  Stat.  1901, 
p.  3154,  as  amended,  including  the  amendatory  act  of  June  29,  1906,  chap. 
3591,  34  Stat.  584,  U.  S.  Comp.  Supp.  1907,  p.  892. 

28  Syllabus  in  Great  Northern  Railway  Co.  v.  Kalispell  Lumber  Co.,  165 
Fed.  25. 

224 


CORPORATION   SUPERVISORY  COMMISSIONS,    ETC.        §  133 

comparatively  recent  case  that  the  statute  gives  'prima  facie 
effect  to  the  findings  of  the  commission,  and  when  those  find- 
ings are  concurred  in  by  the  Federal  Circuit  Court,  they  should 
not  be  interfered  with,  unless  the  record  establishes  that  clear 
and  unmistakable  error  has  been  committed.^** 

§  133.  Same  Subject. 

The  reasonableness  of  a  rate  is  a  question  of  fact,  and  while 
the  conclusions  of  the  Interstate  Commerce  Commission  are 
subject  to  review,  if  that  body  excludes  facts  and  circumstances 
that  ought  to  have  been  considered  they  will  not  after  having 
been  affirmed  by  the  Circuit  Court  and  Circuit  Court  of  Ajjpeals, 
be  reversed  because  the  commission  did  not  adopt  the  pre- 
sumptions of  mixed  law  and  fact  put  forward  as  elements  for 
determining  the  reasonableness  of  a  rate;  and  where  the  inquiry 
before  the  commission  is  essentially  one  of  fact,  the  existence 
of  competition  cannot  in  the  Federal  Supreme  Court  be  made 
an  inference  of  law  dominating  against  the  actual  findings  of 
the  commission  and  their  affirmance  by  the  Circuit  Court.^" 
The  Interstate  Commerce  Act  was  intended  to  afford  an  effective 
and  comprehensive  means  of  redressing  wrongs  resulting  from 
unjust  discriminations  and  undue  preference,  and  to  that  end 
placed  upon  carriers  the  duty  of  publishing  schedules  of  reason- 
able and  uniform  rates;  and  consistently  with  the  provisions 
of  that  law,  a  shipper  cannot  maintain  an  action  at  common 
law  in  a  State  Court  for  excessive  and  unreasonable  freight 
rates  exacted  on  interstate  shipments  where  the  rates  charged 
were  those  duly  fixed  by  the  carrier  according  to  the  act  and 
had  not  been  found  to  be  unreasonable  by  the  Interstate  Com- 
merce Commission.  And  where  defendant  in  the  State  Court 
contends  that,  consistently  with  the  Interstate  Commerce  Act, 
the  State  Court  has  no  power  to  grant  the  relief,  and  such 
contention  is  essentially  involved  and  expressly,  and  in  order 

29  Cincinnati,  Hamilton  &  Dayton  Ry.  Co.  v.  Interstate  Commerce  Com- 
mission, 206  U.  S.  142,  154,  51  L.  ed.  995,  27  Sup.  Ct.  648,  per  Mr.  Justice 
White,  case  affirms  146  Fed.  559. 

30  Illinois  Central  Rd.  Co.  v.  Interstate  Commerce  Commission,  206  U.  8. 
441,  27  Sup.  Ct.  700,  51  L.  ed.  128. 

15  225 


§  134  JURISDICTION    OF   COURTS   OVER 

to  support  the  judgnieiit,  necessarily,  decided  adversely  to  the 
defendant,  a  Federal  question  exists  and  the  Federal  Supreme 
Court  can  review  the  judgment  on  a  writ  of  error .^^ 

§  134.  Same  Subject— Injunction— Where  Redress  Must 
First  Be  Sought. 

A  Federal  Court  of  the  district  of  which  the  complainants 
are  inhabitants  has  jurisdiction  of  a  suit  to  enjoin  several  rail- 
road companies,  who  are  members  of  an  association,  from 
putting  into  effect  an  alleged  unlawful  rate  on  all  food  com- 
modities shipped  in  interstate  commerce  within  the  territory 
in  which  such  district  is  situated,  although  none  of  the  defend- 
ants are  citizens  of  the  State,  where  they  operate  roads  in  the 
State  and  district  and  are  found  and  served  therein.^^  It  was 
subsequently  held,  however,  that  a  Federal  Court  of  Equity 
might  enjoin  the  putting  into  effect  an  arbitrary  and  unrea- 
sonable and  unjust  interstate  freight  rate  which  a  combina- 
tion had  adopted  until  the  Interstate  Commerce  Commission 
should  pass  upon  such  rate  in  order  thereby  to  prevent  re- 
sulting irreparable  injury  .^^  It  is  held,  however,  that  a  shipper 
seeking  reparation  predicated  upon  the  unreasonableness  of  an 
established  rate  under  the  act  to  regulate  commerce  must 
primarily  seek  redress  through  the  Interstate  Connnerce  Com- 
mission, as  that  body  has  plenary  power  to  determine  in  the 
first  instance  what  rates  are  legal  or  illegal,  reasonable  or 
excessive  for  the  transportation  of  interstate  commerce;  and 
in  maintaining  action  it  must  be  alleged  that  resort  has  been 
had  to  that  commission  and  the  rate  charged  and  paid  declared 
excessive  and  unreasonable.^^ 

31  Texas  &  Pacific  Ry.  Co.  v.  Abilene  Cotton  Oil  Co.,  204  U.  S.  426,  51  L.  ed. 
523,  27  Sup.  Ct.  350. 

32  Syllabus  in  Macon  Grocery  Co.  v.  Atlantic  Coast  Line  Rd.  Co.  (U.  S. 
C.  C),  163  Fed.  736.  Bill  for  injunction  was  retained  until  application  to 
and  determination  by  the  Interstate  Commerce  Commission. 

33  Macon  Grocery  Co.  v.  Atlantic  Coast  Line  Rd.  Co.  (U.  S.  C.  C.  ),  163 
Fed.  738.  Compare  Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  Winnett 
(U.  S.  C.  C.  A.),  162  Fed.  242. 

34  Meeker  v.  Lehigh  Valley  Rd.  Co.  (U.  S.  C.  C),  162  Fed.  354,  citing  Texas 

22G 


CORPORATION    .SUPERVISORY    COMMISSIONS,    ETC.    §§  135,  135a 

§  135.  Same  Subject — Compensation  of  Carrier  Services 
Rendered  at  Shipper's  Request — Practice  and  Procedure  — 
Remanding  Case. 

A  carrier  which  is  at  service  and  expenvSC  in  stopping  goods 
in  transit  for  inspection  and  reloading  for  the  benefit  of  the 
shipper  is  entitled  to  compensation  in  addition  to  the  actual 
expense  incurred.  But  where  the  Interstate  Connnercc  Com- 
mission has  held,  and  its  order  has  been  affirmed  by  the  Federal 
Circuit  Court  and  Circuit  Court  of  Appeals,  that  a  carrier  can- 
not charge  for  a  service  rendered  at  the  request  and  for  the 
benefit  of  the  shipper  any  amount  in  excess  of  the  actual  expense 
incurred,  and  fixed  a  rate  less  than  the  Federal  Supreme  Court 
considers  reasonable,  said  court  cannot,  where  the  testimony 
has  not  been  preserved  in  the  record,  fix  a  fair  and  reasonable 
charge,  but  will  reverse  the  judgments  of  both  courts  and 
remand  the  case  to  the  former  court  with  instructions  to  send 
the  matter  back  to  the  commission  for  further  investigation 
and  report  .^^ 

§  135a.  Jurisdiction  of  Federal  Courts  in  Respect  to  Inter- 
state Commerce  Commission — Regulation  of  Carriers  as  to 
Cars — Where  Redress  Must  First  be  Sought. 

Regulations  which  are  primarily  within  the  competency  of 
tJie  Interstate  Commerce  Commission  are  not  subject  to 
judicial  supervision  or  enforcement  until  that  body  has  been 
I)roperly  afforded  an  opportunity  to  exert  its  administrative 
functions.  So  the  distribution  to  shippers  of  coal  cars  includ- 
ing those  owned  by  the  shippers  and  those  used  by  the  carrier 
for  its  own  fuel  is  a  matter  involving  preference  and  discrimina- 
tion and  within  the  competency  of  the  Interstate  Commerce 
Commission,  and  the  courts  cannot  interfere  with  regulations 
in  regard  to  such  distribution  until  after  action  thereon  by  the 
commission.     And  even  if  not  assigned  as  error,  the  United 

&  Pacific  Ry.  Co.  v.  Abilene  Cotton  Oil  Co.,  204  U.  S.  426,  439-441,  448,  27 
Sup.  Ct.  350,  355,  51  L.  ed.  553. 

35  Southern  Ry.  Co.  v.  St.  Louis  Hay  &  Grain  Co.,  214  TJ.  S.  297,  53  L.  ed. 
1004,  29  Sup.  Ct.  678,  rev'g  153  Fed.  728. 

227 


§  136  JURISDICTION   OF   COURTS   OVER 

States  Supreme  Court  will  consider  the  jurisdictional  question 
of  whether  there  is  power  in  the  court,  in  view  of  the  act  to 
regulate  commerce,  to  grant  relief  prayed  for  in  regard  to 
matters  within  the  competency  of  said  commission.^^ 

§  136.  Jurisdiction  of  Federal  Courts  in  Respect  to  Inter- 
state Commerce  Commission — Shipper's  Indebtedness  for 
Demurrage — Refusal  of  Carrier  to  Receive  Goods. 

It  is  held  in  a  recent  case  that  the  United  States  Circuit  Court 
has  jurisdiction  to  determine  in  the  first  instance  the  indebted- 
ness of  a  shipper  to  a  railroad  company  for  demurrage,  under 
the  rules  adopted  by  the  company  and  filed  with  the  Interstate 
Commerce  Commission,  where  it  depends  upon  the  construction 
and  not  upon  the  reasonableness  or  unreasonableness  of  such 
rules  although  the  latter  question  is  one  primarily  for  the  com- 
mission.^^ Where  an  interstate  carrier  refuses  to  receive  and 
forward  goods  tendered  for  shipment  and  the  goods  consist  of 
a  class  for  which  a  classification  and  rate  had  been  generally 
made,  and  there  is  no  complaint  that  the  rates  are  unreasonable, 
or  that  the  shipper  was  subjected  to  any  undue  disadvantage  in 
competition  with  other  shippers  of  his  class  or  that  the  place 
from  which  the  goods  were  to  be  shipped  is  discriminated 
against,  a  suit  based  on  such  refusal  to  carry  is  one  under  the 
common  law,  is  in  personam,  and  is  not  dependent  upon  the 
Interstate  Commerce  Act,  or  limited  to  proceedings  before  the 
Interstate  Commerce  Commission,  but  the  State  Courts  where 
tender  of  the  shipment  was  made  or  the  Federal  Courts  on 
removal  have  jurisdiction,  without  regard  to  the  fact  that  the 
refusal  was  based  upon  a  statute  of  another  State  to  which 
they  were  consigned  making  it  unlawful  for  carriers  to  bring 
into  certain  countries,  etc.,  in  such  State  goods  of  the  class 
tendered  for  shipment,  as  such  statute  was  a  police  regulation 
and  would  be  void  as  a  regulation  of  interstate  commerce.^* 

38  Baltimore  &  Ohio  Rd.  Co.  v.  Pitcairn  Coal  Co.,  215  U.  S.  481,  54  L.  ed. 
— ,  30  Sup.  Ct.  — .    See  §  106a,  herein. 

37  Syllabus  in  Hite  v.  Central  Ry.  Co.  of  N.  J.  (U.  S.  C.  C.  A.),  171  Fed.  370. 

38  Louisville  &  Nashville  R.  Co.  v.  F.  W.  Cook  Brewing  Co.  (U.  S.  C.  C.  A.), 
172  Fed.  117. 

228 


CORPORATION   SUPERVISORY    COMMISSIONS,    ETC.       §  137 

§  137.  Use  of  Process  of  Federal  Circuit  Court  in  Aid  of 
Inquiries  Before  Interstate  Commerce  Commission — Testi- 
mony—Production of  Books,  etc. —Fine  and  Imprisonment 
— Contempt — Power  of  Commission. 

The  twelfth  section  of  the  Interstate  Commerce  Act  authoriz- 
ing the  Federal  Circuit  Courts  to  use  their  process  in  aid  of 
inquiries  before  the  commission  established  by  that  act,  is  not 
in  conflict  with  the  Constitution  of  the  United  States  as  impos- 
ing on  judicial  tribunals  duties  not  judicial  in  their  nature:  and 
a  petition  filed  under  that  section  in  the  Circuit  Court  against  a 
witness,  duly  summoned  to  testify  before  the  commission,  to 
compel  him  to  testify  or  produce  books,  documents  and  papers 
relating  to  the  matter  under  investigation  before  that  body, 
makes  a  case  of  controversy  to  which  the  judicial  power  of  the 
United  States  extends.  The  power  conferred  upon  the  com- 
mission to  require  the  attendance  and  testimony  of  witnesses 
and  the  production  of  books,  papers  and  documents  relating  to 
the  matter  under  investigation  by  it  imposes  upon  anyone 
summoned  by  that  body  to  appear  and  testify,  or  to  produce 
books,  etc.,  the  duty  so  to  do,  if  the  testimony  or  evidence 
sought  relate  to  the  matter  under  investigation,  provided  such 
matter  is  one  which  the  commission  is  legally  entitled  to  investi- 
gate, and  the  witness  is  not  excused  by  law  or  on  some  personal 
ground  from  doing  what  the  commission  so  requires  him  to  do. 
But  the  authority  to  destroy  or  impair  fundamental  guarantees 
of  personal  rights  which  are  recognized  by  the  Constitution  as 
inhering  in  the  freedom  of  the  citizen,  is  not  embodied  in  the 
power  given  to  Congress  to  regulate  iiitc^rstate  commerce.  And 
a  defendant  in  a  proceeding  of  such  a  character  before  the 
Circuit  Court  may  contend  that  he  was  protected  by  the  Con- 
stitution from  answering  the  questions  propounded  to  him  and 
that  he  was  not  bound  to  produce  the  books,  etc.,  ordered  to  be 
produced,  and  that  neither  the  questions  nor  the  books,  etc., 
related  to  the  particular  matter  under  investigation,  nor  to  any 
matter  which  the  commission  was  entitled  under  the  consti- 
tution or  laws  to  investigate,  and  the  court  upon  determining 
such  issue  in  favor  of  the  defendant  could  dismiss  the  petition 

229 


§  137  JURISDICTION   OF  COURTS   OVER 

upon  its  merits.  The  inquiry  whether  a  witness  before  the  com- 
mission is  bound  to  answer  a  particular  question  propounded 
to  him,  or  to  produce  books,  etc.,  in  his  possession  and  called 
for  by  that  body,  is  one  that  cannot  be  committed  to  a  sub- 
ordinate administrative  or  executive  tribunal  for  final  determi- 
nation. Such  a  body  could  not,  under  our  system  or  government, 
and  consistently  with  due  process  of  law,  be  invested  with 
authority  to  compel  obedience  to  its  orders  by  a  judgment  of 
fine  or  imprisonment.  Except  in  the  particular  instances 
enumerated  in  the  Constitution  ^^  of  the  exercise  by  either  house 
of  Congress  of  the  right  to  punish  disorderly  behavior  upon  the 
part  of  its  members,  and  to  compel  the  attendance  of  witnesses, 
and  the  production  of  papers  in  election  and  impeachment 
cases,  and  in  cases  that  may  involve  the  existence  of  those 
bodies,  the  power  to  impose  fine  or  imprisonment  in  order  to 
compel  the  performance  of  a  legal  duty  imposed  by  the  United 
States  can  only  be  exerted,  under  the  law  of  the  land,  by  a 
competent  judicial  tribunal  having  jurisdiction  in  the  premises. 
Such  a  proceeding  under  the  twelfth  section  of  the  Interstate 
Commerce  Act  is  not  merely  ancillary  and  advisory,  nor  is  its 
object  merely  to  obtain  an  opinion  of  the  Circuit  Court  that 
would  be  without  operation  upon  the  rights  of  the  parties.  Any 
judgment  rendered  will  be  a  final  and  indisputable  basis  of 
action  as  between  the  commission  and  the  defendant  and 
furnish  a  precedent  for  similar  cases.  The  judgment  is  none  the 
less  one  of  a  judicial  tribunal  dealing  with  questions  judicial 
in  their  nature  and  presented  in  the  customary  forms  of  judicial 
proceedings,  because  the  effect  may  be  to  aid  an  administrative 
or  executive  body  in  the  performance  of  duties  legally  imposed 
upon  it  by  Congress  in  execution  of  a  power  granted  by  the 
Constitution.  The  issue  in  such  a  case  is  not  one  for  the  deter- 
mination of  a  jury,  nor  can  any  question  of  contempt  arise 
until  the  issue  of  law  in  the  Circuit  Court  is  determined  adversely 
to  the  defendant,  and  he  refuses  to  obey,  not  the  order  of  the 

39  Which  are  considered  in  Kilbourn  v.  Thompson,  103  U.  S.  168,  190,  26 
L.  ed.  377,  and  in  Anderson  v.  Dunn,  6  Wheat.  (19  U.  S.)  204,  5  L.  ed. 
242. 

230 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.        §  137 

commission,  but  the  final  order  of  the  court.     In  matters  of 
contempt  a  jury  is  not  required  by  due  process  of  law.^" 

<o  Interstate  Commerce  Commission  v.  Brimson,  154  U.  S.  447,  14  Sup.  Ct. 
1125,  38  L.  ed.  1047,  dissenting  opinion  in  155  U.  S.  3,  39  L.  cd.  49,  15  Sup, 
Ct.  19.  [Case  of  appeal  bringing  up  for  review  a  judgment  dismissing  a 
petition  filed  in  the  Federal  Circuit  Court  by  the  Interstate  Commercf;  Com- 
mission under  the  act  of  Congress  to  "regulate  commerce  "  approved  Feb.  4 
1887,  and  amended  by  acts  of  March  2,  1889,  and  Feb.  10,  1891,  24  Stat. 
379,  chap.  104;  25  Stat.  855,  chap.  382;  26  Stat.  743,  chap.  128;  1  Supp.  Rev. 
Stat.  529,  684,  891.  (See  as  to  act  of  1903,  194  U.  S.  25,  cited  below  in  thi.s 
note.)  The  petition  was  based  on  the  twelfth  section  of  the  act  authorizing 
the  commission  to  invoke  the  aid  of  any  court  of  the  United  States  in  requir- 
ing the  attendance  and  testimony  of  witnesses,  and  the  production  of  docu- 
ments, books,  and  papers.  The  Circuit  Court  held  that  section  to  be  unconsti- 
tutional and  void,  as  imposing  on  the  judicial  tribunals  of  the  United  States 
duties  that  were  not  judicial  in  their  nature.  In  the  judgment  of  that  court, 
the  proceeding  was  not  a  case  to  which  the  judicial  power  of  the  United  States 
extended.  Interstate  Commerce  Commission,  In  re,  53  Fed.  476,  480],  dis- 
tinguishing (on  the  fourth  point)  Sanborn,  In  re,  148  U.  S.  222,  37  L.  ed. 
429,  13  Sup.  Ct.  577;  Gordon  v.  United  States,  117  U.  S.  697,  29  L.  ed.  921; 
Barrow  v.  Hill  (Todd's  Case),  13  How.  (54  U.  S.)  52,  14  L.  ed.  47;  United 
States  V.  Ferreira,  13  How.  (54  U.  S.)  40,  14  L.  ed.  42;  Hayburn's  Case,  2 
Dall.  (2  U.  S.)  409,  1  L.  ed.  436.  Principal  case  is  cited  in  Harriman  v.  Inter- 
state Commerce  Commission,  211  U.  S.  407,  418  (to  the  point  that  "  it  was  in- 
timated that  there  was  a  limit "  to  the  power  of  Congress  to  legislate  upon 
the  subject-matter  of  the  questions  put  to  the  witnesses;  but  the  question 
was  passed  by) ;  cited  and  quoted  Id.,  427  (in  dissenting  opinion,  as  to  author- 
ity of  Interstate  Commerce  Commission  to  conduct  an  investigation  upon  its 
own  motion);  cited  in  Alexander  v.  United  States,  201  U.  S.  117,  121,  50  L. 
ed.  686,  26  Sup.  Ct.  356  (as  to  contention  that  to  justify  appeal  the  order  of 
the  Circuit  Court  constitutes  practically  an  independent  proceeding  and 
amounting  to  final  judgments) ;  cited  and  quoted  from  in  Hale  v.  Henkel,  201 
U.  S.  43,  72,  26  Sup.  Ct.  370,  50  L.  ed.  652  (as  sustaining  the  constitutional- 
ity of  the  Interstate  Commerce  Act  so  far  as  it  authorized  the  Circuit  Courts 
to  use  their  processes  in  aid  of  inquiries  before  the  commission) ;  Interstate 
Commerce  Commission  v.  Baird,  194  U.  S.  25,  42,  48  L.  ed.  860,  24  Sup.  Ct. 
563  (to  point  that  commission  has  no  power  to  fix  rates).  Id.,  38  (to  point 
that  before  passage  of  act  of  1903,  a  petition  filed  under  §  12  of  the  prior 
act,  made  a  case  of  controversy  to  which  the  judicial  power  of  the  United 
States  extended;  also  as  to  proceeding  not  being  merely  advisory  to  com- 
mission, and  judgment  being  final  and  indisputable  basis  of  action  as  be- 
tween commission  and  defendant,  and  as  furnishing  a  precedent  in  similar 
cases;  and  while  the  object  is  obtaining  testimony,  important  questions  may 
be  involved  touching  power  of  commission ;  also  adding  that  intent  of  Congress 
rendered  it  imperative  that  such  cases  should  be  promptly  determined  in  a 
court  of  last  resort.  This  case  holds  that  under  the  proviso  in  §  3  of  the  act  of 
Feb.  19,  1903,  a  direct  appeal  may  be  taken  to  the  Federal  Supreme  Court 

231 


§  138  JURISDICTION   OF  COURTS   OVER 

§  13S.  Judicial  Functions  of  Nonjudicial  Bodies — Power 
to  Compel  Corporations  to  Produce  Books,  etc. — Notice — 
Courts  — Due  Process  and  Equal  Protection — Contempt — 
Compensation  to  Witness. 

In  connection  with  the  point  first  stated  under  the  last 

from  a  judgment  of  the  Circuit  Court  in  a  proceeding  brought  by  the  Inter- 
state Commerce  Commission,  under  the  direction  of  the  attorney  general, 
to  obtain  orders  requiring  the  testimony  of  witnesses  and  the  production  of 
books  and  documents);  cited  in  Northern  Securities  Co.  v.  United  States, 
193  U.  S.  197,  353,  48  L.  ed.  679,  24  Sup.  Ct.  436  (to  point  that  railroad 
companies  are  instruments  of  commerce  and  as  operating  pubhc  highways 
are  subject  to  governmental  control  and  regulation) ;  Atlantic-  &  Pacific 
Teleg.  Co.  v.  Philadelphia,  190  U.  S.  160,  162,  47  L.  ed.  995,  23  Sup.  Ct.  671 
(to  point  of  exclusive  power  of  Congress  to  regulate  interstate  commerce) ; 
District  of  Columbia  v.  Eshn,  183  U.  S.  62,  66,  22  Sup.  Ct.  17,  46  L.  ed.  85 
(as  to  extent  of  exercise  of  judicial  power  by  Supreme  Court  in  matter  of 
jurisdiction  of  Court  of  Claims;  a  final  judgment  and  appeal,  dismissed  foi" 
want  of  jurisdiction);  Downes  v.  Bidwell,  182  U.  S.  244,  289,  45  L.  ed.  1088, 
21  Sup.  Ct.  770  (to  point  that  wherever  a  power  is  given  by  Congress  and  a 
limitation  is  imposed  on  the  authority,  such  restriction  operates  upon  and 
confines  every  action  on  the  subject  within  its  constitutional  limits) ;  La  Abra 
Silver  Mining  Co.  v.  United  States,  175  U.  S.  423,  457,  44  L.  ed.  276,  20  Sup. 
Ct.  168  (to  point  that  Court  of  Claims  function  is  ancillary  and  advisory,  and 
findings  or  conclusions  not  enforceable  by  any  process  of  execution  issuing 
from  the  court,  nor  is  it  by  statute  the  final  and  indisputable  basis  of  action) ; 
cited  and  quoted  from  in  United  States  v.  Duell,  172  U.  S.  576,  588,  19  Sup. 
Ct.  286,  43  L.  ed.  559  (and  upon  point  of  finality  of  judgment  and  being  none 
the  less  one  because  effect  may  be  to  aid  an  administrative  or  executive  body 
in  performance  of  duties  legally  imposed  by  Congress  under  the  Constitution; 
a  case  as  to  judicial  function  of  Commissioner  of  Patents) ;  cited  in  United 
States  v.  Joint  Traffic  Assoc,  171  U.  S.  505,  571,  43  L.  ed.  259,  19  Sup.  Ct. 
25  (to  point  that  power  to  regulate  commerce  has  no  limitations  other  than 
prescribed  by  the  Constitution  and  such  power  does  not  carry  right  to 
destroy  or  impair  limitations  and  guarantees  in  Constitution  and  its  amend- 
ments; constitutional  right  of  citizen  to  make  contracts,  and  power  of 
Congress  to  prohibit  contracts  of  nature  involved  in  this  case) ;  cited  and 
quoted  from  in  Debs,  In  re,  158  U.  S.  564,  597,  15  Sup.  Ct.  900,  39  L.  ed.  1092 
(as  to  contempt  not  being  a  question  triable  of  right  by  a  jury);  cited  in 
Fulgham  v.  Midland  Valley  R.  Co.,  167  Fed.  660,  662,  (as  to  exclusive  power 
of  Congress  to  regulate  commerce;  a  case  of  action  for  injury  to  employe  and 
scope  of  Railroad  Employers'  Liability  Act  of  Congress) ;  O'Shea,  In  re,  166 
Fed.  180,  182  (to  point  that  argument  not  sound,  that  witness  obligated  to 
answer,  in  a  special  examination,  questions  as  to  merits  of  pension  claims  even 
though  tending  to  incriminate) ;  Interstate  Commerce  Commission  v.  Harri- 
man,  157  Fed.  436;  Riggsbee,  In  re,  151  Fed.  701,  703  (to  point  that  party 
is  not  entitled  to  jury  trial) ;  Western  New  York  &  Pennsylvania  Rd.  Co.  v. 

232 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.        §  138 

preceding  section  it  is  held  by  the  Federal  Supreme  Court  in 
a  comparatively  recent  case  that  nothing  in  the  Federal  Con- 
stitution prohibits  a  State  from  conferring  judicial  functions  on 
nonjudicial  bodies.  The  case  was  one  of  notice  to  a  corporation, 
given  pursuant  to  a  statute,  to  produce  certain  described  books 
and  papers  before  the  grand  jury.  The  notice;  was  recjuired  to 
be  issued  from  the  court  or  tribunal  before  whom  the  joapers 
were  required  to  be  produced,  and  for  neglect  or  refusal  with- 
out  reasonable   cause   to   comply  the   corporation   could   be 

Penn.  Refining  Co.,  137  Fed.  343,  349  (to  point  that  Interstate  Commerce 
Commission  though  clothed  with  quasi-judicial  functions,  is  an  administrative 
body  in  contradistinction  to  a  judicial  tribunal);  Interstate  Commerce  Com- 
mission V.  Philadelphia  &  R.  Ry.  Co.,  123  Fed.  969,  970  (to  point  that  upon 
application  for  an  order  by  Interstate  Commerce  Commission  requiring  wit- 
nesses to  appear  before  it,  etc.,  the  Circuit  Court  does  not  sit  as  an  appellate 
tribunal,  but  should  decide  all  questions  raised  as  to  relevancy  of  such 
testimony  if  such  questions  were  raised  before  it  in  the  first  instance) ;  United 
States  V.  Lehigh  Valley  R.  Co.,  115  Fed.  373,  375  (to  point  as  to  what  is  not 
an  interstate  shipment;  case  of  mandamus;  authority  of  Federal  Court  to 
compel  shipment  where  terminal  points  within  same  State);  cited  and 
quoted  from  in  Kinney,  In  re,  102  Fed.  468,  473  (as  to  there  being  no  such 
thing  as  contempt  of  a  subordinate  administrative  body  and  that  determi- 
nation by  Circuit  Court  and  refusal  to  obey  are  prerequisites;  a  case  of  power 
of  collector  of  internal  revenue) ;  cited  in  Ripon  Knitting  Works  v.  Schreiber, 
101  Fed.  810,  813  [(in  quotation  from  Debs  case  cited  above  in  this  note)  upon 
point  of  contempt;  in  question  as  to  power  of  court  of  bankruptcy  to  punish 
for];  Wyckoff,  Seamans  &  Benedict  v.  Wagner  Typewriter  Co.,  99  Fed.  158, 
159  (case  of  refusal  of  stockholder  as  witness,  to  answer  question  tending  to 
criminate,  and  declared  not  a  case  under  Interstate  Commerce  Act) ;  United 
States  v.  Sweeney,  95  Fed.  434,  450  [(in  quotation  from  Debs  case  cited  above 
in  this  note)  as  to  denial  of  trial  by  jury  to  persons  guilty  of  contempt]; 
United  States  v.  Bell,  81  Fed.  8.30,  843  (generally  as  to  protection  of  witnesses 
against  inquisitorial  system;  case  of  examination  before  special  pension 
examiner  and  incriminating  testimony);  Gross,  In  re,  78  Fed.  107,  109  (as  to 
application  to  commissioners  to  Circuit  Court  to  enforce  obedience  to 
subpoenas  being  a  "case"  to  which  the  judicial  power  of  the  United  States 
extends;  a  case  as  to  constitutionality  of  act  authorizing  judges  and  clerks 
of  United  States  Courts  to  issue  subpoenas,  when  Commissioner  of  Pensions 
applies  therefor);  Interstate  Commerce  Commission  v.  Cincinnati,  N.  O.  & 
T.  P.  R.  Co.,  64  Fed.  981,  982  (to  point  that  Interstate  Commerce  Commission 
is  not  a  court  but  an  administrative  body  lawfully  created,  exercising  quasi- 
judicial  powers  and  that  its  rulings  entitled  to  highest  respect);  King  v. 
M'Lean  Asylum  of  Mass.  Gon'I.Hosp.,  (U  Fed.  325,  339  (generally  as  to 
"cases,"  "controversies"  and  "questions"  included  within  the  Federal 
jurisdiction. 

233 


§  138  JURISDICTION   OF   COURTS   OVER 

punished  by  the  court  having  jurisdiction  of  the  person  to 
punish  for  contempt.  It  was  further  held  in  connection  with 
the  point  above  mentioned  that  it  was  within  the  power  of  the 
State,  and  due  process  of  law  was  not  denied  thereby,  to  require 
a  corporation,  doing  business  in  the  State,  to  produce  before 
tribunals  of  the  State  books  and  papers  kept  by  it  in  the  State, 
although  at  the  time  the  books  might  be  outside  the  State;  that 
so  long  as  an  opportunity  to  be  heard  is  given  to  the  party 
objecting  to  the  notice  to  produce  books  and  papers,  before 
the  proceeding  to  enforce  such  production  is  closed,  due  process 
of  law  is  afforded,  and  if  the  State  Court  has  construed  the 
statute  providing  for  such  production  to  the  effect  that  objec- 
tions raised  before  a  grand  jury  must  be  reported  to  the  court 
for  action,  there  is  opportunity  to  be  heard;  that  whether  a 
notice  to  produce  books  and  papers  is  broader  than  the  State 
statute  provides  for  is  not  a  Federal  question ;  that  a  corpora- 
tion required  to  produce  books  and  papers  cannot  refuse  to 
produce  them  on  the  ground  that  it  might  incriminate  them, 
it  being  for  the  court,  after  inspection,  to  determine  the  suffi- 
ciency of  the  objection  and  what  portion,  if  any,  of  the  books 
and  papers  produced  should  be  excluded;  that  an  objection 
that  a  notice  to  produce  books  and  papers  is  too  broad  cannot 
be  urged  against  the  validity  of  an  order  adjudging  the  party 
refusing  to  comply  guilty  of  contempt ;  that  a  notice  to  produce 
is  not  too  broad  where  it  is  limited  to  books  and  papers  relating 
to  dealings  with  certain  specified  parties  between  certain  speci- 
fied dates;  that  a  State  statute  providing  for  the  production  of 
books  and  papers  by  corporations  does  not  deny  to  corporations 
the  equal  protection  of  the  laws  and  that  such  a  classification  is 
a  proper  one;  and,  briefly  stated,  that  a  State  statute  providing 
for  the  production  of  their  books  and  papers  by  corporations  be- 
fore courts,  grand  juries  and  other  tribunals,  and  punishing  cor- 
porations for  failure  to  comply  therewith  for  contempt  is  not 
unconstitutional  as  depriving  corporations  of  their  property 
without  due  process  of  law,  or  as  denying  them  the  equal  pro- 
tection of  the  laws,  or  as  conferring  judicial  functions  on  non- 
judicial bodies,  or  as  taking  private  property  for  public  use 
234 


CORPORATION   SUPERVISORY    COMMISSIONS,    ETC.       §  139 

without  comperiHatioii,  or  us  constituting  unreasonable  searches 
and  seizures  or  requiring  corporations  to  incriminate  themselves. 
An  objection  was  also  raised  in  this  case  that  the  statute  pro- 
vided no  compensation  for  the  time,  trouble  and  expense 
imposed  upon  a  corporation  in  a  foreign  State  or  country  in  col- 
lecting and  sending  the  documents  demanded  to  the  State  of 
enactment  of  said  statute,  and  that  it  would  thereby  take,  if  en- 
forced, private  property  for  public  use  without  compensation, 
and  it  was  held  that  if  the  person  producing  the  books  and 
papers  is  entitled,  under  the  general  law  of  the  State,  to  com- 
pensation as  a  witness,  the  failure  of  the  statute  requiring  the 
production  of  books  and  papers  of  corporations  to  provide  com- 
pensation to  the  corporation  itself  for  the  time,  trouble  and  ex- 
pense of  such  production  does  not  amount  to  taking  private 
property  without  compensation.'*^ 

§  139.  Jurisdiction    of   Courts   in   Respect   to   Railroad 
Commissions — Generally. 

In  Connecticut  one  injured  in  his  legal  rights  by  unlawful 
action,  either  of  a  municipal  board,  or  of  the  board  of  railroad 

«  Consolidated  Rendering  Co.  v.  Vermont,  207  U.  S.  541,  52  L.  ed.  327,  28 
Sup.  Ct.  425,  aff'g  66  Atl.  790.  The  court,  per  Mr.  Justice  Peckham  said  as  to 
this  last  point:  "The  prohibition  to  that  effect  is  found  in  the  Fifth  Amend- 
ment to  the  Federal  Constitution.  Here  again  we  meet  the  question  whether 
that  amendment,  because  of  the  subsequent  adoption  of  the  Fourteenth 
Amendment,  applies  to  a  State  proceeding,  but  for  the  reasons  already 
stated  we  do  not  find  it  expedient  to  discuss  it  here.  We  do  not  say  that  in 
any  event  a  witness  is  entitled  to  compensation  in  order  to  avoid  the  above 
constitutional  provision,  but  the  Supreme  Court  in  this  case  has  held  that 
the  general  law  of  the  State  in  reference  to  the  compensation  of  witnesses 
applied  to  this  statute.  The  answer  which  the  counsel  for  the  company 
makes  is  that  neither  the  statute  nor  the  notice  required  the  attendance  of 
anyone  as  a  witness,  but  was  merely  an  order  for  production  for  which  no 
compensation  was  provided,  either  by  the  statute  or  under  the  general  law. 
But  the  papers  cannot  walk  into  court  of  themselves,  and  when  they  are 
brought  there  by  virtue  of  the  notice  to  produce  served  on  the  company, 
and  they  are  given  to  some  person  by  the  company  for  the  purpose  of  such 
production,  he  has  a  right  to  be  sworn  as  to  the  papers  which  he  produces  for 
the  purpose  of  identification,  if  nothing  else,  and  the  State  Court  has  held 
that  he  is  entitled  as  a  witness  to  compensation." 

235 


§  139  JURISDICTION   OF  COURTS   OVER 

commissioners,  in  the  exercise  of  the  specified  administrative 
powers  of  such  board,  may  apply  to  the  Superior  Court,  or  a 
judge  thereof  in  chambers,  by  ''appeal,"  for  such  relief  as  comes 
within  the  judicial  power  of  the  court,  and  this  process  runs 
against  the  municipal  board  when  the  injury  results  from  the 
unlawful  action  of  that  board.  In  this  case  it  appeared  that 
the  New  York,  New  Haven  &  Hartford  Railroad  Company 
being  a  street-railway  company,  and  desiring  to  transmit 
electricity  from  its  power  station  north  of  New  London  to  a 
substation  in  New  London,  where  the  electricity  was  to  be 
used  for  its  street-railway  lines,  applied  to  the  common  council 
of  New  London  for  their  approval  of  the  erection  of  a  line  of 
poles  and  overhead  wires  along  and  across  certain  streets  of 
New  London  for  such  transmission  of  electricity.  The  common 
council  denied  the  application,  on  the  ground  that  they  "did 
not  consider  it  safe  to  grant  the  petition  unless  the  wires  are 
placed  under  ground."  The  street-railway  company  appealed 
to  a  judge  of  the  Superior  Court,  asking  that  the  order  of  the 
common  council  be  revoked,  and  said  judge,  upon  hearing, 
revoked  said  order.  The  city  of  New  London  appealed  to  the 
Supreme  Court  of  Errors,  claiming,  first,  that  the  common 
council  had  power  to  make  the  order  complained  of,  and  second, 
that  the  Superior  Court,  or  a  judge  thereof  in  chambers,  could 
not  entertain  an  application  for  determining  such  question  of 
power  before  the  subject-matter  of  the  order  had  been  passed 
upon  by  the  railroad  commissioners.  It  was  held  that  the  trial 
judge  had  power  to  entertain  the  company's  application  in 
order  to  determine  the  judicial  question  as  to  the  nature  and 
extent  of  the  power  of  the  common  council,  but  that  he  erred 
in  holding  that  the  common  council  had  no  power  to  make  the 
order  complained  of.''-  Under  an  Indiana  decision  where  it  is 
evident  from  a  State  statute  that  it  was  not  the  legislative 
purpose  to  make  an  order  of  a  railroad  commission  conclusive 
in  any  given  case  when  seasonably  attacked,  yet  where  the 
commission    proceeds    upon    complaint    and    notice    with   an 

42  New  York,  New  Haven  &  Hartford  Co.'s  Appeal,  80  Conn.  623,  70  Atl. 
26.    Compare  Spencer's  Appeal,  78  Conn.  301. 

236 


CORPORATION    SUl'EKVIWOKY    (COMMISSIONS,    ETC.        §  139 

opportunity  to  a  railroad  company  to  be  heard,  the  presumption 
in  favor  of  the  validity  of  an  order  made  by  the  commission  for 
a  track  connection  is  strong  and  a  clear  case  must  be  made  out 
to  justify  the  overthrow  of  its  action.  And  while,  whatever 
the  commission  does  in  the  way  of  ordering  the  construction  of 
an  interchange  track,  must,  from  the  relation  of  the  carriers' 
to  interstate  commerce,  be  held  to  inure  to  the  benefit  of  such 
commerce,  yet  such  an  order  so  made,  must  be  considered  in 
the  light  of  a  railroad  commission  statute  providing  that  "it 
shall  apply  only  to  the  transportation  of  passengers  and  prop- 
erty within  this  State  and  to  the  receiving,  switching,  deliver- 
ing, storing  and  handling  such  property."  The  proper  con- 
struction of  such  order  is  a  State  and  not  a  Federal  question.'*^ 
In  Louisiana  the  Supreme  Court  does  not  act  as  a  supervisory 
or  administrative  board,  but  only  as  a  judicial  body  in  taking 
cognizance  of  and  adjudicating  disputed  matters  between  the 
railroad  commission  and  State  railroads. ^^  Under  a  Minnesota 
case,  if  it  is  charged  that  a  common  carrier  has  refused  or 
neglected  to  comply  with  a  lawful  order  of  the  railroad  or 
warehouse  commission  the  manner  in  which  notice  of  a  hearing 
thereof  shall  be  given  may  be  directed  by  the  courts;  and  a 
statute  so  providing  is  not  contrary  to  the  State  Constitution 
prohibiting  the  delegation  of  legislative  powers  to  the  judiciary .^^ 
Again,  where  an  act  of  the  Minnesota  legislature  establishing 
a  railroad  and  warehouse  commission  as  interpreted  by  the 
Supreme  Court  of  the  State  provides  that  the  rates  of  charges 
for  the  transportation  of  property,  recommended  and  published 
by  the  commission,  shall  be  final  and  conclusive  as  to  what  are 
reasonable  and  equal  charges,  and  that  there  can  be  no  judicial 
inquiry  as  to  the  reasonableness  of  such  rates,  and  a  railroad 
company,  in  answer  to  an  application  for  a  mandamus,  contends 
that  such  rates  are  unreasonable,  but  is  not  allowed  by  the 

<3  Pittsburgh,  Cincinnati,  Chicago  &  St.  Louis  Ry.  Co.  v.  Hunt  (Ind.,  1908), 
86  N.  E.  328. 

**  Morgan's  Louisiana  &  Texas  Rd.  &  Steamship  Co.  v.  Railroad  Com- 
mission, 109  La.  247,  33  So.  214. 

'!'  State,  Railroad  &  Warehouse  Commission  v.  Adams  Express  Co.,  66 
Minn.  271,  68  N.  W.  1085,  38  L.  R.  A.  225. 

237 


§  140  JURISDICTION    OF   COURTS    OVER 

State  Court  to  i)iiL  in  testhnony  on  that  question,  such  act  is 
in  con  diet  with  the  Constitution  of  the  United  States,  in  that  it 
deprives  the  com[)any  of  its  property  without  due  process  of 
law,  and  depriv(\s  it  of  the  equal  protection  of  the  laws.'"^ 
A  statutory  provision  of  the  same  State  empowering  the  courts 
to  direct  the  manner  of  service  of  notice  upon  a  common  carrier, 
when  proceeded  against  by  a  railroad  and  warehouse  commission 
authorized  to  call  upon  such  carrier  for  information  absolutely 
essential  for  the  proper  conduct  of  the  carrier  and  the  protection 
of  the  public,  does  not  constitute  a  delegation  of  legislative 
power  to  the  judiciary .^^ 

§  140.  Same  Subject. 

In  Mississippi  the  State  Courts  are  the  absolute  interpreters 
of  State  statutes  creating  a  board  of  railroad  commissioners 
and  specifying  the  extent  of  their  powers,  and  also  regulating 
and  controlling  railroad  routes  and  matters  of  consolidation 
of  connecting  lines.'**  The  railroad  commission  of  that  State  is 
not  a  court,  but  a  mere  administrative  agency  of  the  State;  and 
the  prohibitions  of  §  720,  Revised  Statutes,  against  injunctions 
from  United  States  Courts  to  stay  proceedings  in  State  Courts 
are  not  applicable  thereto;  and  even  though  the  commission 
might,  under  the  State  law,  resort  to  the  State  Courts  to  aid  it 
in  enforcing  its  orders  the  proceedings  cannot  be  regarded  as 
one  in  the  State  Courts  within  the  meaning  of  §  720,  Revised 
Statutes  .^« 

Again,  a  decree  of  a  court  of  that  State,  requiring  a  railroad 
company  which  does  an  interstate  business  to  construct  its 
lines  within  the  State  in  accordance  with  the  provisions  of  its 
charter  and  the  directions  of  the  State  railroad  commission  is 

46  Chicago,  M.  &  St.  Paul  Ry.  Co.  v.  Minnesota,  134  U.  S.  418,  33  L.  ed. 
970,  10  Sup.  Ct.  462. 

■*7  State  ex  rel.  Railroad  &  Warehouse  Commission  v.  Adams  Express  Co., 
66  Minn.  271,  273,  38  L.  R.  A.  225,  68  N.  W.  1085,  per  Collins,  J. 

48  Mobile,  Jackson  &  Kansas  City  Rd.  Co.  v.  Mississippi,  210  U.  S.  187, 
52  L.  ed.  1016,  28  Sup.  Ct.  6.50,  aff'g  89  Miss.  724. 

49  Mississippi  Railroad  Commission  v.  Illinois  Central  Rd.  Co.,  203  U.  S. 
335,  51  L.  ed.  209,  27  Sup.  Ct.  90,  aff'g  138  Fed.  327,  and  citing  Western 
Union  Telg.  Co.  v.  Mississippi  Railroad  Commission,  74  Miss.  80,  21  So.  15. 

238 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.        §  140 

not  an  interference  with  int(>rstate  commerce  because  coni- 
pliance  therewith  entails  expense  or  requires  the  exercise  of  emi- 
nent domain.^"  The  North  Carolina  Corporation  Conmiission 
has  no  power  to  enforce  its  orders  and  decrees  by  final  process 
issuing  directly  therefrom,  and  for  such  purposes  resort  must 
be  had  to  ordinary  courts,  either  by  independent  proceedings 
or  in  proper  instances  by  process  issued  in  cases  carried  before 
such  courts  on  appeal.  Therefore,  when  on  complaint  made  by 
a  consignee  of  goods  investigation  was  had  and  award  made 
that  a  rule  of  the  commission  had  been  violated  by  the  railway 
and  that  a  penalty  provided  by  such  rule  should  be  paid,  and 
further  that  the  rules  of  the  corporation  commission  made  for 
protection  of  shippers  in  such  cases  should  be  observed  and 
obeyed,  no  appeal  lies  from  such  ruling,  as  the  statute  and 
rules  themselves  already  require  obedience,  and  consequently 
no  right  or  interest  of  the  parties  was  in  any  way  affected. 
Unless  given  in  express  terms  an  appeal  will  only  lie  from  orders 
and  rulings  of  the  corporation  commission  of  North  Carolina 
when  such  orders  affect  some  right  or  interest  of  the  parties  to 
the  controversy.^^  Under  a  decision  in  that  State,  even  though 
the  railroad  commission  is  a  court  of  record,  inferior  to  the 
Supreme  Court,  in  the  purview  of  the  Constitution,  with  powers 
inherent  in  all  courts,  as  to  punish  for  contempt,  etc.,  it  is 
properly  an  administrative  body.  It  can  issue  no  execution 
upon  the  fines  and  penalties  laid  by  it,  but  these  must  be 
collected  by  action  in  the  Superior  Court.  All  its  orders  and 
regulations  are  merely  the  basis  of  judicial  action  in  the  Superior 
Court  to  enforce  them  and  punish  their  violation,  and  until 
there  has  been  an  official  adjudication  of  the  validity  of  its 
action  in  any  particular  case,  there  can  be  no  appeal  to  the 
Supreme  Court,  whose  jurisdiction,  except  in  the  case  of  claims 
against  the  State,  is  appellate  and  the  State  statute  authoriz- 
ing an  appeal  from  the  commission  direct  to  the  Supreme  Court, 

50  Mobile,  Jackson  &  Kansas  City  R.  Co.  v.  Mississippi,  210  U.  S.  187, 
28  Sup.  Ct.  650,  52  L.  ed.  1016,  aff' g  89  Miss.  724. 

"  Hardware  Co.  v.  Railroad  (State  ex  rel.  North  Carolina  Corp.  Comm. 
&  Hart- Ward  Hardware  Co.  v.  Southern  Ry.  Co.),  147  N.  C.  483. 

239 


§  141  JURISDICTION    OF   COURTS    OVER 

where  no  exception  is  made  to  the  facts  as  found  by  the  com- 
mission, is  in  conflict  with  the  State  Constitution  which  gives 
the  Supreme  Court  appellate  jurisdiction  only  except  of  claims 
against  the  State .'^^  It  is  also  held  in  the  same  State  that  the 
act  creating  the  railroad  commission  is  unconstitutional  in 
providing  for  direct  appeal  to  the  Supreme  Court  from  the 
commission  as  the  appeal  must  in  conformity  with  such  con- 
stitutional provision  be  first  taken  to  the  Superior  Court;'^^ 
Again,  in  that  State  a  statute  which  gives  authority  to  a  rail- 
road commission  to  prescribe  rules  and  regulations  for  the 
government  of  railroads,  and  provides  that  upon  failure  of  any 
railroad  company  to  make  full  and  ample  recompense  for  the 
violation  of  such  rules  and  regulations,  the  commission  should 
be  entitled  to  proceed  in  the  courts,  after  notice,  to  enforce  the 
penalties  to  be  prescribed  therein  for  such  violation,  is  valid 
without  providing  in  detail  the  methods  of  procedure .^^ 

§  141.  Same  Subject. 

Under  an  Oklahoma  decision  on  appeal  from  an  order  of  the 
State  Corporation  Commission,  the  presumption  obtains,  by 
reason  of  the  Constitution,^^  that  the  order  is  reasonable,  just, 
and  correct,  and  he  who  complains  on  appeal  of  such  order  has 
upon  him  the  burden  of  establishing  the  unreasonableness, 

52  Pate  (State  ex  rel.  Board  of  Rd.  Comm'rs)  v.  Wilmington  &  Weldon 
Rd.Co.,  122N.C.  877,  29S.E.334, 11  Am.  &  Eng.  R.  Cas.  (N.S.)671  (a  case 
of  a  petition  filed  by  certain  citizens  with  the  railroad  commission  for  an 
order  that  defendant  be  required  to  establish  a  railroad  station,  with  freight, 
express  and  telegraph  offices  at  a  specified  place,  which  petition  was  dismissed 
on  the  ground  of  want  of  authority)  citing  Caldwell  (State  ex  rel.  Caldwell)  v. 
Wilson,  121  N.  C.  425,  28  S.  E.  554,  61  Am.  St.  Rep.  G72;  Leavell  v.  Western 
Union  Teleg.  Co.,  116  N.  C.  211,  21  S.  E.  391;  Railroad  Commissioners  (State 
ex  rel.  Rd.  Comm'rs.)  v.  Western  Union  Teleg.  Co.,  113  N.  C.  213, 18  S.  E.  389; 
Mayo  V.  Western  Union  Teleg.  Co.,  112  N.  C.  343,  16  S.  E.  1006;  Express  Co. 
(.\tlantic  Express  Co.)  v.  Wilmington  &  Weldon  Rd.  Co.,  Ill  N.  C.  463,  16 
S.  E.  393. 

53  State  Railroad  Commission  v.  Wibnington,  122  N.  C.  877,  29  S.  E.  334, 

II  Am.  &  Eng.  R.  Cas.  (N.  S.)  671,  N.  C.  Const.,  Art.  4,  §  12. 

54  Express  Co.  (Atlantic  Express  Co,)  v.  Wilmington  &  Weldon  Rd.  Co., 

III  N.  C.  463. 

55  Section  22,  Art.  9. 

240 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.       §  141 

unjustncss,  or  incorrectness  of  such  order,  which  he  may  do  by 
showing  that  the  unreasonableness  of  the  order  appears  afhrm- 
atively  from  the  facts  as  certified  by  the  commission,  or  that  it 
is  shown  by  evidence  in  the  record,  upon  which  the  commission 
failed  to  make  findings  of  fact,  or  upon  which  the  commission 
erroneously  found  the  facts.*^^  Under  a  Texas  decision  where 
the  railroad  commission  has  adopted  rules  or  regulations  and 
a  suit  is  instituted  to  test  such  decision  of  the  commission, 
the  ordinary  rules  of  procedure  prevail  upon  the  question 
whether  or  not  they  are  just  and  reasonable,  and  the  complain- 
ant is  not  obligated  to  show  that  property  is  taken  without  due 
process  of  law  and  without  proper  compensation."  Under  a  Vir- 
ginia decision,  proceedings  before  the  railroad  commissioner'^* 
and  his  inability  to  have  the  cause  of  complaint  corrected  are 
conditions  precedent  to  the  exercise  by  the  Circuit  Courts  of  the 
jurisdiction  conferred  on;  them  by  said  act.     But  when  the 

56  Syllabus  in  Missouri,  Kansas  &  Texas  Ry.  Co.  v.  State  (Okla.,  1909),  103 
Pac.  613.  The  court  per  Hays,  J.  (at  p.  615),  said :  "  The  Constitution  requires 
the  commission  to  certify,  on  appeal  from  any  of  its  orders,  the  facts  and 
reasons  upon  which  the  commission  bases  its  order.  Such  requirement  is 
made  for  the  purpose  of  furnishing  this  court  an  aid  in  determining  whether 
the  order  made  is  reasonable  and  just;  and,  while  all  acts  of  the  commission 
are  to  be  regarded  as  'prima  facie  just,  reasonable,  and  correct,  its  findings  of 
fact  and  reason  assigned  for  the  making  of  an  order,  or  refusal  to  make  any 
order,  are  not  conclusive  upon  this  court,  and,  where  there  are  no  findings 
of  fact  by  the  commission  affirmatively  showing  that  an  order  made  is 
unreasonable  and  unjust,  in  the  absence  of  any  statute  or  rule  of  this  court 
prescribing  the  procedure  before  the  commission  and  on  appeal  here,  we 
think  the  court  should  consider,  not  only  the  facts  found  by  the  commission, 
but  also  all  the  evidence  in  the  record  which  fairly  tends  to  support  the 
action  of  the  commission.  The  Constitution  clothes  the  order  of  the  com- 
mission with  the  presumption  that  it  is  'prima  facie,  reasonable,  just,  and 
correct,  §  22,  art.  9,  of  the  Constitution  (§  235,  Bunn's  ed.).  On  appeal  the 
burden  is  upon  appellant  to  overcome  this  presumption.  This  it  may  do  by 
showing  that  the  facts  found  affirmatively  show  the  order  to  be  unreason- 
able and  unjust,  or  that  there  is  evidence  in  the  record  upon  which  the  com- 
mission has  made  no  finding,  or  upon  which  it  has  incorrectly  made  findings 
of  fact  which  show  that  such  order  is  unreasonable  and  unjust." 

"  Raib-oad  Commission  v.  Houston  &  Texas  C.  R.  Co.,  90  Tex.  340,  33 
S.  W.  750.  See  Railroad  Commission  v.  Weld  (Tex.  Civ.  App.),  66  S.  W.  122, 
1095. 

68  Under  act  of  March  3,  1892  (acts  1891-92,  p.  965). 

16  241 


§  141  JURISDICTION   OF   COURTS   OVER 

jurisdiction  of  such  courts  is  properly  invoked,  they  hear  the 
cause  de  novo,  and  when  the  complaint  is  that  two  railroads 
companies  fail  to  make  proper  connections,  both  companies 
must  be  made  parties  defendant  by  the  commonwealth  in  order 
that  the  court  may  adjust  all  matters  or  cause  of  comjjlaint. 
The  fact  that  one  of  the  companies  is  willing  to  adopt  the 
suggestion  of  the  commissioner,  and  to  obey  his  directions,  does 
not  dispense  with  the  necessity  of  making  such  company  a 
party  to  the  proceedings  in  the  Circuit  Court .^''  And  in  the 
same  State  an  order  of  a  Circuit  Court,^''  requiring  common 
carriers  to  make  specified  changes  in  their  schedules  so  as  to 
effect  a  given  connection,  should  provide  that  they  may  there- 
after agree  upon  a  new  schedule  not  in  violation  of  law,  and 
that,  in  the  absence  of  such  new  schedule,  either  party  may, 
after  reasonable  notice  to  the  other  and  to  the  attorney  for  the 
commonwealth  of  the  county  in  which  the  suit  is  pending, 
apply  to  the  court,  or  to  the  judge  in  vacation,  for  any  modi- 
fication in  its  order  that  may  be  shown  to  be  proper.^^  In 
Wisconsin  unless  an  order  of  the  railroad  commission  is  unlaw- 
ful or  unreasonable  it  will  not  be  disturbed  .^^  Under  a  Federal 
decision  the  power  to  regulate  the  operation  of  railroads  includes 
regulation  of  the  schedule  for  running  trains;  such  power  is 
legislative  in  character,  and  the  legislature  itself  may  exercise 
it  or  may  delegate  its  execution  in  detail  to  an  administrative 
body,  and  where  the  legislature  has  so  delegated  such  regulation 
the  power  of  regulation  cannot  be  exercised  by  the  courts.  So 
where  the  legislature  of  Hawaii  has  vested  by  statute  the 
regulation  of  a  railway  company  thereby  incorporated  in 
certain  administrative  officers,  it  is  beyond  the  power  of  the 
courts  to  independently  regulate  the  schedule  of  running  cars 
by  decree  in  a  suit;  and  this  is  so  held  without  deciding  as  to 

69  Southern  Ry.  Co.  v.  Commonwealth,  98  Va.  758,  2  Va.  Sup.  Ct.  620,  37 
S.  E.  294. 

60  Proceeding  under  the  act  of  March  3,  1892,  acts  1891-92. 

61  Southern  Ry.  Co.  v.  Commonwealth,  98  Va.  758,  2  Va.  Sup.  Ct.  620,  37 
S.  E.  294. 

62  State  ex  rel.  Northern  Pac.  Ry.  Co.  v.  Railroad  Commission  (Wis.,  1909), 
121  N.  W.  919. 

242 


CORPORATION    SUPERVI.SUUY    COAIMIS.SIONS,    ETC.       §  142 

the  power  of  the  courts  to  review  the  action  of  the  administra- 
tive officers  c;harged  by  the  legislature  with  establishing 
regulations.  In  this  case  the  question  was  whether  the  courts 
of  the  Territory  of  Hawaii  had  jurisdiction  to  issue  an  injunction 
to  prevent  the  running  of  street  railway  cars  at  intervals  of 
time  less  than  that  of  an  existing  schedule,  on  the  ground  that 
public  convenience  required  the  continuance  of  the  existing 
schedule,  in  other  words,  whether  the  court  had  power  to  control 
and  regulate  the  operations  of  the  company .^^  The  English 
High  Court  of  Justice  has  no  original  jurisdiction  over  matter 
within  the  railway  commissioners'  jurisdiction,  but  can  only 
enforce  orders  made  by  the  latter  under  the  Regulation  of 
Railways  Act.*''*  And  where  railway  commissioners  sit  in  lieu 
of  arbitrators  under  the  provisions  of  said  Regulation  of  Rail- 
ways Act,''^  they  exercise  a  jurisdiction  not  depending  on  the 
parties'  consent,  and  an  appeal  lies  to  the  Superior  Court  on 
questions  of  law.^® 

§  142.  Jurisdiction  of  Courts — Railroad  Commissioners — 
Public  Service  Commission — Certificate  of  Public  Conven- 
ience and  Necessity. 

In  New  York  the  determination  of  the  board  of  railroad  com- 
missioners of  that  State  whether  or  not  a  certificate  should  be 
issued  that  public  convenience  and  necessity  require  the  con- 
struction of  a  proposed  railroad,  does  not  constitute  a  subject 

03  Honolulu  Rapid  Transit  &  Land  Co.,  211  U.  S.  282,  53  L.  ed.  186,  29 
Sup.  Ct.  55,  rev'g  18  Hawaii,  553;  §§  833-871,  chap.  66  of  Rev.  Laws  of 
Hawaii.  Examine  Atlantic  Coast  Line  Rd.  Co.  v.  North  Carolina  Corporation 
Commission,  206  U.  S.  1,  51  L.  ed.  33,  27  Sup.  Ct.  585. 

M  Chatterly  Iron  Co.  v.  North  Staffordshire  Ry.  Co.  (1878),  3  Ry.  &  Can. 
Cas.  238;  act  of  1873,  §  26. 

65  Act  of  1873,  §  8. 

ee  Northeastern  Ry.  Co.  v.  North  British  Ry.  Co.  (1897),  10  Ry.  &  Can. 
Traffic  Cas.  82.  Appeal  under  Railway  and  Traffic  Act,  1888,  §  17.  So  held 
by  the  Court  of  Session. 

As  to  appeal  from  commissioners  to  Superior  Court  of  Appeal  under  Rail- 
way and  Traffic  Act  of  1888,  §  17,  being  applicable  under  English  Telegraph 
Acts,  quocre.  Postmaster  Gen'l  v.  Corporation  of  Glasgow,  10  Ry.  &  Can. 
Cas.  238. 

243 


§  142  JURISDICTION   OF  COURTS   OVER 

for  judicial  revision .^^  The  determination  vi  a  l^oard  of  rail- 
road commissioners  under  the  railroad  law  of  New  York  ^^  that 
public  convenience  and  necessity  require  the  construction  of  a 
railroad,  is  not  effective  to  confer  any  corporate  rights  upon 
the  applicant  until  the  certificate  embodying  the  decision  is 
filed  in  the  office  of  the  Secretary  of  State,  and  it  is  only  then 
that  the  statute  of  limitations  begins  to  run  as  to  the  right 
to  review  the  determination  of  the  board.  Said  commissioners 
in  acting  under  the  above  statute*'  proceed  judicially  and  are 
required  to  determine,  at  the  outset,  whether  a  corporation 
applying  for  a  certificate  is  one  de  jure,  by  reason  of  a  com- 
pliance with  what  the  statute  commands  as  essential  to  due 
incorporation.  If  the  ten  per  cent  of  the  minimum  amount  of 
capital  stock  has  not  been  subscribed,  nor  paid  in  good  faith 
and  in  cash,  there  has  been  no  legal  incorporation,  and  that 
question  the  board  must  determine.  When  no  cash  appears 
to  have  been  paid  in  or  received  by  the  railroad  company  or  by 
anyone  for  it,  in  compliance  with  the  railroad  law,^°  which 
requires  an  affidavit  that  ten  per  cent  of  the  capital  stock  has 
been  paid  in  good  faith  and  in  cash,  the  Appellate  Division  of 
the  Supreme  Court  of  New  York  may  review  the  determination 
of  the  railroad  commission  upon  that  question  and  find  that  the 
affidavit  was  false,  and,  for  that  purpose,  where  the  return 
includes  the  proceedings  and  testimony,  that  court  may  look 
into  the  evidence,  and  if  it  finds  that  it  fails  to  support  the 
determination  of  the  board,  may  annul  such  determination. 
Such  decision  cannot  be  reviewed  by  the  Court  of  Appeals.^^ 
In  another  case  in  the  same  State  it  is  held  that  where,  after 
the  former  board  of  railroad  commissioners  issued  to  a -railroad 
a  certificate  of  pubhc  convenience  and  necessity  and  denied  a 

67  People  V.  Board  of  Railroad  Comm'rs,  175  N.  Y.  516,  67  N.  E.  1088,  aff'g 
81  N.  Y.  Supp.  20,  81  A.  D.  242. 

88  Railroad  Law,  §  59  (Laws  1890,  chap.  565,  as  am'd). 

69  Under  §  59  thereof. 

'"  Sfction  2  of  Railroad  Law. 

71  People  ex  rel.  New  York  Central  &  Hudson  River  Rd.  Co.  v.  Public 
Service  Commission,  195  N.  Y.  157,  88  N.  E.  261,  aff'g  106  N.  Y.  Supp.  968, 
122  App.  Div.  283. 

244 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.        §  142 

subsequent  application  by  another  railroad  for  a  similar  certifi- 
cate, the  second  petitioner  contends  that  its  application  should 
have  been  granted  owing  to  the  fact  that  since  the  prior  de- 
termination conditions  have  materially  changed  in  the  locality, 
the  Appellate  Division  in  its  discretion  may  remit  the  matter 
to  the  Public  Service  Commission  for  investigation  and  deter- 
mination. It  is  a  question  as  to  whether  the  Supreme  Court 
has  power  to  order  the  Public  Service  Commission  to  issue  a 
certificate  of  public  convenience  and  necessity.  But  assuming 
that  the  court  possesses  that  power,  it  has  also  power  to  remit 
the  matter  for  a  rehearing  to  the  body  possessing  original  juris- 
diction; and  the  power  of  the  Supreme  Court  to  review  a 
determination  of  the  former  board  of  railroad  commissioners 
or  its  successor,  the  present  Public  Service  Commission,  has 
been  exercised  for  so  long  a  time  that  it  is  not  an  open  ques- 
tion.^' On  review  of  the  determination  of  the  State  railroad 
commission  not  to  issue  a  certificate  of  convenience  and  neces- 
sity for  the  construction  of  a  belt  line  for  freight  around  a  city 
connecting  different  railroads,  affidavits  were  presented  show- 
ing that  since  the  hearing  before  the  commission  one  railroad 
is  constructing  a  switching  yard  of  great  capacity  and  laying 
an  additional  track  along  its  passenger  belt  line  which  would 
soon  be  available  for  interchanging  freight  among  the  various 

"Buffalo  Frontier  Terminal  Ry.  Co.,  Matter  of,  131  App.  Div.  503,  115 
N.  Y.  Supp. 483. 

The  Supreme  Court  of  New  York  on  review  of  proceedings  on  an  appli- 
cation for  the  issuance  of  a  certificate  of  public  convenience  and  necessity  for 
a  railroad,  having  power  to  direct  the  Public  Service  Commission  to  issue  the 
certificate,  may  also  remit  the  matter  for  a  rehearing  to  that  body;  and  the 
power  to  remit  a  case  for  any  purpose  must  carrj'  with  it  the  authority  to 
determine  in  what  manner  and  for  what  purpose  the  submission  is  made. 
Syllabus  in  Buffalo  Frontier  Terminal  Rd.  Co.,  In  re,  115  N.  Y.  Supp.  483. 

"  It  is  urged  with  much  earnestness  that  the  determination  of  the  Board 
of  Railroad  Commissioners  is  an  administrative  and  not  a  judicial  act,  and 
this  court  has  no  power  to  review  its  decision.  The  power  has  been  exercised 
for  so  long  a  time  that  it  is  not  an  open  question,  and  we  deem  it  unnecessary 
to  enter  into  any  discussion  on  the  subject."  Buffalo  Frontier  Terminal  Co., 
In  re,  1 15  N.  Y.  Supp.  483,  489,  per  Spring,  J.  In  this  case  the  determination 
of  the  Board  of  Railroad  Commissioners  was  set  aside  and  a  rehearing  ordered 
before  the  Public  Service  Commission;  McLennan,  P.  J.,  dissented. 

245 


§  142  JURISDICTION   OF  COURTS   OVER 

railroad  lines,  and  that  other  improvements  by  new  lines  are 
under  way  tending  to  obviate  the  necessity  for  new  proposed 
lines.  It  also  appeared  that  a  rival  company  was  granted  a 
certificate  which,  except  for  objection  which  induced  a  reversal 
as  to  its  certificate  on  certiorari,  might  be  equally  well  equipped 
and  located  to  satisfy  the  necessity,  if  it  has  since  eliminated 
the  objections,  and  might  be  entitled  to  the  certificate.  It  was 
held  that,  notwithstanding  the  evidence  before  the  railroad 
commission  entitled  petitioner  to  a  certificate,  the  case  would  be 
remanded  to  the  Public  Service  Commission,  its  successor,'^ 
for  a  rehearing  on  present  conditions.'^ 

73  Under  Laws  1907,  p.  937,  chap.  429. 

74  Syllabus  in  Buffalo  Frontier  Terminal  Rd.  Co.,  In  re,  115  N.  Y.  Supp. 
483,  131  App.  Div.  503. 

"  We  do  not  deem  it  necessary  to  determine  the  question  of  the  power  of 
this  court  to  order  the  Public  Service  Commission  to  issue  a  certificate  of 
necessity  to  the  petitioner.  As  bearing  upon  this  subject,  see,  however, 
Village  of  Ft.  Edward  v.  Hudson  Valley  Rd.  Co.,  192  N.  Y.  139,  84  N.  E. 
962;  Matter  of  Wood,  181  N.  Y.  93,  73  N.  E.  561;  Matter  of  Rochester, 
Corning  &  Elmira  Traction  Co.,  102  N.  Y.  Supp.  1112,  118  App.  Div.  521; 
§  85,  Public  Service  Commissions  Law  (Laws  1907,  p.  937,  c.  429),  §  59  of 
Railroad  Laws  (Laws  1895,  p.  317,  c.  545).  Passing  the  question  of  power, 
we  think  such  an  order  would  be  an  unwise  exercise  of  discretion  in  view  of 
the  conditions  existing.  One  rival  company  has  already  applied  to  that  body 
for  such  certificate,  and,  if  granted,  it  might  render  permission  to  the  peti- 
tioner improper  or  unnecessary.  The  Board  of  Railroad  Commissioners, 
believing  a  certificate  should  be  granted,  issued  it  to  another  competing 
company.  The  affidavits  tend  to  show  that  conditions  affecting  the  operation 
of  railroads  and  the  transportation  of  freight  have  materially  changed  since 
the  determination  made  more  than  two  years  ago.  It  is  a  matter  of  current 
knowledge  that  the  Public  Service  Commission  of  the  second  district  has 
been  devoting  much  time  to  the  consideration  of  the  many  problems  con- 
nected with  the  operation  of  the  railroads  in  and  about  the  city  of  Buffalo. 
It  has  the  opportunity  of  frequent  inspection  of  conditions  prevailing,  and  is 
especially  equipped  for  the  solution  of  questions  involving  railroad  con- 
struction and  operation.  We  have  no  doubt  as  to  the  power  of  this  court  to 
relegate  this  matter  to  that  body  for  investigation  and  determination.  The 
petitioner  asks  that  this  court  direct  the  commission  to  issue  the  certificate. 
Assuming  that  can  be  done,  the  power  must  also  be  lodged  in  this  court  to 
remit  the  matter  for  a  rehearing  to  the  body  possessing  original  jurisdiction. 
The  mode  in  which  this  court  transfers  the  proceeding  to  the  commission, 
and  what  directions  it  may  make,  relate  wholly  to  the  procedure.  The 
power  to  remit  for  any  purpose  must  carry  witli  it  the  authority  to  determine 
in  what  manner  and  for  what  purpose  the  submission  is  made.    In  People 

246 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.       §  143 

§  143.  Jurisdiction  of  Courts  Over  Rate  Regulations 
— Generally. 

While  rates  for  the  transportation  of  persons  and  property 
within  the  limits  of  a  State  are  primarily  for  its  determination/^ 
and  while  it  is  not  for  the  courts  to  go  into  the  reasonableness 
of  established  water  rates  but  resort  must  first  be  had  to  the 
body  designated  by  law  to  fix  proper  rates/^  nevertheless,  the 
question  whether  they  are  so  unreasonably  low  as  to  deprive 
the  carrier  of  its  property  without  such  compensation  as  the 
Constitution  secures,  and,  therefore,  without  due  process  of 
law,  cannot  be  so  conclusively  determined  by  the  legislature 
of  a  State,  or  by  regulations  adopted  under  its  authority  that 
the  matter  may  not  become  the  subject  of  judicial  inquiry.^' 
And  in  order  to  determine  whether  the  rates  as  fixed  furnish 
at  least  some  compensation  as  a  return  for  the  services  rendered 
or  property  used  the  courts  may  review  the  question  of  rates 
where  they  are  not  fixed  by  appropriate  judicial  proceedings 
wherein  an  opportunity  to  appear  and  defend  has  been  afforded 
by  proper  notice,  and  this  applies  irrespective  of  whether  the 
rates  are  fixed  by  legislative  power  or  otherwise  than  as  above 
stated .'^^  Again,  courts  have  the  power  to  inquire  whether  a 
body  of  rates  prescribed  by  a  legislature  is  unjust  and  unrea- 
sonable and  such  as  to  work  a  practical  destruction  of  rights  of 

ex  rel.  Bath  &  Hammondsport  Railroad  Company  v.  Public  Service  Com- 
mission et  al.,  the  appellate  division  annulled  the  determination  of  the  Board 
of  Railroad  Commissioners  (127  App.  Div.  480,  112  N.  Y.  Supp.  133),  and 
this  decision  was  affirmed  in  the  Court  of  Appeals,  not  yet  reported.  Upon 
application  that  court  modified  its  order,  '  so  as  to  award  a  rehearing  before 
the  Public  Service  Commission, '  although  the  determination  reversed  the 
ruling  which  was  made  by  its  predecessor,  the  Railroad  Commission." 
Buffalo  Frontier  Terminal  R.  Co.,  In  re,  115  N.  Y.  Supp.  483,  489,  131  App. 
Div.  503,  510,  per  Spring,  J. 

75  Smyth  v.  Ames,  169  U.  S.  466,  18  Sup.  Ct.  418,  42  L.  ed.  819,  30  Chicago 
L.  News,  243,  171  U.  S.  361,  43  L.  ed.  197,  18  Sup.  Ct.  888. 

78  Osborne  v.  San  Diego  Land  &  Town  Co.,  178  U.  S.  22,  20  Sup.  Ct.  860, 
44  L.  ed.  961. 

"  Smyth  V.  Ames,  169  U.  S.  466,  18  Sup.  Ct.  418,  42  L.  ed.  819,  30  Chicago 
L.  News,  243,  171  U.  S.  361,  43  L.  ed.  197,  18  Sup.  Ct.  888. 

78  San  Diego  Water  Co.  v.  San  Diego,  118  Cal.  556,  50  Pac.  633,  38  L.  R. 
A.  460. 

247 


§  144  JURISDICTION    OF   COURTS    OVER 

property,  and  if  found  to  bo  so  to  restrain  its  operation,  because 
such  legislation  is  not  due  process  of  law.  This  applies  to  a 
statute  regulating  the  rates  to  be  charged  by  a  corporation 
controlling  a  public  highway;  and  where  a  ■prima  facie  case 
exists  invalidating  such  enactment,  and  if  a  defense  arises 
under  an  act  of  Congress  or  under  the  Constitution,  the  ques- 
tion whether  the  plea  or  answer  sufficiently  sets  forth  such  a 
defense  is  a  question  of  Federal  law,  the  determination  of  which 
cannot  be  controlled  by  the  judgment  of  the  State  Court /^ 

§  144.  Same  Subject. 

When  a  State  legislature  establishes  a  tariff  of  railroad  rates 
so  unreasonable  as  to  practically  destroy  the  value  of  the 
property  of  companies  engaged  in  the  carrying  business,  the 
Federal  Courts  may  treat  it  as  a  judicial  question  and  hold  such 
legislation  to  be  in  conflict  wuth  the  Constitution  of  the  United 
States,  as  depriving  the  company  of  its  property  without  due 
process  of  law,  and  as  depriving  it  of  the  equal  protection  of 
the  laws.*"  And  although  the  determination  of  whether  a  rail- 
way rate  prescribed  by  a  State  statute  is  so  low  as  to  be  con- 
fiscatory involves  a  question  of  fact,  its  solution  raises  a  Federal 
question,  and  the  sufficiency  of  rates  is  a  judicial  question  over 
which  the  proper  Circuit  Court  has  jurisdiction,  as  one  arising 
under  the  Constitution  of  the  United  States.  And  whether  a 
State  railroad  rate  statute,  although  on  its  face  relating  only 
to  intrastate  rates,  is  an  interference  with  interstate  commerce 
also  raises  a  Federal  question  which  cannot  be  considered 
frivolous.^i     It  is  held,  however,  that  no  general  supervisory 

78  Covington  &  Lexington  Turnpike  R.  Co.  v.  Sandford,  164  U.  S.  578,  41 
L.  ed.  560,  17  Sup.  Ct.  198. 

80  St.  Louis  &  San  Francisco  Ry.  Co.  v.  Gill,  156  U.  S.  649,  15  Sup.  Ct.  484, 
39  L.  ed.  567. 

81  Young,  ex  Parte,  209  U.  S.  123,  52  L.  ed.  714,  28  Sup.  Ct.  441,  citing 
Chicago,  Mihvauliee  &  St.  Paul  Ry.  Co.  v.  Tompkins,  176  U.  S.  167,  172,  44 
L.  ed.  417,  20  Sup.  Ct.  336;  Smyth  v.  Ames,  169  U.  S.  466,  522,  18  Sup.  Ct. 
418,  42  L.  ed.  818;  Covington  &  Lexington  Turnpike  R.  Co.  v.  Sandford, 
164  U.  S.  578,  17  Sup.  Ct.  198,  41  L.  ed.  560;  St.  Louis  &  S.  F.  Ry.  Co.  v.  Gill, 
156  U.  S.  649,  15  Sup.  Ct.  484,  39  L.  ed.  569;  Reagan  v.  Farmers'  Loan  & 
T.  Co.,  154  U.  S.  362,  38  L.  ed.  1014,  14  Sup.Ct.  1047 ;  Chicago,  M.  &  St.  P.  R. 

248 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.        §  145 

jurisdiction  is  vested  in  tlic;  courts  in  respect  to  freight  and 
passenger  rates.*'  But  the  power  is  vested  in  the  courts  to 
ultimately  determine  in  respect  to  discriminating  rates  the 
(juestions  of  right  and  justice  as  between  the  parties.®^ 

§  145.  Legislative  and  Judicial  Functions  as  to  Rate 
Regulation  — Distinctions. 

There  is  a  distinction  between  the  power  to  prescribe  a  tariff 
for  rates  and  charges  and  the  power  to  determine  whether 
existing  and  prescribed  rates  and  charges  are  unjust  or 
unreasonable;  the  former  is  a  legislative  the  latter  a  judicial 
function.  The  courts  cannot  prescribe  or  fix  a  schedule  of 
rates  and  charges  for  public  or  quasi-public  service,  or  deter- 
mine whether  one  rate  is  preferable  to  another;  their  jurisdic- 
tion is  to  construe  or  apply  the  law  or  regulation  after  it  is 
made,  or  to  determine  its  constitutionality  or  prevent  its  en- 
forcement, nor  can  the  legislature  place  its  own  enactments 
beyond  the  constitutional  jurisdiction  of  the  courts,  nor  fore- 
stall their  judgments  by  prescribing  such  a  tariff  or  schedule 
as  to  preclude  an  inquiry  into  their  reasonableness,  or  as  to 
the  constitutionality  of  the  legislative  enactment.*^  So  a  duty 
which  is  not  a  judicial  but  a  legislative  or  administrative  one, 
such  as  fixing  railroad  transportation  rates,  cannot  be  forced 
upon  the  judiciary  contrary  to  the  State  Constitution.*^  A 
court  may  conduct  a  judicial  investigation  in  aid  of  a  legis- 
lative regulation  as  to  rates  to  be  paid  for  water  and  determine 
the  reasonableness  thereof  and  what  rates  are  reasonable  with 
regard  at  least  to  existing  rights  and  grievances;  and  a  statute 
providing  for  a  petition  by  selectmen  of  a  town  or  any  persons 
feeling  themselves  aggrieved,  to  the  supreme  judicial  court,  to 

Co.  V.  Minnesota,  134  U.  S.  418,  33  L.  ed.  970,  10  Sup.Ct.  462,  702;  Hastings 
V.  Eames  (U.  S.  C.  C.  A.),  68  Fed.  726. 

s2  Raritan  River  R.  Co.  v.  Middlesex  &  S.  Traction  Co.,  70  N.  J.  L.  732, 
58  Atl.  332. 

^  Interstate  Commerce  Commission  v.  East  Tennessee  V.  &  G.  Ry.  Co., 
85  Fed.  107. 

8*  Western  Union  Teleg.  Co.  v.  Myatt  (U.  S.  C.  C),  98  Fed.  335. 

»5  Steenerson  v.  Great  Northern  R.  Co.,  69  Minn.  353,  72  N.  W.  713,  8  Am. 
&  Eng.  R.  Cas.  (N.  S.)  559. 

249 


§  146  JURISDICTION   OF   COURTS   OVER 

fix  the  rates  and  authorizing  two  or  more  judges  of  said  court 
to  establish  maximum  rates  was  held  constitutional.*^ 

§  146.  Equity  Jurisdiction — Railroad,  etc.,  Rates — Obli- 
gation of  Contracts — Injunction — Discrimination. 

A  court  of  equity  has  no  power  to  establish  raih'oad  rates." 
But  in  view  of  the  continuous  confusion,  risks  and  multiplicity 
of  suits,  which  would  result  from,  and  the  public  interests  and 
vast  number  of  peoj^le  which  would  be  affected  by,  the  en- 
forcement of  an  ordinance  reducing  the  rates  of  fare  of  street 
railways,  which  ordinance  the  companies  claim  is  unconstitu- 
tional as  impairing  the  obligation  of  the  contracts  resulting 
from  the  ordinances  granting  the  franchises,  a  court  of  equity 
has  jurisdiction  of  an  action  to  enjoin  the  enforcement  of  the 
ordinance,  especially  when  the  ordinance  affects  only  a  part  of 
the  system  and  would  engender  the  enforcement  of  two  rates 
of  fare  over  the  same  line  leading  to  dangerous  consequences. 
The  passage  by  the  municipality  of  an  ordinance  affecting 
franchises  already  granted  under  prior  ordinances  amounts  to 
an  assertion  that  the  legislative  authority  vested  in  it  to  pass 
the  original  ordinance  gave  it  the  continued  power  to  pass 
subsequent  ordinances,  and  it  cannot  assail  the  jurisdiction  of 
the  Circuit  Court  on  the  ground  that  its  action  in  impairing 
the  contracts  which  resulted  from  prior  ordinances  was  not  an 
action  by  authority  of  the  State.  In  this  case  it  was  held  that 
the  consolidated  ordinance  of  February,  1885,  of  the  city  of 
Cleveland,  and  ordinances  thereafter  passed  by  the  munici- 
pality and  accepted  by  the  companies,  constituted  such  bind- 
ing contracts  in  respect  to  the  rate  of  fare  to  be  exacted  upon 
the  consolidated  and  extended  lines  of  the  railroad  companies 
as  to  deprive  the  city  of  its  right  to  exercise  the  reservations  in 
the  original  ordinances  as  to  changing  the  rates  of  fare;  and 
the  ordinance  of  October  17,  1898,  reducing  the  rate  of  fare  to 
be  charged,  was  void  and  unconstitutional  within  the  impair- 

86  Janvrin,  Petitioner,  174  Mass.  514,  55  N.  E.  381,  47  L.  R.  A.  319. 

87  Reagan  v.  Farmers'  Loan  &  Trust  Co.,  154  U.  S.  362,  413,  420,  38  L.  ed. 
1014,  14  Sup.  Ct.  1047,  followed  in  s.  c,  154  U.  S.  420,  38  L.  ed.  1031,  14 
Sup.  Ct.  1002. 

250 


CORPORATION   SUPERVISORY    COMMISSIONS,    ETC.       §  147 

ment  clause  of  the  Constitution  of  the  United  States. ****  If 
citizens  of  different  States  are  affected  by  a  claimed  illegal 
reduction  of  freight  rates  the  jurisdiction  of  a  Federal  court  of 
equity  over  the  question  is  not  taken  away  by  the  act  of  the 
legislature  of  one  of  the  States  in  fixing  such  rates  instead  of 
authorizing  a  commission  so  to  do.^^  A  public  service  corpora- 
tion may  be  prevented  from  discrimination  in  the  matter  of 
rates,  and  equity  has  jurisdiction  of  such  corporation  to  require 
it  to  furnish  its  services  at  reasonable  and  uniform  rates  to  all 
citizens  alike.^" 

§  147.  Extent  of  Judicial  Interference  as  to  Rate  Regula- 
tions. 

It  is  asserted  that  the  extent  of  judicial  interference  is  pro- 
tection against  unreasonable  rates.''^  And  the  rule  declared 
by  the  Federal  Supreme  Court  is  that  although  rates  when  fixed 
by  legislative  authority  for  public  service  corporations  should 
allow  a  fair  return  upon  the  reasonable  value  of  the  property 
at  the  time  it  is  being  used,  still  the  statute  will  not  be  declared 
invalid  by  the  courts  unless  the  rates  are  so  unreasonably  low 
that  their  enforcement  would  amount  to  the  taking  of  property 
for  public  use  without  compensation.^^  So  while  courts  may 
refuse  to  enforce  legislation  on  constitutional  grounds  the 
power  or  jurisdiction  invoked  should  be  exercised  only  in  the 
clearest  cases,  and  where  a  public  service  corporation  refuses 
to  observe  an  ordinance  fixing  in  detail  the  maximum  water 
rates  to  be  charged  by  the  company,  and  prefers  to  go  into 

88  Cleveland  v.  Cleveland  City  Ry.  Co.,  194  U.  S.  517,  48  L.  ed.  102,  24 
Sup.  Ct.  756,  followed  in  Cleveland  v.  Cleveland  Electric  Ry.  Co.,  194  U.  S. 
5:58,  48  L.  ed.  1109,  24  Sup.  Ct.  764. 

89  Ames  V.  Union  Pac.  R.  Co.  (U.  S.  C.  C),  64  Fed.  165,  4  Inters.  Comm. 
Rep.  835. 

90  Wright  V.  Glen  Telephone  Co.,  95  N.  Y.  Supp.  101,  48  Misc.  192,  aff'g 
99  N.  Y.  Supp.  S5. 

91  Chicago  &  Grand  Trunk  Ry.  Co.  v.  Wellman,  143  U.  S.  339,  35  L.  ed. 
1035,  12  Sup.  Ct.  250. 

92  Willcox  V.  Consolidated  Gas  Co.,  212  U.  S.  19,  53  L.  ed.  382,  29  Sup.  Ct. 
392,  citing  San  Diego  Land  &  Town  Co.  Cases,  174  U.  S.  839,  43  L.  ed.  1154, 
19  Sup.  Ct.  257,  s.  c,  189  U.  S.  439,  47  L.  ed.  892,  23  Sup.  Ct.  571. 

251 


§§  148,  149  JURISDICTION   OF   COURTS   OVER 

court  with  a  claim  that  the  ordinance  is  unconstitutional,  it 
must,  where  such  enactment  has  been  held  otherwise  valid, 
be  prepared  to  show  to  the  court's  satisfaction  that  the  ordi- 
nance would  necessarily  be  so  confiscatory  in  its  effect  as  to 
violate  the  Federal  Constitution.^^  Again,  the  judiciary  ought 
not  to  interfere  with  the  collection  of  rates,  for  the  use  of  water, 
established  under  legislative  sanction,  unless  they  are  so  plainly 
and  palpably  unreasonable  as  to  make  their  enforcement 
equivalent  to  the  taking  of  property  for  public  use  without 
such  compensation  as  under  the  circumstances  is  just  both  to 
the  owner  and  the  public.^^ 

§  148.  Jurisdiction  of  Courts  Before  Rate  Legislation 
Goes  Into  Effect. 

Except  in  very  clear  cases  courts  should  not  interfere  with 
State  rate  legislation  before  the  legislation  goes  into  effect.®^ 
So  the  making  of  a  rate  by  a  legislative  body,  after  hearing 
the  interested  parties,  is  not  res  judicata  upon  the  validity  of 
the  rate  when  questioned  by  those  parties  in  a  suit  in  a  court. 
Litigation  does  not  arise  until  after  legislation ;  nor  can  a  State 
make  such  legislative  action  res  judicata  in  subsequent  litiga- 
tion.^^ 

§  149.  Jurisdiction  of  Courts  in  Respect  to  Railroad 
Commissions — Rates. 

If  a  State  railroad  commission  attempts  to  enforce  unrea- 
sonable rates  its  power  is  not  so  purely  legislative  in  its  nature 
as  to  preclude  its  being  amenable  to  the  court.*^^    So  a  citizen 

93  Knoxville,  City  of,  v.  Knoxville  Water  Co.,  212  U.  S.  1,  29  Sup.  Ct. 
148,  53  L.  ed.  371,  cited  in  Willcox  v.  Consolidated  Gas  Co.,  212  U.  S.  19,  41. 

94  San  Diego  Land  &  Town  Co.  v.  National  City,  174  U.  S.  739,  43  L.  ed. 
154,  191  Sup.  Ct.  804,  aff'g  74  Fed.  79. 

95  Willcox  V.  Consolidated  Gas  Co.,  212  U.  S.  19,  53  L.  ed.  382,  29  Sup.  Ct. 
392. 

98  Prentis  v.  Atlantic  Coast  Line  Co.,  211  U.  S.  210,  29  Sup.  Ct.  G7,  53  L. 
ed.  150. 

9?  Southern  Pac.  Co.  v.  Board  of  Railroad  Commissioners  (U.  S.  C.  C), 
78  Fed.  236. 

"  Jurisdiction  is  given  to  the  Circuit  Court  in  suits  involving  the  requisite 
amount,  arising  under  the  Constitution  or  laws  of  the  United  States  (1  U.  S. 

252 


CORPORATION    SUPERVISORY   COMMISSIONS,    ETC.        §  149 

of  another  State  who  feels  himself  aggrieved  and  injured  by 
the  rates  prescribed  by  a  raih-oad  commission  may  seek  his 
remedy  in  equity  against  the  coniniissionors  in  the  Circuit 
Court  of  the  United  States  in  the  State,  and  the  Circuit  Court 
has  jurisdiction  over  such  a  suit  under  the  statutes  regulating 
its  general  jurisdiction,  with  the  assent  of  the  State,  expressed 
in  the  act,  creating  the  commission;  and  it  is  within  the  power 
of  a  court  of  equity  in  such  case  to  decree  that  the  rates  so 
established  by  the  commission  are  unreasonable  and  unjust,  and 
to  restrain  their  enforcement;  but  it  is  not  within  its  })ower  to 
establish  rates  itself,  or  to  restrain  the  commission  from  again 
establishing  rates.^^  To  the  same  effect  is  another  decision 
wherein  it  is  held  in  almost  the  same  language  that  it  is  not 
only  within  the  power  but  it  is  also  the  duty  of  the  courts  to 
inquire  whether  rates  prescribed  by  a  State  railroad  commis- 
sion are  unjust  and  unreasonable,  such  as  to  constitute  an 
unconstitutional  invasion  of  property  rights,  and,  if  so,  to 
enjoin  their  enforcement;  but  they  are  not  authorized  to  revise 
or  change  a  body  of  rates,  which  is  a  legislative  or  adminis- 
trative, rather  than  a  judicial  function.^^  Though  the  making 
of  carriers'  rates  is  a  legislative  and  not  a  judicial  act,  within 
the  jurisdiction  of  the  courts,  and  courts  cannot  make  rates  on 

Comp.  St.,  p.  508)  and  the  question  really  to  be  determined  under  this 
objection  is  whether  the  acts  of  the  legislature  and  the  orders  of  the  railroad 
commission,  if  enforced,  would  take  property  without  due  process  of  law, 
and  although  that  question  might  incidentally  involve  a  question  of  facts 
its  solution  nevertheless  is  one  which  raises  a  Federal  question.  See  Hasting, 
V.  Ames  (C.  C.  A.,  8th  Circuit),  68  Fed.  Rep.  726.  The  sufficiency  of  rates 
with  reference  to  the  Federal  Constitution  is  a  judicial  question,  and  one 
over  which  Federal  Courts  have  jurisdiction  by  reason  of  its  Federal  nature. 
Chicago,  etc.,  R.  R.  Co.  v.  Minnesota,  134  U.  S.  418,  33  L.  ed.  970,  10  Sup.  Ct. 
462,  702;  Regan  v.  Farmers',  etc.,  Co.,  154  U.  S.  369,  399,  38  L.  ed.  1014,  14 
Sup.  Ct.  1047;  St.  Louis,  etc.,  Co.  v.  Gill,  156  U.  S.  649,  39  L.  ed.  567;  Coving- 
ton, etc..  Turnpike  Road  Company  v.  Sandford,  164  U.  S.  578,  41  L.  ed.  560, 
17  Sup.  Ct.  198;  Smyth  v.  Ames,  169  U.  S.  466,  522;  Chicago,  etc.,  Co.  v. 
Tompkins,  176  U.  S.  167,  44  L.  ed.  417,  20  Sup.  Ct.  336. 

9s  Reagan  v.  Farmers'  Loan  &  Trust  Co.,  154  U.  S.  362,  38  L.  ed.  1014,  14 
Sup.  Ct.  1047,  followed  Id.,  154  U.  S.  420,  38  L.  ed.  1031,  14  Sup.  Ct.  1062. 

«*  Syllabus  in  Trammell  v.  Dinsmore,  102  Fed.  794,  42  C.  C.  A.  623; 
Dinsmore  v.  Soutliern  Exp.  Co.  &  Georgia  Rd.  Commission,  Id.,  aff'd  183 
U.  S.  115,  46  L.  ed.  HI,  22  Sup.  Ct.  45. 

253 


§  150  JURISDICTION    OF   COURTS   OVER 

a  final  hearing,  a  court,  for  the  purpose  of  requiring  complain- 
ant, who  has  obtained  a  preliminary  injunction  against  alleged 
confiscatory  rates,  to  do  equity,  and  prevent  the  imposition  of 
extortionate  rates  for  carriage,  may  fix,  maximum  rates  beyond 
which  complainant  shall  not  go  during  the  pendency  of  the 
litigation,  and  make  the  compliance  with  such  maximum  rates 
a  condition  on  which  the  temporary  injunction  will  be  con- 
tinued.^ 

§  150.  Same  Subject. 

Equity  has  jurisdiction,  however,  on  the  ground  of  prevent- 
ing a  multiplicity  of  suits,  to  restrain  a  State  board  of  railroad 
commissioners  from  enforcing  a  schedule  of  rates  advertised 
to  be  put  in  force  on  a  certain  day;  and  a  preliminary  injunction 
should  be  granted  where  the  probable  effect  of  such  threatened 
enforcement  of  the  schedule  of  rates  would  be  that  dividends 
from  the  operation  of  the  roads  affected  would  be  destroyed, 
especially  where  a  person  injured  by  overcharges  would,  under 
the  statute,  be  entitled  to  recover  treble  damages.'  Under  a 
decision  rendered  in  1899  in  the  Federal  Supreme  Court  it 
appeared  that:  The  State  of  South  Dakota  having  passed  an 
act  providing  for  the  appointment  of  a  board  of  railroad  com- 
missioners, and  authorizing  that  board  to  make  a  schedule  of 
reasonable  maximum  fares  and  charges  for  the  transportation 
of  passengers,  freight  and  cars  on  the  railroads  within  the 
State,  provided  that  the  maximum  charge  for  the  carriage  of 
passengers  on  roads  of  the  standard  guage  should  not  be 
greater  than  three  cents  per  mile ;  and  that  board  having  acted 
in  accordance  with  the  statute,  and  having  published  its 
schedule  of  maximum  charges,  the  Chicago,  Milwaukee  & 
St.  Paul  Railway  Company  filed  the  bill  in  this  case  in  the 
Circuit  Court  of  the  United  States  for  the  District  of  South 
Dakota,  seeking  to  restrain  the  enforcement  of  the  schedule. 
The  railroad  commissioners  answered  fully,  and  testimony  was 

1  Syllabus  in  Arkansas  Railroad  Rates,  In  re  (U.  S.  C.  C),  168  Fed.  720. 

2  Chicago  &  Northwestern  R.  Co.  v.  Dey  (U.  S.  C.  C),  35  Fed.  866,  2 
Inters.  Com.  Rep.  325,  4  Rd.  &  Corp.  L.  J.  465,  1  L.  R.  A.  744. 

254 


COliPOIlATION    SUJ'EKVI.SORY    COMMIS.SION.S,    ETC.        §  150 

taken  before  an  examiner  upon  the  issues  made  by  tlie  plead- 
ings. This  testimony  was  reported  without  findings  of  fact 
or  conclusions  of  law.  The  case  went  to  hearing.  The  judge 
without  the  aid  of  a  master,  examined  the  pleadings  and  the 
mass  of  proof.  He  made  findings  of  fact  and  conclusions  of 
law;  delivered  an  o])inion;  and  rendered  a  decree  dismissing 
the  bill.  It  was  held  by  the  Federal  Supreme  Court:  That 
neither  the  findings  made  by  the  court,  nor  such  facts  as  were 
stated  in  its  opinion,  were  sufficient  to  warrant  a  conclusion 
upon  the  question  whether  the  rates  prescribed  by  the  defend- 
ants were  unreasonable  or  not,  and  that  the  process  by  which 
the  court  came  to  its  conclusion  was  not  one  which  could  be 
relied  upon.  That  there  was  error  in  the  failure  to  find  the 
cost  of  doing  the  local  business,  and  that  only  by  a  comparison 
between  the  gross  receipts  and  the  cost  of  doing  the  business, 
ascertaining  thus  the  net  earnings,  could  the  true  effect  of  the 
reduction  of  rates  be  determined.^  It  is  held  in  Kentucky  that 
although  a  railroad  commission  may  be  empowered  under  a 
State  Constitution  to  grant  relief  in  "special  cases"  from  the 
operation  of  such  provision  which  prohibits  a  greater  charge 
by  common  carriers  for  a  short  than  for  a  long  haul,  still  the 
refusal  of  such  commission  to  grant  the  relief  is  held  not  re- 
viewable by  the  courts.^  A  claim  for  repayment  of  excessive 
freight  charges  must  be  enforced  in  a  common-law  action;  and 
where  a  railroad  commission,  acting  without  jurisdiction  or 
power  in  the  premises,  orders  such  excessive  charges  to  be 
refunded  the  remedy  is  not  that  provided  by  the  statute  creat- 
ing the  commission  whereby  such  board  is  empowered,  in  case 
of  a  violation  of  its  lawful  orders  or  upon  refusal  or  neglect  of  a 

3  Chicago,  Milwaukee  &  St.  Paul  Ry.  Co.  v.  Tompkins,  176  U.  S.  167,  20 
Sup.  Ct.  336,  44  L.  ed.  417.  Cited  in  Minneapolis  &  St.  Louis  R.  Co.  v. 
Minnesota,  186  U.  S.  257,  262,  22  Sup.  Ct.  900,  46  L.  ed.  11.51;  Chesapeake 
&  Potomac  Teleg.  Co.  v.  Manning,  186  U.  S.  238,  250,  46  L.  ed.  1144,  22  Sup. 
Ct.  881 ;  Cotting  v.  Kansas  City  Stock  Yards  Co.,  183  U.  S.  79,  85,  22  Sup.  Ct. 
30,  46  L.  ed.  92. 

*  Louisville  &  N.  R.  Co.  v.  Commonwealth,  104  Ky.  L.  Rep.  1380,  43  L.  R. 
A.  541,  denying  rehearing,  104  Ky.  226,  46  S.  W.  707,  20  Ky.  L.  Rep.  1380, 
43  L.  R.  A.  541,  Ky.  Const.,  §  218. 

255 


§  151  JURISDICTION    OF   COURTS    OVER 

railroad  company  to  obey  the  same  to  complain  to  the  State 
Circuit  Court  in  ecjuity  and  said  court  being  thereupon  au- 
thorized to  hear  and  determine  the  matter  upon  notice  given 
the  company.^ 

§  151.  Same  Subject — Where  Resort  Must  First  Be  Had. 

A  court  of  equity  is  without  power  to  interfere  by  injunction 
to  control  in  advance  the  exercise  of  the  legislative  power, 
conferred  on  a  State  railway  commission  by  the  Constitution 
and  statutes  of  a  State,  to  fix  reasonable  and  just  rates  for  the 
transportation  of  property  within  the  State,  by  restraining 
such  commission  from  considering  or  acting  upon  the  question 
of  establishing  new  rates  on  any  given  commodities  or  from 
giving  notice  to  a  railroad  company  of  any  order  which  may 
be  adopted  establishing  such  rates.^  Under  the  Texas  statute 
a  shipper  is  not  obligated  in  case  of  excessive  freight  charges 
collected  by  a  carrier  to  apply  for  relief  to  the  railroad  com- 
mission but  may  sue  therefor  and  for  penalties  provided  7 
Where  a  State  railroad  commission,  which  is  granted  power  by 
the  State  Constitution  to  make  and  enforce  rates,  enacts  and 
attempts  to  enforce  rates  which  are  so  low  as  to  be  confiscatory, 
the  proper  remedy  is  by  a  bill  in  equity  to  enjoin  such  enforce- 
ment, but  such  a  suit  should  not  be  commenced  until  the  rate 
has  been  fixed  by  the  body  having  the  last  word.*  It  is  likewise 
determined  that  a  State  railroad  commissioner  may  be  en- 
joined from  proceeding  to  fix  rates  under  a  State  statute.  But 
although  under  a  State  statute  the  duty  of  enforcing  the  rates 
it  may  fix  is  vested  in  a  railroad  commission  yet  the  rates 

5  Oregon  Rd.  Comm'rs  v.  Oregon  Rd.  &  Nav.  Co.,  17  Oreg.  65,  19  Pac.  702, 
2  L.  R.  A.  195. 

6  Syllabus  in  Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  Winnett  (U.  S.  C. 
C.  A.),  162  Fed.  242.  Compare  Macon  Grocery  Co.  v.  Atlantic  Coast  Line 
Rd.  Co.  (U.  S.  C.  C),  163  Fed.  738. 

^  Texas  &  New  Orleans  Rd.  Co.  v.  Sabine  Tram  Co.  (Tex.  Civ.  App.,  1909), 
121  S.  W.  256,  Rev.  Stat.,  1895,  Art.  568,  provides  that  persons  "may"  ap- 
ply to  commission,  and  Art.  4575  authorizes  suit  for  damages  and  penalties 
in  such  cases. 

«  Prentis  v.  Atlantic  Coast  Line  Co.,  211  U.  S.  210,  29  Sup.  Ct.  67,  53  L. 
ed.  150. 

256 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.    §§  152,  153 

must  be  fixed  before  alleged  consequences,  such  as  threatened 
multiplicity  of  suits,  and  irreparable  injury  as  grounds  for 
equity  jurisdiction  and  an  injunction,  can  be  availed  of." 

§  152.  Same  Subject— Appeal  to  State  Supreme  Court 
Before  Suing  in  Federal  Circuit  Court. 

While  a  party  does  not  lose  his  right  to  complain  of  action 
under  an  unconstitutional  law  by  not  using  diligence  to  prevent 
its  enactment,  on  a  qu(^stion  of  railroad  rat(^s,  when  an  appeal 
to  the  Supreme  Court  of  the  State  from  an  order  of  the  State 
Corporation  Commission  fixing  such  rates  is  given  by  the  State 
Constitution,  it  is  proper  that  dissatisfied  railroads  should  take 
the  matter  to  the  Supreme  Court  of  their  State,  before  bringing 
a  bill  in  the  Circuit  Court  of  the  United  States,  and  where  the 
circumstances  of  the  case  justify  it  action  on  such  a  bill  will  be 
suspended  to  await  the  result  of  such  an  appeal.^" 

§  153.  Jurisdiction  of  Courts  in  Respect  to  Railroad 
Commissions — Rates — When  Constitutional  Question  Not 
Decided. 

Where  a  bill,  brought  by  a  railroad  company  in  the  Federal 
Circuit  Court  to  enjoin  the  enforcement  of  an  order  by  a  State 
railroad  commission  providing  maximum  rates  on  transporta- 
tion of  all  commodities  upon  a  railroad  to  and  from  all  points 
within  a  State,  not  only  alleges  that  the  statute  creating  the 
commission,  but  also  the  order  of  the  commission  sought  to  be 
enjoined,  deprives  complainant  of  its  property  without  due 
process  of  law,  and  also  violates  other  provisions  of  the  Con- 
stitution, the  Circuit  Court  obtains  jurisdiction  without  refer- 
ence to  the  particular  violation  of  the  Fourteenth  Amendment. 
The  rule  of  the  Fedei'al  Sui)reme  Court  is,  not  to  decide  con- 
stitutional questions  if  the  case  can  be  decided  without  doing 
so;  and  when  it  can  dispose  of  the  case  by  construction  of  the 

9  McChord  v.  Louisville  &  N.  R.  Co.,  LSD  U.  S.  483,  22  Sup.  Ct.  165,  46  L. 
ed.  289,  rev'g  103  Fed.  216. 

10  Prentis  v.  Atlantic  Coast  Line  Co.,  211  U.  S.  210,  29  Sup.  Ct.  67,  53  L. 
ed.  150. 

17  257 


§  154  JURISDICTION    OF   COURTS   OVIOR 

statute  and  on  the  lack  of  authority  given  by  such  statute  to 
make  the  order  complainetl  of,  it  will  do  so  rather  than  on  the 
constitutional  questions  involved,  and  even  though  the  highest 
court  of  the  State  has  not  construed  the  statute  involved  the 
Federal  Supreme  Court  must,  in  a  case  of  which  it  has  juris- 
diction, construe  it.^^ 

§  154.  Public  Service  Commission— Right  to  Appeal  — 
Certiorari — Nature  of  Powers. 

The  Public  Service  Commission  of  New  York  is  entitled  to 
prosecute  an  ai^peal  from  an  order  of  the  Appellate  Division  of 
the  Supreme  Court  which  annulled  its  determination  denying 
an  application  of  a  railroad  company  for  permission  to  con- 
struct and  operate  an  extension  of  its  road.  The  commission 
having  determined  that  the  ])ublic  interest  required  the  con- 
struction and  operation  of  a  laihoad  upon  the  route  over  which 
the  relator  had  acquired  a  franchise,  recommended,  however, 
that  the  permission  and  approval  of  the  commission  be  with- 
held because  of  the  limitations  imposed  by  the  municipal 
authorities  of  the  city  of  New  York  upon  the  franchise  con- 
tract. It  was  held,  that  so  far  as  the  consent  of  the  municipal 
authorities  to  the  construction  of  the  proposed  line  may  be 
limited  by  conditions  which  are  in  conflict  with  the  {provisions 
of  the  Public  Service  Commissions  Law,  the  statute  must  pre- 
vail and  the  Public  Service  Commission  was  without  authority 
to  refuse  to  the  relator  the  certificate  provided  for  in  §  53  of 
said  Public  Service  Commissions  Law.''    It  is  held  in  New  York 

11  Siler  V.  Louisville  &  Nashville  Rd.  Co.,  213  U.  S.  175,  58  L.  ed.  753,  29 
Sup.  Ct.  451.  A  case  of  construction  of  Kentucky  Railroad  Commission  Law, 
distinguishing  Barney  v.  City  of  New  York,  193  U.  S.  430,  48  L.  ed.  737,  24 
Sup.  Ct.  502. 

12  People  ex  rcl.  South  Shore  Traction  Co.  v.  Willcox,  196  N.  Y.  212, 
aff'g  133  App.  Div.  556.  The  syllabus  to  the  report  of  this  case  in  the  New 
York  Supplement  reads  as  follows:  The  Public  Service  Commission  is  bound 
to  approve  the  building  of  a  street  railroad  as  provided  by  Public  Service 
Commission  Law,  Laws  1907,  p.  920,  chap.  429,  §  5:>,  in  all  cases  where  the 
local  authorities  have  granted  the  consent  provided  for  by  the  Constitution, 
Art.  3,  §  18,  as  supplemented  by  the  Railroad  Law  (Laws  1890,  p.  IIOS, 
chap.  565),  as  amended  by  the  Laws  of  1907,  p.  203,  chap.  156,  §§  1,  91,  and 

258 


CURPOKATION    SUrEKVlSOKY    COMMISSIONS,    ETC.        §  1.54 

that  a  dctcnniiiation  of  the  Public  Service  Coniiiiissioii  estab- 
lishing a  joint  fare  for  passengers  on  two  connecting  inde- 
pendent stn^et  railroad  corporations  and  ap[)ortioning  such 
fare  between  them  is  quasi-judicial  in  its  nature,  and  reviewable 
by  the  connnon-law  writ  of  certiorari;  and  a  motion  to  cjuash 
or  modify  a  writ  of  certiorari  to  review  the  determination  of 
an  inferior  tribunal  may  be  made  in  the  Appellate  Division  of 
the  New  York  Supreme  Court  .^^ 

the  commission  has  determined,  as  the  statute  provides,  that  the  proposed 
construction  is  '"necessary  and  convenient  for  the  pubhc  service,"  though 
it  does  not  approve  the  terms  imposed  by  the  local  authorities.  People  v. 
Willcox,  118  N.  Y.  Supp.  248,  133  App.  Div.  556. 

13  People  ex  rel.  Joline  v.  Willcox,  113  N.  Y.  Supp.  861,  129  App.  Div. 
267.  The  court,  per  Patterson,  P.  J.,  at  pp.  862  etseq.  of  Supp.  and  pp.  268 
et  seq.  of  App.  Div.,  said:  "It  is  not  claimed  by  the  moving  party  that  the 
action  by  the  Public  Service  Commission  in  making  orders  now  brought  to 
our  attention  is  beyond  some  power  of  review  by  the  courts,  but  it  is  insisted 
that  such  review  may  only  be  had  in  independent  proceedings,  either  by  way 
of  injunction  to  restrain  the  commission  from  enforcing  the  order  or  by 
defense  to  an  application  made  by  the  commissioners  to  compel  compliance 
with  it  by  mandamus  or  by  defense  to  an  action  of  law  to  enforce  a  penalty 
for  a  violation  of  it  and  thus  to  bring  before  the  court  upon  new  evidence  all 
questions  that  might  arise  and  could  be  litigated  respecting  the  validity  and 
enforceability  of  the  order  objected  to.  The  question,  therefore,  now  before 
the  court,  is  whether  a  writ  of  certiorari  may  be  issued  to  review  the  action 
of  the  commission  in  making  the  order  complained  of,  or  must  the  relators  be 
remitted  to  some  other  remedy.  In  the  act  of  the  legislature  constituting 
the  Public  Service  Commission  (Laws  1907,  p.  889,  chap.  429)  there  is  no 
specific  method  pointed  out  by  which  the  action  of  that  commission  can  be 
l:)rought  within  the  judicial  cognizance  of  the  courts  of  the  State.  There  is 
no  express  provision  made  either  for  a  review  of  the  proceedings  or  for  an 
appeal  from  its  orders.  The  writ  of  certiorari  is  regulated  as  to  its  allowance 
and  proceedings  thereunder,  by  the  Code  of  Civil  Procedure,  which  provides 
for  what  may  be  called  certain  statutory  writs,  but  which  also  preserves  the 
common-law  writ.  Unquestionably  the  common-law  writ  can  only  be  issued 
for  the  purpose  of  reviewing  acts  either  judicial  or  quasi-judicial  in  their 
nature,  and  official  acts  that  are  purely  executive,  legislative,  administrative 
or  ministerial  in  their  character  are  not  subject  to  review  by  such  writ;  it  is 
scarcely  worth  while  to  cite  authorities  to  so  elementary  a  proposition. 
The  inquiry,  therefore,  now  is  whether  the  acts  of  the  Public  Service  Com- 
mission in  the  proceedings  which  led  up  to  and  eventuated  in  making  the 
orders  now  sought  to  be  reviewed  are  purely  and  exclusively  executive, 
legislative,  administrative  or  ministerial,  or  are  judicial  or  quasi -judicial. 
In  making  the  ordprnow  sought  to  he  reviewed  the  Public  Service  Commission 
acted  under  tlie  authority  of  a  provision  of  §  49  of  the  act  instituting  the 

259 


§  155  JURISDICTION    OF   COURTS    OVER 

§  155.  Jurisdiction    of    Courts — Suit    Against    Railroad 
Commissioners,  etc. — Whether  Suit  Against  State. 

Where  a  State  railroad  commission,  which  is  granted  power 

commission  (chap.  429,  p.  917,  Laws  1907;)  which  in  part  reads  as  follows 
'  The  commission  shall  have  power  by.  order  to  require  any  two  or  more 
common  carriers  or  railroad  corporations  whose  lines,  owned,  operated, 
controlled  or  leased,  from  a  continuous  line  of  transportation  or  could  be 
made  to  do  so  by  the  construction  and  maintenance  of  switch  connection,  to 
establish  through  rates  and  joint  rates,  fares  and  charges  for  the  transporta- 
tion of  passengers,  freight  and  property  within  the  State  as  the  commission 
may,  by  its  order,  designate;  and  in  case  through  routes  and  joint  rates  be 
not  established  by  the  common  carriers  or  railroad  corporations  named  in 
any  such  order  within  the  time  therein  specified,  the  commission  shall 
establish  just  and  reasonable  rates,  fares  and  charges  to  be  charged  for  such 
through  transportation,  and  declare  the  portion  thereof  to  which  each  com- 
mon carrier  or  railroad  corporation  affected  thereby  shall  be  entitled  and  the 
manner  in  which  the  same  shall  be  paid  and  secured. '  The  proceeding  was 
within  the  terms  of  the  statute.  The  commission  acted  upon  its  own  initia- 
tive, as  it  was  also  authorized  to  do.  The  procedure  was  apparently  in 
conformity  with  provisions  of  the  act  relating  to  that  subject  and  rules  and 
regulations  which  the  commission  was  authorized  to  adopt.  *  *  *  Jf 
we  were  to  have  regard  only,  on  the  present  motion,  to  what  appears  in  the 
petition  and  in  the  orders  of  the  commission,  it  would  be  evident  that  their 
inquiry  and  action  in  the  premises  was  judicial  in  its  nature  and  that  it  was 
substantially  acting  as  a  court.  It  is  true  that  it  has  been  decided  by 
courts  of  high  authority  that  the  mere  fixing  of  rates  by  a  commission  in- 
trusted with  such  power  by  law  is  legislative  in  its  character,  as  in  the  very 
recent  case  of  Prentis  v.  Atlantic  Coast  Line  Co.  (and  companion  cases 
decided  November  30,  1908),  211  U.  S.  210,  29  Sup.  Ct.  67,  53  L.  ed.  150. 
In  passing  upon  the  nature  of  the  powers  devolved  upon  the  State  Corpora- 
tion Commission  of  Virginia,  Mr.  Justice  Holmes,  writing  the  opinion  of  the 
court  in  those  cases,  remarks  that  whether  the  proceedings  are  to  regarded 
as  legislative  in  their  character  or  otherwise  does  not  depend  upon  the  domi- 
nant character  of  the  body  in  which  they  may  take  place,  but  upon  the 
character  of  the  proceedings  themselves.  But  looking  beyond  what  is 
disclosed  by  the  papers  now  before  the  court,  and  examining  the  act  itself 
by  which  the  Public  Service  Commission  is  established  and  its  powers  con- 
ferred, and  having  regard  to  the  decisions  of  the  courts  in  this  State  appli- 
cable to  the  subject,  the  conclusion  seems  to  be  necessary  that  the  proceed- 
ings and  order,  the  subject  of  the  present  inquiry,  are  judicial  in  their 
nature.  *  *  *  n  appears  to  us  that  the  power  granted  to  and  exer- 
cised by  the  Public  Service  Commission  in  the  matter  now  under  consider- 
ation mcludes  very  much  more  than  what  may  be  called  a  mere  legislative 
act  of  fixing  rates.  There  is  involved  the  compulsion  of  two  lines  of  railway 
to  operate  their  roads  jointly,  and  there  is  the  judicial  or  quasi-judicial  act 
of  ascertaining  and  determining  a  proportionate  share  of  a  joint  rate  to  be 
allowed  to  each  operating  company.    In  such  a  proceeding  there  seems  to  us 

260 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.       §  155 

by  the  State  Constitution  to  make  and  enforce  rates,  enacts 
and  attempts  to  enforce  rates  which  are  so  low  as  to  be  con- 
fiscatory, the  proper  remedy  is  by  bill  in  equity  to  enjoin  such 
that  there  necessarily  arises  a  controversy — one  to  be  determined  by  judicial 
methods,  dependent  upon  evidence  and  the  establishment  of  facts.  The 
commission  is  clothed  with  the  power  which  formerly  resided  in  the  rail- 
road commission  of  the  State  and  the  gas  committee,  and  acts  of  a  character 
kindred  to  tliose  now  the  subject  of  consideration  have  been  regarded  as 
judicial  in  their  nature,  as  for  instance  in  the  case  of  People  ex  rel.  Loughran 
V.  Railroad  Commissioners,  158  N.  Y.  421,  53  N.  E.  163,  where  it  was  held 
that  the  State  Board  of  Railroad  Commissioners,  in  consenting,  under  the 
power  conferred  upon  them  by  the  railroad  law,  to  the  discontinuance  of  a 
station  on  a  line  of  railway,  was  not  an  act  merely  of  administration,  but  it 
was  judicial  in  its  character  and  might  be  reviewed  by  the  common-law  writ 
of  certiorari.  In  that  case  no  right  of  review  was  given  expressly  by  the 
statute;  but  the  court  remarked  that  a  common-law  writ  of  certiorari,  might 
be  issued  to  review  the  determination  of  inferior  tribunals  and  officers  acting 
under  the  authority  of  a  statute  to  correct  errors  of  law  affecting  the  property 
or  rights  of  the  parties,  and  that  in  consenting  to  a  discontinuance  of  the 
station  the  Board  of  Railroad  Commissioners  acted  judicially,  citing  as 
authority  People  v.  New  York,  Lake  Erie  &  Western  Rd.  Co.,  104  N.  Y.  58, 
9  N.  E.  85G,  58  Am.  Rep.  484.  The  acts  of  the  commission  were  judicial 
because  the  law  impliedly  required  it  to  decide  a  question  of  fact,  and  also 
required  tlieir  judgment  upon  evidence  determining  whether  the  consent 
should  be  given  or  not.  The  question  was  between  the  public  patronizing 
the  station  and  the  inconvenience  to  the  railroad  company  in  maintaining 
it  and  stopping  its  trains  thereat.  In  People  ex  rel.  Einton  v.  Brooklyn 
Heights  Rd.  Co.,  172  N.  Y.  90,  64  N.  E.  788,  which  was  a  case  relating  to  the 
discontinuance  of  continuous  train  service,  the  Board  of  Railroad  Commission- 
ers was  authorized  to  determine  whether  the  mode  of  operating  the  road 
and  conducting  its  business  was  reasonable  and  expedient;  and  the  court  of 
appeals  held  that  the  action  of  the  commission  was  reviewable  by  certiorari, 
and  that  the  duty  of  examining  the  facts  rested  upon  the  appellate  division. 
In  the  case  of  Stewart  v.  Railroad  Commissioners,  160  N.  Y.  202,  54  N.  E. 
697,  the  question  was  whether  certain  duties  devolving  upon  the  railroad 
commission  were  administrative  and  not  judicial.  That  was  a  case  which 
involved  the  issuance  of  a  certificate  of  public  necessity  for  the  construction 
of  a  railroad,  a  matter  which  is  very  closely  akin  to  that  of  a  joint  rate.  In 
that  case  it  was  argued  with  great  persistence  that  the  statute  conferred  upon 
the  railroad  commissioners  a  duty  which  was  administrative  anti  which  the 
courts  had  no  power  to  review.  In  its  opinion  the  court  says:  '  The  issuance 
of  a  common-law  writ  of  certiorari  to  review  the  judicial  determinations  of  in- 
ferior judicial  tribunals  and  officers  acting  judicially  xmder  authority  of  stat- 
ute, to  correct  errors  of  law  affecting  property  rights  of  the  parties,  has  for  a 
long  time  formed  a  part  of  our  judicial  procedure.  Starr  v.  Trustees  of  Roch- 
ester, 6  Wend.  (N.  Y.)  564;  People  ex  rel.  Coughran  v.  Railroad  Commission- 
ers, 158  N.  Y.  421,  53  N.  E.  163,  and  cases  cited.    Counsel  has,  therefore, 

261 


§  155  JURISDICTION   OF   COURTS   OVER 

enforcement,  and  such  a  suit  against  the  members  of  the  com- 
mission will  not  be  bad  as  one  against  the  State,  but  it  should 
not  be  commenced  until  the  rate  has  been  fixed  by  the  body 

found  it  necessary  to  call  the  duty  enjoined  upon  the  railroad  commissioners 
by  §  59  of  the  railroad  law  something  else  than  a  judicial  duty,  in  order 
to  obtain  even  the  suggestion  of  a  foundation  upon  which  to  construct  an 
argument  introduced  to  convince  the  mind  that  such  a  determination  as 
this  is  not  reviewable  by  certiorari.  But  it  is  clear  that  if  the  duty  enjoined 
upon  the  Board  of  Railroad  Commissioners  by  this  section  calls  upon  them 
to  decide  some  question  of  fact  every  time  there  is  an  application  made  to 
them  for  the  issuing  of  the  certificate  authorized  by  it,  then  in  the  making 
of  that  decision  it  acts  judicially,  notwithstanding  there  may  be  closely 
interwoven  with  it  certain  administrative  or  ministerial  functions  that  must 
be  also  exercised. '  In  the  recent  and  very  instructive  case  of  Village  of 
Saratoga  Springs  v.  Saratoga  Gas,  etc.,  Co.,  191  N.  Y.  123,  S3  N.  E.  G93,  it 
was  held  in  substance,  that  while  the  fixing  of  maximum  rates  for  gas  and 
electric  light  corporations  by  a  commission,  created  by  Laws  1905,  p.  2092, 
chap.  737,  and  to  whose  powers  the  present  PubHc  Service  Commission 
succeeded  is  fixed  in  the  State  legislature,  nevertheless  the  power  is  not 
inherently  and  exclusively  legislative;  that  what  is  intrusted  to  the  com- 
mission is  the  duty  of  ascertaining  facts  and,  after  a  public  hearing,  deter- 
mining what  is  a  reasonable  maximum  rate.  As  we  understand  the  opinion 
of  the  court  in  that  case,  a  commission  authorized  by  the  legislature  to  fix 
rates  is  in  a  sense  acting  legislatively,  yet  the  procedure  by  or  through  which 
they  reach  a  result  is  in  its  nature  judicial  or  quasi-judicial.  Indeed,  it  would 
seem,  from  the  provision  of  §  59  of  the  Public  Service  Law,  that  it  was  within 
the  contemplation  of  the  legislature,  in  passing  the  act,  that  the  action  of 
the  commission  in  many  cases  might  come  before  the  courts  by  independent 
proceedings  instituted  for  a  review.  Section  59  provides  very  drastic  penal- 
ties for  violation  of  orders  of  the  commission ;  but  it  proceeds  to  say  that  in 
an  action  to  recover  a  penalty  and  forfeiture  brought  by  the  commissioners 
imder  the  act,  if  the  defendant  in  such  an  action  shall  prove  that  during  any 
portion  of  the  time  for  which  it  is  sought  to  recover  penalties  or  forfeitures 
for  a  violation  of  an  order  of  the  commission  the  defendant  was  actually 
and  in  good  faith  prosecuting  a  suit,  action,  or  proceeding  in  the  courts  to 
set  aside  such  order,  the  court  shall  remit  the  penalties  or  forfeitures  incurred 
during  the  pendency  of  such  suit,  action,  or  proceeding.  The  only  proceed- 
ing available  to  this  petitioner  would  be  that  of  certiorari,  but  that  is  not 
conclusive  of  the  subject.  We  think  that,  in  view  of  the  whole  trend  of  the 
decisions  of  the  highest  court  of  this  State  with  reference  to  the  nature  of 
proceedings  of  public  service  commission  in  such  matters  as  those  acted 
upon  in  the  case  now  before  us,  we  must  hold  that  the  commission  has  acted 
judicially  or  quasi-judicially,  and  that  the  appropriate  method  of  review  is 
by  certiorari,  and  that  hence  the  motion  to  vacate  the  writ  must  be  denied. 
Our  decision  goes  no  further  than  to  determine  that  the  particular  order  to 
which  the  petitioner  now  objects  and  the  proceedings  leading  to  its  issuance 
may  be  reviewed  by  certiorari.    All  concur." 

202 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.       §  155 

having  the  last  word.^^  A  suit  brought  by  a  railway  company 
against  the  members  of  a  State  railway  commission  to  restrain 
them  from  interfering  with  complainant's  property  and  inter- 
state business  under  a  State  statute  alleged  in  the  bill  to  be 
unconstitutional  as  imposing  burdens  on  interstate  commerce 
is  not  a  suit  against  the  State  within  the  meaning  of  the  Eleventh 
Amendment  to  the  Federal  Constitution  .^^  A  question  whether 
a  suit  nominally  against  an  individual  or  commission  by  name, 
is  in  reality  a  suit  against  the  State  within  the  Eleventh 
Amendment  to  the  Constitution,  is  a  defense  to  the  merits 
rather  than  to  the  jurisdiction  of  the  court.  Such  defense 
should  be  raised  either  by  demurrer  or  other  appropriate 
jjleadings  and  cannot  be  made  available  upon  motion  to  dis- 
miss.^*^  A  suit  by  a  telegraph  company  against  the  court  of 
visitation  and  the  State  solicitor  to  restrain  the  enforcement 
of  rates  is  not  a  suit  against  the  State."  Purchases  made  by 
State  officers  of  supplies  for  business  carried  on  by  the  State 
are  made  by  the  State,  and  suits  by  the  vendors  against  the 
State  officers  carrying  on  or  winding  up  the  business  are  suits 
against  the  State  and,  under  the  Eleventh  Amendment,  beyond 
the  jurisdiction  of  the  Federal  Courts;  and  this  applies  to  suits 
against  commissioners  to  wind  up  the  State  Liquor  Dispensary 
of  South  Carolina.^*  In  the  very  important  Young  case  ^^  it 
was  held :  that  the  Attorney  General  of  the  State  of  Minnesota, 
under  his  common-law  power  and  the  State  statutes,  has  the 
general  authority  imposed  upon  him  of  enforcing  constitutional 

i^Prentis  v.  Atlantic  Coast  Line  Co.,  211  U.  S.  210,  29  Sup.  Ct.  67,  53 
L.  ed.  150. 

15  McNeill  V.  Southern  Ry.  Co.,  202  U.  S.  543,  26  Sup.  Ct.  722,  50  L.  ed. 
1142,  citing  Fitts  v.  McGhee,  172  U.  S.  516,  529,  530,  43  L.  ed.  535,  19  Sup. 
Ct.  209;  Scott  v.  Donald,  165  U.  S.  107,  112,  41  L.  ed.  648,  17  Sup.  Ct.  262. 

16  Illinois  Central  R.  Co.  v.  Adams,  180  U.  S.  28,  45  L.  ed.  210,  21  Sup. 
Ct.  251. 

17  Western  Union  Telegraph  Co.  v.  Myatt,  98  Fed.  335. 

IS  Murray  v.  Wilson  Distilling  Co.,  213  U.  S.  151,  53  L.  ed.  742,  29  Sup. 
Ct.  687,  rev'g  161  Fed.  152,  a  case  of  action  against  commissioner  under 
winding-up  law;  action  against  State  of  South  Carolina  dispensary  law; 
Eleventh  Amendment;  commissioner  under  State  dispensary  law  to  wind 
up  its  affairs. 

18  Young,  Ex  parte,  209  U.  S.  123,  52  L.  e.l.  714,  28  Sup.  Ct.  441. 

263 


§  155  JURISDICTION   OF   COURTS   OVER 

statutes  of  the  State  and  is  a  proper  party  defendant  to  a  suit 
brought  to  prevent  the  enforcement  of  a  State  statute  on  the 
ground  of  its  unconstitutionality;  that  the  attempt  of  a  State 
officer  to  enforce  an  unconstitutional  statute  is  a  proceeding 
without  authority  of  and  docs  not  affect  the  State  in  its  sov- 
ereign or  governmental  capacity,  and  is  an  illegal  act  and  the 
officer  is  stripped  of  his  official  character  and  is  subjected  in 
his  person  to  the  consequences  of  his  individual  conduct.  The 
State  has  no  power  to  impart  to  its  officer  immunity  from 
responsibility  to  the  supreme  authority  of  the  United  States.^*^ 

20  In  this  case  the  court,  per  Mr.  Justice  Peckham,  said :  "  The  question 
of  jurisdiction,  whether  of  the  Circuit  Court  or  of  this  court,  is  frequently 
a  dehcate  matter  to  deal  with,  and  it  is  especially  so  in  this  case,  where  the 
material  and  most  important  objection  to  the  jurisdiction  of  the  Circuit 
Court  is  the  assertion  that  the  suit  is  in  effect  against  one  of  the  States  of 
the  Union.  It  is  a  question,  however,  which  we  are  called  upon,  and  which 
it  is  our  duty,  to  decide.  *  *  *  This  inquiry  necessitates  an  examina- 
tion of  the  most  material  and  important  objection  made  to  the  jurisdiction 
of  the  Circuit  Court,  the  objection  being  that  the  suit  is,  in  effect,  one  against 
the  State  of  Minnesota,  and  that  the  injunction  issued  against  the  Attorney 
General  illegally  prohibits  State  action,  either  criminal  or  civil,  to  enforce 
obedience  to  the  statutes  of  the  State.  This  objection  is  to  be  considered 
with  reference  to  the  Eleventh  and  Fourteenth  Amendments  to  the  Federal 
Constitution.  The  Eleventh  Amendment  prohibits  the  commencement  or 
prosecution  of  any  suit  against  any  one  of  the  United  States  by  citizens  of 
another  State  or  citizens  or  subjects  of  any  foreign  State.  The  Fourteenth 
Amendment  provides  that  no  State  shall  deprive  any  person  of  life,  liberty, 
or  property  without  due  process  of  law,  nor  shall  it  deny  to  any  person 
within  its  jurisdiction  the  equal  protection  of  the  laws. 

"The  case  before  the  Circuit  Court  proceeded  upon  the  theory  that  the 
orders  and  acts  heretofore  mentioned  would,  if  enforced,  violate  rights  of 
complainants  protected  by  the  latter  amendment.  We  think  that  whatever 
the  rights  of  complainants  may  be,  they  are  largely  founded  upon  that 
amendment,  but  a  decision  of  this  case  does  not  require  an  examination  or 
decision  of  the  question  whether  its  adoption  in  any  way  altered  or  limited 
the  effect  of  the  earlier  amendment.  We  may  assume  that  each  exists  in  full 
force,  and  that  we  must  give  to  the  Eleventh  Amendment  all  the  effect  it 
naturally  would  have,  without  cutting  it  down  or  rendering  its  meaning  any 
more  narrow  than  the  language,  fairly  interpreted,  would  warrant.  It  ap- 
plies to  a  suit  brought  against  a  State  by  one  of  its  own  citizens  as  well  as  to 
a  suit  brought  by  a  citizen  of  another  State.  Hans  v.  Louisiana,  134  U.  S.  1, 
33  L.  ed.  842,  10  Sup.  Ct.  504.  It  was  adopted  after  the  decision  of  this  court 
in  Chisholm  v.  Georgia  (1793),  2  Dall.  419,  where  it  was  held  that  a  State 
might  be  sued  by  a  citizen  of  another  State.  Since  that  time  there  have  been 
many  cases  decided  in  this  court  involving  the  Eleventh  Amendment,  among 

264 


CORPORATION   SUPERVISORY   COMMISSIONS,    ETC.        §  lo5 

tliem  being  Osborn  v.  United  States  Bank  (1824),  <J  Wheat.  (22  U.  S.)  738, 
846,  857,  6  L.  ed.  204,  which  held  that  the  Amendment  applied  only  to  those 
suits  in  which  the  State  was  a  party  on  the  record.  In  the  subsequent  case 
of  Governor  of  Georgia  v.  Madrazo  (1828),  1  Pet.  (26  U.  S.)  110,  122,  123, 
7  L.  ed.  73,  that  holding  was  somewhat  enlarged,  and  Chief  Justice  Marshall 
delivering  the  opinion  of  the  court,  while  citing  Osborn  v.  United  States 
Bank,  supra,  said  that  where  the  claim  was  made,  as  in  the  case  then  before 
the  court,  against  the  (Jovernor  of  Georgia  as  governor,  and  the  demand  was 
made  upon  him,  not  personally,  but  ofhcially  (for  moneys  in  the  treasury 
of  the  State  and  for  slaves  in  the  possession  of  the  State  government),  the 
State  might  be  considered  as  the  party  on  the  record  (page  123),  and  there- 
fore the  suit  could  not  be  maintained. 

"Davis  v.  Gray,  16  Wall.  (S3  U.  S.)  203,  220,  21  L.  ed.  447,  reiterates 
the  rule  of  Osborn  v.  United  States  Bank,  so  far  as  concerns  the  right  to 
enjoin  a  State  officer  from  executing  a  State  law  in  conflict  with  the  Con- 
stitution or  a  statute  of  the  United  States,  when  such  execution  will  violate 
the  rights  of  the  complainant. 

"In  Virginia  Coupon  Cases,  114  U.  S.  270,  296,  29  L.  ed.  185,  5  Sup.  Ct. 
903,  962  (Poindexter  v.  Greenhow),  it  was  adjudged  that  a  suit  against  a 
tax  collector  who  had  refused  coupons  in  payment  of  taxes,  and,  under  color 
of  a  void  law,  was  about  to  seize  and  sell  the  property  of  a  taxpayer  for 
non-payment  of  his  taxes,  was  a  suit  against  him  personally  as  a  wrongdoer 
and  not  against  the  State. 

"Hagood  V.  Southern,  117  U.  S.  52,  67,  decided  that  the  bill  was  in  sub- 
stance a  bill  for  the  specific  performance  of  a  contract  between  the  com- 
plainants and  the  State  of  South  Carolina,  and,  although  the  State  was  not 
in  name  made  a  party  defendant,  yet  being  the  actual  party  to  the  alleged 
contract  the  performance  of  which  was  sought  and  the  only  party  by  whom 
it  could  be  performed,  the  State  was,  in  effect,  a  party  to  the  suit,  and  it 
could  not  be  maintained  for  that  reason.  The  things  required  to  be  done 
by  the  actual  defendants  were  the  very  things  which  when  done  would  con- 
stitute a  performance  of  the  alleged  contract  by  the  State. 

"The  cases  upon  the  subject  were  reviewed,  and  it  was  held,  in  In  re 
Ayers,  123  U.  S.  443,  31  L.  ed.  216,  8  Sup.  Ct.  164,  that  a  bill  in  equity 
brought  against  officers  of  a  State,  who,  as  individuals,  have  no  personal 
interest  in  the  subject-matter  of  the  suit,  and  defend  only  as  representing 
the  State,  where  the  relief  prayed  for,  if  done,  would  constitute  a  perform- 
ance by  the  State  of  the  alleged  contract  of  the  State,  was  a  suit  against 
the  State  (page  504),  following  in  this  respect  Hagood  v.  Southern,  supra. 

"  A  suit  of  such  a  nature  was  simply  an  attempt  to  make  the  State  itself, 
through  its  officers,  perform  its  alleged  contract,  by  directing  those  officers 
to  do  acts  which  constituted  such  performance.  The  State  alone  had  any 
interest  in  the  question,  and  a  decree  in  favor  of  plaintiff  would  affect  the 
treasury  of  the  State. 

"On  the  other  hand,  United  States  v.  Lee,  106  U.  S.  196,  1  Sup.  Ct.  240, 
27  L.  ed.  171,  determined  that  an  individual  in  possession  of  real  estate 
under  the  Government  of  the  United  States,  which  claimed  to  be  its  owner, 
was,  nevertheless,  properly  sued  by  the  plaintiff,  as  owner,  to  recover  posses- 

26r> 


§  155  JURLSDir  TION   OF   COURTS   OVER 

sion,  and  such  suit  was  not  one  against  the  United  States,  although  the 
individual  in  possession  justified  such  possession  under  its  authority.  See 
also  Tindal  v.  Wesley,  167  U.  S.  204,  42  L.  ed.  137,  17  Sup.  Ct.  770,  to  the 
same  effect. 

"In  Pennoyer  v.  McConnaughy,  140  U.  S.  1,  9,  11  Sup.  Ct.  840,  35  L.  ed 
631,  a  suit  against  land  commissioners  of  the  State,  was  said  not  to  be 
against  the  State  although  the  complainants  sought  to  restrain  the  defend- 
ants, officials  of  the  State,  from  violating,  under  an  unconstitutional  act,  the 
complainant's  contract  with  the  State,  and  thereby  working  irreparable  dam- 
age to  the  property  rights  of  the  complainants.  Osborn  v.  United  States 
Bank,  supra,  was  cited,  and  it  was  stated :  '  But  the  general  doctrine  of  Os- 
born V.  Bank  of  the  United  States,  that  the  Circuit  Courts  of  the  United 
States  will  restrain  a  State  officer  from  executing  an  unconstitutional  statute 
of  the  State,  when  to  execute  it  would  violate  rights  and  privileges  of  the 
complainant  which  had  been  guaranteed  by  the  Constitution,  and  would  work 
irreparable  damage  and  injury  to  him,  has  never  been  departed  from.'  The 
same  principle  is  decided  in  Scott  v.  Donald,  165  U.  S.  58,  67,  41  L.  ed.  632, 
17  Sup.  Ct.  265.  And  see  Missouri,  etc.,  v.  Missouri  Railroad  Commissioners, 
183  U.  S.  53  46  L.  ed.  78. 

"The  cases  above  cited  do  not  include  one  exactly  like  this  under  dis- 
cussion. They  serve  to  illustrate  the  principles  upon  which  many  cases 
have  been  decided.  We  have  not  cited  all  the  cases,  as  we  have  not  thought 
it  necessary.  But  the  injunction  asked  for  in  the  Ayres  Case,  123  U.  S. 
(supra),  was  to  restrain  the  State  officers  from  commencing  suits  imder  the 
act  of  May  12,  1887  (alleged  to  be  unconstitutional),  in  the  name  of  the 
State  and  brought  to  recover  taxes  for  its  use,  on  the  ground  that  if  such 
suits  were  commenced  they  would  be  a  breach  of  a  contract  with  the  State. 
The  injunction  was  declared  illegal  because  the  suit  itself  could  not  be 
entertained  as  it  was  one  against  the  State  to  enforce  its  alleged  contract. 
It  was  said,  however,  that  if  the  court  had  power  to  entertain  such  a  suit, 
it  would  have  power  to  grant  the  restraining  order  preventing  the  com- 
mencement of  suits.  (Page  487.)  It  was  not  stated  that  the  suit  of  the 
injunction  was  necessarily  confined  to  a  case  of  a  threatened  direct  trespass 
upon  or  injury  to  property. 

"  Whether  the  commencement  of  a  suit  could  ever  be  regarded  as  an  ac- 
tionable injury  to  another,  equivalent  in  some  cases  to  a  trespass  such  as  is 
set  forth  in  some  of  the  foregoing  cases,  has  received  attention  "in  the  rate 
cases,  so  called.  Reagan  v.  Farmers'  Loan  &  Trust  Co.,  154  U.  S.  362,  14 
Sup.  Ct.  1047,  38  L.  ed.  1014  (a  rate  case),  was  a  suit  against  a  railroad 
commission  (created  under  an  act  of  the  State  of  Texas)  and  the  Attorney 
General,  all  of  whom  were  held  suable,  and  that  such  suit  was  not  one 
against  the  State.  The  commission  was  enjoined  from  enforcing  the  rates 
it  had  established  under  the  act,  and  the  Attorney  CSeneral  was  enjoined 
from  instituting  suits  to  recover  penalties  for  failing  to  conform  to  the 
rates  fixed  by  the  commission  under  such  act.  It  is  true  the  statute  in 
that  case  creating  the  board  provided  that  suit  miglit  be  maintained  by 
any  dissatisfied  railroad  company,  or  other  party  in  interest,  in  a  court 
of  competent  jurisdiction  in  Travis  County,  Texas,  against  the  commis- 

266 


CORPORATION   SUPERVISORY    COMMISSIONS,    ETC.        §  155 

sion  as  defendant.  This  court  held  that  such  language  permitted  a  suit  in 
tlie  United  States  Circuit  Court  for  the  Western  District  of  Texas,  which 
embraced  Travis  County,  but  it  also  held  that,  irrespective  of  that  con- 
sent, the  suit  was  not  in  effect  a  suit  against  the  State  (although  the  At- 
torney General  was  enjoined),  and  therefore  not  prohibited  under  the  amend- 
ment. It  was  said  in  the  opinion,  which  was  delivered  by  Mr.  Justice 
}3rewer,  that  the  suit  could  not  in  any  fair  sense  be  considered  a  suit 
against  the  State  (page  392),  and  the  conclusion  of  the  court  was  that  the 
objection  to  the  jurisdiction  of  the  Circuit  Court,  was  not  tenable  whether 
that  jurisdiction  was  rested  (page  393),  'upon  the  provisions  of  the  statute 
or  upon  the  general  jurisdiction  of  the  court  existing  by  virtue  of  the  statutes 
of  Congress  and  the  sanction  of  the  Constitution  of  the  United  States.' 
Each  of  these  grounds  is  effective  and  both  are  of  equal  force.  Union 
Pacific,  etc.,  v.  Mason  City  Company,  199  U.  S.  160,  166,  26  Sup.  Ct.  19, 
50  L.  ed.  134. 

"In  Smyth  v.  Ames,  169  U.  S.  466,  18  Sup.  Ct.  418,  42  L.  ed.  819  (another 
rate  case),  it  was  again  held  that  a  suit  against  individuals,  for  the  purpose 
of  preventing  them,  as  officers  of  the  State,  from  enforcing,  by  the  com- 
mencement of  suits  or  by  indictment,  an  unconstitutional  enactment  to  the 
injury  of  the  rights  of  the  plaintiff,  was  not  a  suit  against  a  State  within  the 
meaning  of  the  amendment.  At  page  518,  in  answer  to  the  objection  that 
the  suit  was  really  against  the  State,  it  was  said :  '  It  is  the  settled  doctrine 
of  this  court  that  a  suit  against  individuals  for  the  purpose  of  preventing 
them  as  officers  of  a  State  from  enforcing  an  unconstitutional  enactment  to 
the  injury  of  the  rights  of  the  plaintiff,  is  not  a  suit  against  the  State  within 
the  meaning  of  that  amendment.'  The  suit  was  to  enjoin  the  enforcement 
of  a  statute  of  Nebraska  because  it  was  alleged  to  be  unconstitutional,  on 
account  of  the  rates  being  too  low  to  afford  some  compensation  to  the  com- 
pany, and  contrary,  therefore,  to  the  Fourteenth  Amendment. 

"There  was  no  special  provision  in  the  statute  as  to  rates,  making  it  the 
duty  of  the  Attorney  General  to  enforce  it,  but  under  his  general  powers 
he  had  authority  to  ask  for  mandamus  to  enforce  such  or  any  other  law. 
State  of  Nebraska  ex  rel.,  etc.,  v.  The  Fremont,  etc.,  Railroad  Co.,  22 
Nebraska,  313. 

"The  final  decree  enjoined  the  Attorney  General  from  bringing  any  suit 
(page  477)  by  way  of  injunction,  mandamus,  civil  action  or  indictment,  for 
the  purpose  of  enforcing  the  provisions  of  the  act.  The  fifth  section  of  the 
act  provided  that  an  action  might  be  brought  by  a  railroad  company  in  the 
Supreme  Court  of  the  State  of  Nebraska;  but  this  court  did  not  base  its 
decision  on  that  section  when  it  held  that  a  suit  of  the  nature  of  that  before 
it  was  not  a  suit  against  a  State,  although  brought  against  individual  State 
officers  for  the  purpose  of  enjoining  them  from  enforcing,  either  by  civil 
proceeding  or  indictment,  an  unconstitutional  enactment  to  the  injury  of 
the  plaintiff's  right.     (Page  518.) 

"This  decision  was  reaffirmed  in  Prout  v.  Starr,  188  U.  S.  537,  542, 
47  L.  ed.  584,  23  Sup.  Ct.  398. 

"  Attention  is  also  directed  to  the  case  of  Missouri,  etc.,  Ry.  Co.  v.  Missouri 
R.  R.,  etc.,  Commissioners,  183  U.  S.  53,  46  L.  ed.  78.     That  was  a  suit 

2{i7 


§  155  JURISDICTION   OF   COURTS   OVER 

brought  in  a  State  court  of  Missouri  by  the  railroad  commissioners  of  the 
State,  who  had  the  powers  granted  them  by  the  statutes  set  forth  in  the 
report.  Their  suit  was  against  the  railroad  company  to  compel  it  to  dis- 
continue certain  charges  it  was  making  for  crossing  the  Boonville  bridge 
over  the  Missouri  River.  The  defendant  sought  to  remove  the  case  to  the 
Federal  court,  which  the  plaintiffs  resisted,  and  the  State  court  refused  to 
remove  on  the  ground  that  the  real  plaintiff  was  the  State  of  Missouri,  and 
it  was  proper  to  go  behind  the  face  of  the  record  to  determine  that  fact. 
In  regular  manner  the  case  came  here,  and  this  court  held  that  the  State 
was  not  the  real  party  plaintiff,  and  the  case  had  therefore  been  properly 
removed  from  the  State  court,  whose  judgment  was  thereupon  reversed. 

"  Applying  the  same  principles  of  construction  to  the  removal  act  which 
had  been  applied  to  the  Eleventh  Amendment,  it  was  said  by  this  court 
that  the  State  might  be  the  real  party  plaintiff  when  the  relief  sought  enures 
to  it  alone,  and  in  whose  favor  the  judgment  or  decree,  if  for  the  plaintiff, 
will  effectively  operate. 

■'  Although  the  case  is  one  arising  under  the  removal  act,  and  does  not 
involve  the  Eleventh  Amendment,  it  nevertheless  illustrates  the  question 
now  before  us,  and  reiterates  the  doctrine  that  the  State  is  not  a  party  to  a 
suit  simply  because  the  State  railroad  commission  is  such  a  party. 

"The  doctrine  of  Smyth  v.  Ames  is  also  referred  to  and  reiterated  in 
Gunter,  Attorney  General,  v.  Atlantic,  etc..  Railroad  Co.,  200  U.  S.  273, 
283,  26  Sup.  Ct.  2.52,  50  L.  ed.  477.  See  also  McNeill  v.  Southern  Railway, 
202  U.  S.  543-559,  50  L,  ed.  1142,  26  Sup.  Ct.  722;  Mississippi  Raib-oad 
Commission  v.  Illinois,  etc.,  Railroad  Co.,  203  U.  S.  335,  340,  27  Sup.  Ct. 
90,  51  L.  ed.  209. 

"The  various  authorities  we  have  referred  to  furnish  ample  justification 
for  the  assertion  that  individuals,  who,  as  officers  of  the  State,  are  clothed 
with  some  duty  in  regard  to  the  enforcement  of  the  laws  of  the  State,  and 
who  tlireaten  and  are  about  to  commence  proceedings,  either  of  a  civil  or 
criminal  nature,  to  enforce  against  parties  affected  an  unconstitutional  act, 
violating  the  Federal  Constitution,  may  be  enjoined  by  a  Federal  court  of 
equity  from  such  action. 

"It  is  objected,  however,  that  Fitts  v.  McGhee,  172  U.  S.  516,  19  Sup.  Ct. 
269,  43  L.  ed.  535,  has  somewhat  limited  this  principle,  and,  that  upon  the 
authority  of  that  case,  it  must  be  held  that  the  State  was  a  party  to  the  suit 
in  the  United  States  Circuit  Court,  and  the  bill  should  have  been  dismissed 
as  to  the  Attorney  General  on  that  ground. 

"We  do  not  think  such  contention  is  well  founded.  The  doctrine  of 
Smyth  V.  Ames  was  neither  overruled  nor  doubted  in  the  Fitts  case.  In 
that  case  the  Alabama  legislature,  by  the  act  of  1895,  fixed  the  tolls  to  be 
charged  for  crossing  the  bridge.  The  penalties  for  disobeying  that  act,  by 
demanding  and  receiving  higher  tolls,  were  to  be  collected  by  the  persons 
paying  them.  No  officer  of  the  State  had  any  official  connection  with  the 
recovery  of  such  penalties.  The  indictments  mentioned,  were  found  under 
another  statute,  set  forth  at  page  520  of  the  report  of  the  case,  which  pro- 
vided a  fine  against  an  officer  of  a  company  for  taking  any  greater  rate  of 
toll  than  was  authorized  by  its  charter,  or,  if  the  charter  did  not  specify  the 

2()8 


CORPORATION    SUPERVISORY    COMMISSIONS,    ETC.        §  155 

amount,  then  the  fine  was  imposed  for  charging  any  unreasonable  toll,  to  be 
determined  by  a  jury.  This  act  was  not  claimed  to  be  unconstitutional,  and 
tlie  indictments  found  under  it  were  not  necessarily  connected  with  the 
alleged  unconstitutional  act  fixing  the  tolls.  As  no  State  officer  who  was 
made  a  party  bore  any  close  official  connection  with  the  act  fixing  the  tolls, 
the  making  of  such  officer  a  party  defendant  was  a  simple  effort  to  test  the 
constitutionality  of  such  act  in  that  way,  and  there  is  no  principle  upon  which 
it  could  be  done.  A  State  superintendent  of  schools  might  as  well  have  been 
made  a  party.    In  the  light  of  this  fact  it  was  said  in  the  opinion  (page  530) : 

"  '  In  the  present  case,  as  we  have  said,  neither  of  the  State  officers  named 
held  any  special  relation  to  the  particular  statute  alleged  to  be  unconstitu- 
tional. They  were  not  expressly  directed  to  see  to  its  enforcement.  If, 
because  they  were  law  officers  of  the  State  a  case  could  be  made  for  the  pur- 
pose of  testing  the  constitutionality  of  the  statute,  by  an  injunction  such  as 
it  brought  against  them,  then  the  constitutionality  of  every  act  passed  by 
the  legislature  could  be  tested  by  a  suit  against  the  governor  and  the  at- 
torney general,  based  upon  the  theory  that  the  former,  as  the  executive  of 
the  State,  was,  in  a  general  sense,  charged  with  the  execution  of  all  its  laws, 
and  the  latter,  as  attorney  general,  might  represent  the  State  in  litigation 
involving  the  enforcement  of  its  statutes.  That  would  be  a  very  con- 
venient way  for  obtaining  a  speedy  judicial  determination  of  questions  of 
constitutional  law  which  may  be  raised  by  individuals,  but  it  is  a  mode 
which  cannot  be  applied  to  the  States  of  the  Union  consistently  with  the 
fundamental  principle  that  they  cannot,  without  their  assent,  be  brought 
into  any  court  at  the  suit  of  private  persons.' 

"  In  making  an  officer  of  the  State  a  party  defendant  in  a  suit  to  enjoin 
the  enforcement  of  an  act  alleged  to  be  unconstitutional  it  is  plain  that 
such  officer  must  have  some  connection  with  the  enforcement  of  the  act, 
or  else  it  is  merely  making  him  a  party  as  a  representative  of  the  State,  and 
thereby  attempting  to  make  the  State  a  party. 

"It  has  not,  however,  been  held  that  it  was  necessary  that  such  duty 
should  be  declared  in  the  same  act  which  is  to  be  enforced.  In  some  cases, 
it  is  true,  the  duty  of  enforcement  has  been  so  imposed  (154  U.  S.  362,  366, 
38  L.  ed.  1014,  14  Sup.  Ct.  1047,  §  19  of  the  act),  but  that  may  possibly 
make  the  duty  more  clear;  if  it  otherwise  exist  it  is  equally  efficacious.  The 
fact  that  the  State  officer  by  virtue  of  his  office  has  some  connection  with 
tfie  enforcement  of  the  act  is  the  important  and  material  fact,  and  whether 
it  arises  out  of  the  general  law,  or  is  specially  created  by  the  act  itself,  is 
not  material  so  long  as  it  exists. 

"In  the  course  of  the  opinion  of  the  Fitts  case  the  Reagan  and  Smyth 
cases  were  referred  to  (with  others)  as  instances  of  State  officers  specially 
charged  with  the  execution  of  a  State  enactment  alleged  to  be  unconstitu- 
tional, and  who  commit  under  its  authority  some  specific  wrong  or  trespass 
to  the  injury  of  plaintiff's  rights.  In  those  cases  the  only  wrong  or  injury 
or  trespass  involved  was  the  threatened  commencement  of  suits  to  enforce 
the  statutes  as  to  rates,  and  the  threat  of  such  commencement  was  in  each 
case  regarded  as  sufficient  to  authorize  the  issuing  of  an  injunction  to  pre- 
vent the  same.     The  threat  to  commence  those  suits  imder  such  circum- 

209 


§  155  JURISDICTION    OF   COURTS   OVER 

stances  was  therefore  necessarily  held  to  be  equivalent  to  any  other  threat- 
ened wrong  or  injury  to  the  property  of  a  plaintiff  which  had  theretofore 
been  held  sufficient  to  autliorize  the  suit  against  the  officer.  The  being 
specially  charged  with  the  duty  to  enforce  the  statute  is  sufficiently  apparent 
when  such  duty  exists  under  the  general  authority  of  some  law,  even  though 
such  authority  is  not  to  be  found  in  the  particular  act.  It  might  exist  by 
reason  of  the  general  duties  of  the  officer  to  enforce  it  as  a  law  of  the  State. 

"The  officers  in  the  Fitts  case  occupied  the  position  of  having  no  duty 
at  all  with  regard  to  the  act,  and  could  not  properly  be  made  parties  to  the 
suit  for  the  reason  stated. 

"It  is  also  objected  that  as  the  statute  does  not  specifically  make  it  the 
duty  of  the  Attorney  General  (assuming  he  has  that  general  right)  to  en- 
force it,  he  has  under  such  circumstances  a  full  general  discretion  whether 
to  attempt  its  enforcement  or  not,  and  the  court  cannot  interfere  to  control 
him  as  Attorney  General  in  the  exercise  of  his  discretion. 

"  In  our  view  there  is  no  interference  with  his  discretion  under  the  facts 
herein.  There  is  no  doubt  that  the  court  cannot  control  the  exercise  of  the 
discretion  of  an  officer.  It  can  only  direct  affirmative  action  where  the 
officer  having  some  duty  to  perform  not  involving  discretion,  but  merely 
ministerial  in  its  nature,  refuses  or  neglects  to  take  such  action.  In  that 
case  the  court  can  direct  the  defendant  to  perform  this  merely  ministerial 
duty.     Board  of  Liquidation  v.  McComb,  92  U.  S.  531,  541,  23  L.  ed.  623. 

"The  general  discretion  regarfling  the  enforcement  of  the  laws  when  and 
as  he  deems  appropriate  is  not  interfered  with  by  an  injunction  which 
restrains  the  State  officer  from  taking  any  steps  towards  the  enforcement 
of  an  unconstitutional  enactment  to  the  injury  of  complainant.  In  such 
case  no  affirmative  action  of  any  nature  is  directed,  and  the  officer  is  simply 
prohibited  from  doing  an  act  which  he  had  no  legal  right  to  do.  An  injunc- 
tion to  prevent  him  from  doing  that  which  he  has  no  legal  right  to  do  is  not 
an  interference  with  the  discretion  of  an  officer. 

"  It  is  also  argued  that  the  only  proceeding  which  the  Attorney  General 
could  take  to  enforce  the  statute  so  far  as  his  office  is  concerned,  was  one  by 
mandamus,  which  would  be  commenced  by  the  State  in  its  sovereign  and 
governmental  character,  and  that  the  right  to  bring  such  action  is  a  neces- 
sary attribute  of  a  sovereign  government.  It  is  contended  that  the  com- 
plainants do  not  complain  and  they  care  nothing  about  any  action  which 
Mr.  Young  might  take  or  bring  as  an  ordinary  individual,  but  that  he  was 
complained  of  as  an  officer,  to  whose  discretion  is  confided  the  use  of  the 
name  of  the  State  of  Minnesota  so  far  as  litigation  is  concerned,  and  that 
when  or  how  he  shall  use  it  is  a  matter  resting  in  his  discretion  and  cannot 
be  controlled  by  any  court. 

"  The  answer  to  all  this  is  the  same  as  made  in  every  case  where  an  officer 
claims  to  be  acting  under  the  authority  of  the  State.  The  act  to  be  enforced 
is  alleged  to  be  unconstitutional,  and  if  it  be  so,  the  use  of  the  name  of  the 
State  to  enforce  an  unconstitutional  act  to  the  injury  of  complainants  is  a 
proceeding  without  the  authority  of  and  one  which  does  not  affect  the  State 
in  its  sovereign  or  governmental  capacity.  It  is  simply  an  illegal  act  upon 
the  part  of  a  State  official  in  attempting  by  the  use  of  the  name  of  the  State 

270 


CORPOllATION    SUPEllVISORY   COMMISSIONS,    ETC.       §  155 

to  enforce  a  legislative  enactment  which  is  void  because  unconstitutional. 
If  the  act  which  the  State  Attorney  General  seeks  to  enforce  be  a  violation 
of  the  Federal  Constitution,  the  officer  in  proceeding  under  such  enactment 
comes  into  conflict  with  the  superior  authority  of  that  Constitution,  and 
lie  is  in  that  case  stripped  of  his  official  or  representative  cliaiacter  and  is 
subjected  in  his  person  to  the  consequences  of  his  individual  conduct.  The 
State  has  no  power  to  impart  to  liim  any  immunity  from  responsibility  to 
the  supreme  authority  of  the  United  States.  See  In  re  Ayres,  supra,  507. 
It  would  i)e  an  injury  to  complainant  to  harass  it  with  a  multiplicity  of  suits 
or  litigation  generally  in  an  endeavor  to  enforce  penalties  under  an  uncon- 
stitutional enactment,  and  to  prevent  it  ought  to  be  within  the  jurisdiction 
of  a  court  of  equity.  If  the  question  of  unconstitutionality  with  reference, 
at  least,  to  the  Federal  Constitution  be  first  raised  in  a  Federal  court  that 
court,  as  we  think  is  shown  by  the  authorities  cited  hereafter,  has  the  right 
to  decide  it  to  the  exclusion  of  all  other  courts. 

"The  question  remains  whether  the  Attorney  General  had,  by  the  law 
of  the  State,  so  far  as  concerns  these  rate  acts,  any  duty  with  regard  to  the 
enforcement  of  the  same.  By  his  official  conduct  it  seems  that  he  regarded 
it  as  a  duty  connected  with  his  office  to  compel  the  company  to  obey  the 
commodity  act,  for  he  commenced  proceedings  to  enforce  such  obedience 
immediately  after  the  injunction  issued,  at  the  risk  of  being  found  guilty 
of  contempt  by  so  doing. 

"The  duties  of  the  Attorney  General  as  decided  by  the  Supreme  Court 
of  Minnesota,  are  created  partly  by  statute  and  exist  partly  as  at  common 
law.  State  ex  rel.  Young,  Attorney  General,  v.  Robinson  (decided  June  7, 
l'JU7),  112  N.  W.  Rep.  269.  In  the  above  cited  case  it  was  held  that  the 
Attorney  General  might  institute,  conduct  and  maintain  all  suits  and  pro- 
ceedings he  might  deem  necessary  for  the  enforcement  of  the  laws  of  the 
State,  the  preservation  of  order  and  the  protection  of  public  rights,  and  that 
there  were  no  statutory  restrictions  in  that  State  limiting  the  duties  of  the 
Attorney  General  in  such  case. 

"Section  3  of  chap.  227  of  the  General  Laws  of  Minnesota,  1905  (same 
laws,  §  58,  Revised  Laws  of  Minnesota,  1905),  imposes  the  duty  upon  the 
Attorney  General  to  cause  proceedings  to  be  instituted  against  any  corpora- 
tion whenever  it  shall  have  offended  against  the  laws  of  the  State.  By 
§  1960  of  tl :c  Revised  Laws  of  1905  it  is  also  provided  that  the  Attorney 
General  shall  be  ex  officio  attorney  for  the  railroad  commission  and  it  is 
made  his  duty  to  institute  and  prosecute  all  actions  which  the  commission 
shall  order  brought,  and  shall  render  the  commissioners  all  counsel  and 
advice  necessary  for  the  proper  performance  of  their  duties. 

"It  is  said  that  the  Attorney  General  is  only  bound  to  act  when  the 
commission  orders  action  to  be  brought,  and  that  §  5  of  the  commodity  act 
(April  IS,  1907)  expressly  provides  that  no  duty  shall  rest  upon  the  com- 
mission to  enforce  the  act,  and  hence  no  duty  other  than  that  which  is 
discretionary  rests  upon  the  Attorney  General  in  that  matter.  The  pro- 
vision is  somewhat  unusual,  but  the  reasons  for  its  insertion  in  that  act  are 
not  material,  and  neither  require  nor  justify  comment  by  this  court. 

"It  would  seem  to  be  clear  that  the  Attorney  General,  under  his  power 

271 


§  155  JURISDICTION   OF  COURTS   OVER 

existing  at  common  law  and  by  virtue  of  these  various  statutes,  had  a 
general  duty  imposed  upon  him,  which  includes  the  right  and  the  power  to 
enforce  the  "statutes  of  the  State,  including,  of  course,  the  act  in  question,  if 
it  were  constitutional.  His  power  by  virtue  of  his  office  sufficiently  con- 
nected him  with  the  duty  of  enforcement  to  make  him  a  proper  party  to  a 
suit  of  the  nature  of  the  one  now  before  the  United  States  Circuit  Court." 


272 


JURISDICTION    OF   COURTS   OVER   CORPORATIONS        §  150 


CHAPTER  XI 


JURISDICTION   OF   COURTS   OVER   CORPORATIONS 


156.  Essentials  or  Prerequisites  of 

Jurisdiction. 

157.  Federal  Supreme  Court — Ap- 

peal and  Error — Funda- 
mental Question  Is  Juris- 
diction. 

158.  Jurisdiction    of    Federal    Su- 

preme Court  —  Federal 
Question — Presentment  by 
Record — Special  Allegation. 

159.  Jurisdiction — Appeals   Taken 

After  1891  to  Federal  Su- 
preme Court. 

160.  Jurisdiction  of  Federal  Circuit 

Court  of  Appeals^ — When 
Invoked — Diverse  Citizen- 
ship. 

161.  Original  Jurisdiction  of  Fed- 

eral Circuit  Courts  Under 
Judiciary  Act  of  1888. 

162.  Equity    Jurisdiction — Gener- 

ally. 

163.  Equity     Jurisdiction  —  Ade- 

quate Remedy  at  Law. 

164.  Equity      Jurisdiction  —  Ade- 

quate Remedy  at  Law — 
Collection  of  Taxes — In- 
junction. 


§  165.  Equity  Jurisdiction — Waiver 
of  Defense  of  Remedy  at 
Law. 

166.  Equity  Jurisdiction   of  Fed- 

eral Courts — Parties. 

167.  Equity    Jurisdiction    to    Re- 

move Cloud  Upon  or  to 
Quiet  Title. 

168.  Jurisdiction  of  Federal  Circuit 

Court  to  Remove  Incum- 
brance or  Lien  or  Cloud 
Upon  Title  to  Property 
Within  District  —  Absent 
Defendants  —  Process  — 
Service — Publication. 

169.  Equity  Jurisdiction   of  P'ed- 

eral  Circuit  Courts — Pro- 
bate Matters — Diverse  Citi- 
zenship. 

170.  When  Equity  Has  no  Juris- 

diction of  Bill  to  Recover 
Lands  of  Railroad  Com- 
pany. 

171.  Jurisdiction  of  Court  of  Claims 

of  New  York — Negligence 
Causing  Death  —  Nonresi- 
dents as  Parties — State  as 
Common  Carrier. 


§  156.  Essentials  or  Prerequisites  of  Jurisdiction. 

We  will  state  here  as  preliminary  to  the  discussion  of  the  ju- 
risdiction of  courts  over  corporations  that  certain  general  rules 
as  to  the  essentials  of  jurisdiction  are:  (1)  The  court  must  have 
cognizance  of  the  class  of  cases  to  which  the  one  to  be  adjudged 
belongs;  (2)  the  proper  parties  must  be  present;  and  (3)  the 
point  decided  must  be,  in  substance  and  effect,  within  the 
18  273 


§  157        JURISDICTION    OF    COURTS    OVER   CORPORATIONS 

judgment.^  So  before  that  power  to  hear  and  deterniiue  or 
adjudge  a  matter  in  controversy  which  constitutes  jurisdic- 
tion 2  can  be  affirmed  to  exist  it  must  be  made  to  appear  that 
the  law  has  given  the  tribunal  capacity  to  ascertain  the  com- 
plaint against  the  person  or  thing  sought  to  be  charged  or 
affected;  that  such  complaint  has  actually  been  preferred; 
and  that  such  person  or  thing  has  been  properly  brought  before 
the  tribunal  to  answer  the  charge  therein  contained.^ 

§  157.  Federal  Supreme  Court— Appeal  and  Error- 
Fundamental  Question  Is  Jurisdiction. 

In  the  Supreme  Court  of  the  United  States  on  every  writ  of 
error  or  appeal  the  first  and  fundamental  question  is  that  of 
jurisdiction,  first  of  said  court,  and  then  of  the  court  from 
which  the  record  comes.  Such  a  question  arising  on  the  face 
of  the  record  cannot  be  ignored.  The  court  is  bound  to  ask 
and  answer  this  question  for  itself,  without  respect  to  the 
relation  of  the  parties  to  it,  and  whether  propounded  by  counsel 
or  not.^ 

The  jurisdiction  referred  to  in  the  first  subdivision  of  the 
fifth  section  of  the  Judiciary  Act  of  March  3,  1891,  is  the  juris- 
diction of  the  Circuit  and  District  Courts  of  the  United  States 
as  such ;  and  when  a  case  comes  directly  to  the  Federal  Supreme 
Court  under  that  subdivision,  the  question  of  jurisdiction  alone 
is  open  to  examination.  The  general  rule  is  that  the  jurisdic- 
tion of  the  Federal  Courts  depends  not  on  the  relative  situation 

1  Railway  Co.  v.  State,  55  Ark.  200,  205,  17  N.  W.  806,  per  Hemingway,  J. 
(an  action  to  recover  penalty  from  railway  company  for  failure  to  signal  at 
crossing;  jurisdiction  of  subject  and  when  acquired),  citing  Windsor  v.  Mc- 
Veigh, 93  U.  S.  274;  Munday  v.  Vail,  34  N.  J.  L.  418;  1  Black  on  Judg.,  §  242. 
See  also  Sloan  v.  Byers,  37  Mont.  503,  511,  97  Pac.  855,  857,  per  Smith,  J. 

2  See  §§  80  ei  seq.,  herein. 

3  Pullman  Palace  Car  Co.  v.  Harrison,  122  Ala.  149,  157,  82  Am.  St.  Rep. 
68,  per  Tyson,  J.,  a  case  relating  to  jurisdiction  over  foreign  corporations 
and  the  nonsufficiency  of  a  levy  of  attachment  to  give  jurisdiction. 

i  Defiance  Water  Co.  v.  Defiance,  191  U.  S.  184,  48  L.  ed.  140,  24  Sup.  Ct. 
63;  Continental  Nat.  Bk.  of  Memphis  v.  Buford,  191  U  S.  119,  48  L.  ed. 
119,  24  Sup.  Ct.  54;  Great  Southern  Fire  Proof  Hotel  Co.  v.  Jones,  177  U.  S. 
449,  20  Sup.  Ct.  690,  44  L.  ed.  842. 

274 


JURISDICTION   OF   COURTS    OVER   CORPORATIONS        §  158 

of  the  parties  concerned  in  interest,  but  on  the  relative  situa- 
tion of  the  parties  named  in  the  record.^ 

§  158.  Jurisdiction  of  Federal  Supreme  Court— Federal 
Question— Presentment  by  Record— Special  Allegation. 

The  jurisdiction  of  the  Federal  Supreme  Court,  under  §  709 
of  the  Revised  Statutes,  to  review  proceedings  of  State  Courts 
is  limited  to  specific  instances  of  denials  of  Federal  rights 
specially  set  up  in  and  denied  by  the  State  Court.^  The  review 
of  a  judgment  of  a  State  Court  by  said  Supreme  Court  of  the 
United  States  is  confined  to  assignments  of  error  made  and 
passed  upon  in  the  judgment  brought  in  said  court  for  review; 
and  assignments  of  error  therein  cannot  bring  new  matter  into 
the  record.^  Under  the  Revised  Statutes,  §709,  there  are 
three  classes  of  cases  in  which  the  final  decree  of  a  State  Court 
may  be  examined  in  the  Supreme  Court  of  the  United  States: 
(1)  Where  there  is  drawn  in  question  the  validity  of  a  treaty, 
or  statute  of,  or  authority  exercised  under,  the  United  States, 
and  the  decision  is  against  their  vahdity;  (2)  where  is  drawn  in 
question  the  validity  of  a  statute  of,  or  an  authority  exercised 
under,  any  State,  on  the  ground  of  their  being  repugnant  to 
the  Constitution,  treaties  or  laws  of  the  United  States,  and  the 
decision  is  in  favor  of  their  validity;  (3)  where  any  title,  right, 
pri\dlege  or  immunity  is  claimed  under  the  Constitution,  or 
any  treaty  or  statute  of,  or  commission  held  or  authority 
exercised  under,  the  United  States,  and  the  decision  is  against 
the  title,  right,  privilege  or  immunity  specially  set  up  and 
claimed  by  either  party  under  such  Constitution,  statute, 
commission  or  authority,  and  in  this  class  the  Federal  right, 
title,  privilege  or  immunity  must,  with  possibly  some  rare 
exceptions,  be  specially  set  up  to  give  said  Supreme  Court 
jurisdiction.    But  where  the  validity  of  a  treaty  or  statute  of 

5  Mexican  Central  Ry.  Co.  v.  Eckman,  187  U.  S.  429,  47  L.  ed.  245,  23 
Sup.  Ct.  211. 

6  Waters-Pierce  Oil  Co.  v.  Texas,  212  U.  S.  86,  53  L.  ed.  417,  29  Sup.  Ct. 
220,  aff'glOeS.  W.  918. 

^  Waters-Pierce  Oil  Co.  v.  Texas,  212  U.  S.  112,  53  L.  ed.  431,  29  Sup. 
Ct.  227;  writ  of  error  to  review  105  S.  W.  851,  dismissed. 

275 


§   159        .lUKISDICTlON    OF    COURTS    OVER    CORPORATIONS 

the  United  States  is  raised,  and  the  decision  is  against  it,  or 
the  vahdity  of  a  State  statute  is  drawn  in  question,  and  the 
decision  is  in  favor  of  its  vahdity,  if  the  Federal  question  ap- 
pears in  the  record  and  was  decided,  or  if  such  decision  was 
necessarily  involved  in  the  case,  and  the  case  could  not  have 
been  determined  without  deciding  such  question,  the  fact  that 
it  was  not  specially  set  up  and  claimed  is  not  conclusive  against 
a  review  of  such  question  in  said  Supreme  Court. ^  Said  court 
does  not  review,  but  accepts  as  conclusive  the  findings  of  facts 
made  by  the  State  Court. ^  So  on  a  writ  of  error  that  court 
cannot  deal  with  facts,  and  whether  the  land  involved  is  within 
or  without  certain  boundaries  is  for  the  State  Court  to  deter- 
mine.^'' And  relief  cannot  be  afforded  by  the  United  States 
Supreme  Court  to  one  who  violates  the  provisions  of  a  State 
statute  from  an  erroneous  conception  of  what  the  statute 
requires.^^ 

§  159.  Jurisdiction — Appeals  Taken  After  1891  to  Fed- 
eral Supreme  Court. 

The  Judiciary  Act  of  1891  ^'  having  provided  that  no  appeals 
shall  be  taken  from  Circuit  Courts  to  the  Federal  Supreme 
Court,  except  as  provided  in  that  act,  and  having  repealed  all 
acts  and  parts  of  acts  relating  to  appeals  or  writs  of  error  con- 
tained in  that  act,  and  the  joint  resolution  of  1891  ^^  having 
provided  that  nothing  contained  in  that  act  shall  be  held  to 

8  Columbia  Water  Power  Co.  v.  Columbia  Electric  St.  Ry.  L.  &  P.  Co., 
172  U.  S.  475,  43  L.  ed.  521,  19  Sup.  Ct.  247,  aff'g  43  S.  C.  154,  20  S.  E.  1002, 
cited  upon  the  last  point  in  Bollin  v.  Nebraska,  176  U.  S.  83,  92,  20  Sup.  Ct. 
287,  44  L.  ed.  382;  Telluride  Power  Transmission  Co.  v.  Rio  Grande  Western 
Ry.  Co.,  175  U.  S.  639,  647,  44  L.  ed.  305,  20  Sup.  Ct.  245;  Scudder  v.  Comp- 
troller of  New  York,  175  U.  S.  32,  36,  44  L.  ed.  62,  20  Sup.  Ct.  26.  See  also 
204  U.  S.  568,  196  U.  S.  86,  132,  186  U.  S.  307,  308,  185  U.  S.  46. 

8  Waters-Pierce  Oil  Co.  v.  Texas,  212  U.  S.  86,  53  L.  ed.  417,  29  Sup.  Ct. 
220,  aff'g  106  S.  W.  918. 

10  King  V.  West  Virginia  &  Spruce  Coal  &  Lumber  Co.,  216  U.  S.  92,  54 

L.  ed. ,  30  Sup.  Ct. ,  writ  of  error  to  review  64  W.  Va.  545,  546,  584, 

610,  dismissed. 

11  Hammond  Packing  Co.  v.  Arkansas,  212  U.  S.  322,  53  L.  ed.  530,  29 
Sup.  Ct.  370,  aff'g  81  Ark.  519. 

12  Act  of  March  3,  1891,  26  Stat.,  pp.  826,  827,  chap.  517. 

13  Of  March  3,  1891,  26  Stat.  1115. 

276 


JURISDICTION   OF   COURTS   OVER   CORPORATIONS    §§  KiO,   161 

impair  the  jurisdiction  of  said  Supreme  Court  in  respect  of  any 
case  wherein  the  writ  of  error  or  tlie  appeal  shall  have  been 
sued  out  or  taken  to  that  court  before  July  1,  1891,  an  appeal 
to  said  court  from  a  judgment  entered  in  a  Circuit  Court 
November  18,  1890,  appealable  before  July  1,  1891,  could  not 
be  taken  after  such  last-mentioned  date.^'* 

§  160.  Jurisdiction  of  Federal  Circuit  Court  of  Appeals 
— When  Invoked — Diverse  Citizenship. 

The  right  to  invoke  the  jurisdiction  of  the  Federal  Circuit 
Court  of  Appeals  existed  immediately  after  the  act  '^  creat- 
ing said  courts,  notwithstanding  the  provision  as  to  appeals 
taken  or  pending,  before  July  1,  1891.^* 

The  Circuit  Courts  of  Appeals  have  power  to  review  the 
judgments  of  the  Circuit  Courts  in  cases  where  the  jurisdiction 
of  the  Circuit  Court  attaches  solely  by  reason  of  diverse  citizen- 
ship, notwithstanding  constitutional  questions  may  have  arisen 
after  the  jurisdiction  of  the  Circuit  Court  attached." 

§  161.  Original  Jurisdiction  of  Federal  Circuit  Courts 
Under  Judiciary  Act  of  1888. 

The  Judiciary  Act  as  amended  in  1888  provides:  §  1.  ''That 

1*  National  Exchange  Bk.  of  Baltimore  v.  Peters,  144  U.  S.  570,  36  L.  ed. 
545,  12  Sup.  Ct.  767,  cited  in  Little  Rock  &  M.  Rd.  Co.  v.  East  Tenn.  Va.  & 
Ga.  Rd.  Co.,  159  U.  S.  698,  699,  40  L.  ed.  311,  16  Sup.  Ct.  189;  Mason  v. 
Pewabic  Mining  Co.,  153  U.  S.  361,  366,  14  Sup.  Ct.  847,  38  L.  ed.  745; 
American  Construction  Co.  v.  Jacksonville,  T.  &  K.  W.  Ry.  Co.,  148  U.  S. 
372,  378,  13  Sup.  Ct.  758,  37  L.  ed.  486;  United  States  v.  Ady,  76  Fed.  360; 
Nashua  &  L.  R.  Corp.  v.  Boston  &  L.  R.  Corp.,  51  Fed.  931. 

15  Of  March  31,  1891. 

16  So  held  in  Baltimore  &  Ohio  R.  Co.  v.  Andrews  (U.  S.  C.  C.  C.  A.),  50 
Fed.  728,  6  U.  S.  App.  75,  1  C.  C.  A.  636,  17  L.  R.  A.  190.  See  Northern 
Pac.  R.  Co.  V.  Amato  (U.  S.  C.  C.  A.),  49  Fed.  881,  aff'd  in  144  U.  S.  465, 
36  L.  ed.  506,  12  Sup.  Ct.  740;  Louisville  Public  Warehouse  Co.  v.  Collector 
of  Customs  (U.  S.  C.  C.  A.),  49  Fed.  561,  aff'g  48  Fed.  372. 

17  American  Sugar  Ref.  Co.  v.  New  Orleans,  181  U.  S.  277,  45  L.  ed.  859, 
21  Sup.  Ct.  646. 

Jurisdiction  of  United  States  Circuit  Court  of  Appeals  limited  to  appeals 
from  final  decree  and  does  not  embrace  those  which  involve  constitutionality 
of  State  law  and  Federal  Constitution.  Westerly  v.  Westerly  Waterworks 
(U.  S.  C.  C.  A.),  76  Fed.  467,  22  C.  C.  C.  A.  278,  33  U.  S.  App.  723, 
in  75  Fed.  181,  dismissed. 

I  t 


§  161        JURISDICTION   OF   COURTS    OVER   CORPORATIONS 

the  Circuit  Courts  of  the  United  States  shall  have  original 
cognizance,  concurrent  with  the  courts  of  the  several  States, 
of  all  suits  of  a  civil  nature,  at  common  law  or  in  equity, 
where  the  matter  in  dispute  exceeds,  exclusive  of  interest  and 
costs,  the  sum  or  value  of  two  thousand  dollars,  and  arising 
under  the  Constitution  or  laws  of  the  United  States,  or  treaties 
made,  or  which  shall  be  made,  under  their  authority,  or  in 
which  controversy  the  United  States  are  plaintiffs  or  peti- 
tioners, or  in  which  there  shall  be  a  controversy  between  citi- 
zens of  different  States,  in  which  the  matter  in  dispute  exceeds, 
exclusive  of  interest  and  costs,  the  sum  or  value  aforesaid, 
or  a  controversy  between  citizens  of  the  same  State,  claiming 
lands  under  grants  of  different  States,  or  a  controversy  between 
citizens  of  a  State  and  foreign  States,  citizens,  or  subjects,  in 
which  the  matter  in  dispute  exceeds,  exclusive  of  interest  and 
costs,  the  sum  or  value  aforesaid,  and  shall  have  exclusive 
cognizance  of  all  crimes  and  offenses  cognizable  under  the 
authority  of  the  United  States,  except  as  otherwise  provided 
by  law,  and  concurrent  jurisdiction  with  the  District  Courts 
of  the  crimes  and  offenses  cognizable  by  them.  But  no  person 
shall  be  arrested  in  one  district  for  trial  in  another  in  any  civil 
action  before  a  Circuit  or  District  Court;  and  no  civil  suit  shall 
be  brought  before  either  of  said  courts  against  any  person  by 
any  original  process  or  proceeding  in  any  other  district  than 
that  whereof  he  is  an  inhabitant,  but  where  the  jurisdiction 
is  founded  only  on  the  fact  that  the  action  is  between  citizens 
of  different  States,  suit  shall  be  brought  only  in  the  district  of 
the  residence  of  either  the  plaintiff  or  the  defendant;  nor  shall 
any  Circuit  or  District  Court  have  cognizance  of  any  suit, 
except  upon  foreign  bills  of  exchange,  to  recover  the  contents 
of  any  promissory  note  or  other  chose  in  action  in  favor  of  any 
assignee,  or  of  any  subsequent  holder  of  [if]  such  instrument 
be  payable  to  bearer  and  be  not  made  by  any  corporation, 
unless  such  suit  might  have  been  prosecuted  in  such  court  to 
recover  the  said  contents  if  no  assignment  or  transfer  had 
been  made."  '* 

18  Act  of  August  13,  1888,  chap.  866,  §  1,  25  Stat,  at  L.  433,  U.  S.  Comp. 

278 


JURISDICTION   OF   COURTS   OVER   CORPORATIONS       §  162 

§  162.  Equity  Jurisdiction — Generally. 

The  equity  jurisdiction  of  the  Federal  Courts  is  derived  from 
the  Federal  Constitution  and  is  like  unto  that  of  the  High 
Court  of  Chancery  in  England  at  the  time  of  the  adoption  of 
the  Judiciary  Act  of  1789.1'*  A  court  of  equity  has  jurisdiction 
of  a  bill  by  a  corporation  praying  that  its  guaranty  on  a  great 
'lumber  of  negotiable  bonds  may  be  canceled,  and  suits  upon 
it  restrained,  because  of  facts  not  appearing  on  its  face.^" 
But  equity  courts  do  not  restore  money  or  property  to  corpora- 
tions that  have  obtained  them  by  contracts  or  conveyances 
made  in  excess  of  their  powers,  until  those  corporations  first 
restore  the  money  or  property  they  have  secured  thereby  or 
its  value,  since  he  who  seeks  equity  must  first  do  equity .^^ 

Stat.  1901,  p.  508,  amending  act  of  March  3,  1887,  chap.  373,  §  1,  24  Stat, 
at  L.  552,  amending  the  first  section  of  "an  act  to  determine  the  jurisdiction 
of  Circuit  Courts  of  the  United  States,  and  to  regulate  the  removal  of  causes 
from  state  courts  and  for  other  purposes."  Approved  March  3,  1875, 
chap.  137,  §  1,  18  Stat,  at  L.  470.  See  Act  of  March  3,  chap.  517,  §§  4-6, 
U.  S.  Comp.  Stat.,  1901,  pp.  548-550,  as  to  appellate  jurisdiction  superseding 
such  jurisdiction  of  Circuit  Courts.  See  §  629,  Rev.  Stat.,  pars.  1-20,  super- 
seded by  act  of  1875. 

When  a  State  contains  more  than  one  district,  every  suit  not  of  a  local 
nature  in  the  Circuit  or  District  Court  thereof,  against  a  single  defendant, 
inhabitant  of  such  State,  must  be  brought  in  the  district  where  he  resides; 
but  if  there  are  two  or  more  defendants,  residing  in  different  districts  of  the 
State,  it  may  be  brought  in  either  district,  and  a  duplicate  writ  may  be  is- 
sued against  the  defendants,  directed  to  the  marshal  of  any  other  district 
in  which  any  defendant  resides.  The  clerk  issuing  the  duplicate  writ  shall 
indorse  thereon  that  it  is  a  true  copy  of  a  writ  sued  out  of  the  court  of  the 
proper  district,  and  such  original  and  duplicate  writs,  when  executed  and 
returned  into  the  office  from  which  they  issue,  shall  constitute  and  be  pro- 
ceeded on  as  one  suit;  and  upon  any  judgment  or  decree  rendered  therein, 
execution  may  be  issued,  directed  to  the  marshal  of  any  district  in  the 
same  State.  Act  of  May  4,  1858,  chap.  27,  11  Stat.  L.  272,  Rev.  Stat.,  §  740; 
act  of  February  24,  1863,  chap.  54,  §  9,  12  Stat.  L.  662,  U.  S.  Comp.  Stat., 
1901,  p.  588. 

In  what  district  suits  for  infringement  of  patents  to  be  brought.  Act  of 
March  3,  1897,  chap.  395,  29  Stat.  695,  U.  S.  Comp.  Stat.,  1901,  p.  589. 

19  Waterman  v.  Canal-Louisiana  Bank  &  Trust  Co.,  215  U.  S.  33,  54  L. 
ed. ,  30  Sup.  Ct. . 

20  Louisville,  New  Albany  &  Chicago  Ry.  Co.  v.  Louisville  Trust  Co.,  174 
U.  S.  552,  43  L.  ed.  1081,  19  Sup.  Ct.  821. 

21  Jenson  v,  Toltec  Ranch  Co.  (U.  S.  C.  C.  A.),  174  Fed.  86,  citing  Logan 
County  Bank  v.  Townsend,  139  U.  S.  67,  72,  77,  78,  11  Sup.  Ct.  496,  35  L. 

279 


§  1G3       JURISDICTION   OF   COURTS   OVER   CORPORATIONS 

§  163.  Equity  Jurisdiction — Adequate  Remedy  at  Law. 

The  NatioiiMl  courts  liave  jurisdiction  in  equity  in  the  ab- 
sence of  an  adequate  remedy  at  law  in  those  ^'ourts.  The  test 
of  their  equitable  jurisdiction  is  the  absence  of  such  remedy 
in  the  Federal  Courts.  The  presence  or  absence  of  a  remedy 
at  law  in  the  »State  Courts  is  not  the  test  of  the  jurisdiction  in 
equity  of  the  Federal  Courts.  The  equitable  jurisdiction  of  the 
Federal  Courts  vested  in  them  under  the  Judiciary  Act  of  1789, 
and,  where  it  has  not  been  subsequently  changed  by  act  of 
Congress,  the  test  of  that  jurisdiction  is  the  adequacy  of  the 
remedy  at  law  for  wrongs  of  the  character  under  consideration 
in  the  year  1789,  when  the  Judiciary  Act  was  adopted.^^    So 

ed.  107;  Central  Transportation  Co.  v.  Pullman's  Car  Co.,  139  U.  S.  24,  60, 
11  Sup.  Ct.  478,  35  L.  ed.  55;  Pullman's  Car  Co.  v.  Transportation  Co.,  171 
U.  S.  138,  150,  151,  18  Sup.  Ct.  808,  43  L.  ed.  108;  Planters'  Bank  v.  Union 
Bank,  16  Wall.  (83  U.  S.)  483,  21  L.  ed.  473:  Hovey's  Estate,  In  re,  198 
Pa.  St.  385,  48  Atl.  311,  315;  Dunlop  v.  Mercer,  156  Fed.  545,  553,  86  C.  C.  A. 
435,  443. 

22  Syllabus  in  National  Surety  Co.  v.  State  Bank,  120  Fed.  593. 

When  equity  has  jurisdiction- — remedy  at  law  inadequate,  see  the  following 
cases : 

United  States:  Union  Stock  Yards  Nat.  Bank  v.  Gillespie,  137  U.  S.  411, 
34  L.  ed.  724,  11  Sup.  Ct.  118,  4  Bkg.  L.  J.  175;  Kilbourne  v.  Sunderland, 
130  U.  S.  505,  32  L.  ed.  1005,  17  Wash.  L.  Rep.  278,  9  Sup.  Ct.  594;  Poke- 
gama  Sugar  Pine  Lumber  Co.  v.  Klamath  River  Lumber  &  I.  Co.  (U.  S.  C.  C), 
96  Fed.  34;  National  Bank  of  Commerce  v.  Allen  (U.  S.  C.  C),  90  Fed.  545, 
2  Denver  Leg.  Adv.  240,  33  C.  C.  A.  169,  61  U.  S.  App.  102,  9  Am.  &  Eng. 
Corp.  Cas.  (N.  S.)  429;  Southern  R.  Co.  v.  North  Carolina  R.  Co.  (U.  S.  C.  C), 
81  Fed.  595;  Pittsburg,  C.  &  St.  L.  R.  Co.  v.  Keokuk  &  H.  Bridge  Co.  (U.  S. 
C.  C),  68  Fed.  19;  Gunn  v.  Brinkley  Car  Works  &  Mfg.  Co.  (U.  S.  C.  C), 
13  C.  C.  A.  529,  66  Fed.  382;  North  British  &  M.  Ins.  Co.  v.  Lathrop  (C.  C. 
E.  D.  Va.),63Fed.  508. 

Alabama:  Merritt  v.  Ehrman,  116  Ala.  278,  22  So.  514. 

Illinois:  Higgins  v.  Lansingh,  154  111.  301,  40  N.  E.  362. 

Maine:  Porter  v.  Frenchman's  Bay  &  Mt.  D.  &  Land  &  W.  Co.,  84  Me. 
195,  54  Atl.  814. 

New  York:  American  Sugar  Refining  Co.  v.  Fancher,  145  N.  Y.  552,  65 
N.  Y.  St.  R.  506,  40  N.  E.  206,  27  L.  R.  A.  757,  rev'g  81  Hun,  56,  62  N.  Y. 
St.  R.  249,  9  Nat.  Corp.  Rep.  383,  30  N.  Y.  Supp.  482. 

Pennsylvania:  Conemaugh  Gas  Co.  v.  Jackson  Farm  Gas  Co.,  186  Pa. 
443,  29  Pitts.  L.  J.  (N.  S.)  136,  40  Atl.  1000;  Boyd  v.  American  Carbon 
Black  Co.,  182  Pa.  206,  37  Atl.  9.37,  40  W.  N.  C.  459. 

When  equity  will  not  take  jurisdiction — remedy  at  law  adequate,  see  the 
following  cases: 

280 


JURISDICTION    OF   COURTS   OVER  CORPORATIONS        §  163 

it  is  held  in  another  case  that  the  adequacy  or  inadequacy  of 
a  remedy  at  law  for  the  protection  of  the  rights  of  one  entitled 
upon  any  ground  to  invoke  the  powers  of  a  Federal  Court,  is 
not  to  be  conclusively  determined  by  the  statutes  of  the 
particular  State  in  which  suit  may  be  brought.  One  who  is 
entitled  to  sue  in  the  Federal  Circuit  Court  may  invoke  its 
jurisdiction  in  equity  whenever  the  established  principles  and 
rules  of  equity  permit  such  a  suit  in  that  court;  and  he  cannot 
be  deprived  of  that  right  by  reason  of  his  being  allowed  to 
sue  in  a  State  Court  on  the  same  cause  of  action .^^ 

Equity  does  not  now  take  jurisdiction  in  cases  of  fraud 
where  the  relief  properly  obtainable  on  that  ground  can  be 
obtained  in  a  court  of  law,  and  where,  so  far  as  necessary, 
discovery  may  be  obtained  as  well  as  in  equity.-'* 

United  States:  Washington  Market  Co.  v.  District  of  Columbia,  172  U.  S. 
361,  43  L.  ed.  478,  19  Sup.  Ct.  218,  aff'g  6  App.  D.  C.  34,  23  Wash.  L.  Rep. 
213;  Smyth  v.  New  Orleans  Canal  &  Bkg.  Co.,  141  U.  S.  656,  35  L.  ed.  891, 
12  Sup.  Ct.  113;  Safe  Deposit  &  Trust  Co.  of  Baltimore  v.  City  of  Anniston 
(U.  S.  C.  C),  96  Fed.  661;  Sigua  Iron  Co.  v.  Clark  (U.  S.  C.  C),  77  Fed.  496; 
National  Park  Bank  v.  Peavey  (U.  S.  C.  C),  64  Fed.  912;  International 
Trust  Co.  V  Cartersville  Improvement  G.  &  W  Co.  (U.  S.  C.  C),  63  Fed. 
341 ;  United  States  Bank  v.  Lyon  County  (U.  S.  C.  C),  46  Fed.  514;  American 
Cable  R.  Co.  v.  Citizens'  R.  Co.  (U.  S.  C.  C.  ),  44  Fed.  484;  Manchester  F. 
Assur.  Co.  V.  Stockton  Combined  Harvester  &  Agri.  Works  (U.  S.  C.  C),  38 
Fed.  378. 

Alabama:  Farmers'  &  M.  Bank  v.  Hall,  120  Ala.  14,  24  So.  347. 

Arkansas:  Davis  v.  Arkansas  F.  Ins.  Co.,  63  Ark.  412,  39  S.  W.  258. 

California:  Myers  v.  Sierra  Valley  S.  &  A.  Assoc,  122  Cal.  669,  55  Pac. 
689. 

New  Hampshire:  Boston,  C.  &  M.  R.  Co.  v.  Boston  &  L.  R.  Co.,  65  N.  H. 
393,  23  Atl.  529. 

Pennsylvania:  Salisbury  Gas  Co.  v.  Salisbury,  138  Pa.  250,  21  Pitts.  L. 
J.  (N.  S.)  148,  48  Phila.  Leg.  Int.  149,  27  W.  N.  C.  120,  20  Atl.  844,  10  L. 
R.  A.  193;  Sanderson  v.  Whitmeyer  (C.  P.),  2  Dauph.  Co.  Rep.  174,  8  Pa. 
Dist.  Rep.  312. 

West  Virginia:  Thompson  v.  Whittaker  Iron  Co.,  41  W.  Va.  574,  23  S.  E. 
795. 

23  Smyth  v.  Ames,  169  U.  S.  466,  42  L.  ed.  819,  18  Sup.  Ct.  418,  30  Chicago 
Leg.  News,  243,  171  U.  S.  361,  18  Sup.  Ct.  888,  43  L.  ed.  497. 

2<  Equitable  Life  Assur.  Soc.  v.  Brown,  213  U.  S.  25,  53  L.  ed.  682,  29 
Sup.  Ct.  404;  rev'g  151  Fed.  1;  United  States  v.  Bitter  Root  Co.,  200  U.  S. 
451,  50  L.  ed.  550,  26  Sup.  Ct.  318,  Rev.  Stat.,  §  724. 

See  the  following  cases:  Smyth  v.  New  Orleans  Canal  &  Bkg.  Co.,  141 

281 


§  164       JURISDICTION    OF   COURTS   OVER   CORPORATIONS 

§  164.  Equity  Jurisdiction— Adequate  Remedy  at  Law- 
Collection  of  Taxes —Injunction. 

Where  a  corporation  has  paid  the  full  amount  of  its  tax  as 
based  upon  the  same  rate  as  that  levied  upon  other  property 
of  the  same  class,  equity  will  restrain  the  collection  of  the 
excess  illegally  assessed,  there  being  no  adequate  remedy  at 
law,  when  it  appears  that  it  would  require  a  multiplicity  of 
suits  against  the  various  taxing  authorities  to  recover  the  tax 
and  that  a  portion  of  it  would  go  to  the  State  against  which 
no  action  would  lie,  and  where  the  amount  is  so  great  that  its 
payment  would  cause  insolvency,  and  a  levy  upon  the  property 
of  a  street  car  system,  and  embarrass  and  injure  the  public.^^ 
But  the  collection  of  taxes  under  authority  of  a  State  will  not 
be  enjoined  by  a  court  of  the  United  States  on  the  sole  ground 
that  the  tax  is  illegal,  but  it  must  appear  that  the  party  taxed 
has  no  adequate  remedy  by  the  ordinary  processes  of  the  law, 
and  that  there  are  special  circumstances  bringing  the  case 
within  some  recognized  head  of  equity  jurisdiction.^^ 

In  a  comparatively  recent  case  in  the  United  States  Supreme 
Court  it  appeared  that  a  bill  in  equity  had  been  brought  by  a 
West  Virginia  corporation  against  a  city  in  Idaho,  in  the  Fed- 
eral Circuit  Court  for  the  District  of  Idaho,  to  obtain  an  in- 
junction against  the  enforcement  of  an  ordinance,  and  the 
following  points  were  decided:  (1)  Equity  will  not  interpose 
where  there  is  a  remedy  at  law  which  is  as  complete,  practicable 
and  adequate  as  equity  could  afford.  (2)  As  the  defense  of  the 
unconstitutionality  and  illegality  of  a  tax  is  open  in  a  court  of 
law,  injunction  should  not  issue  against  the  enforcement  of 
the  tax  merely  because  it  is  unconstitutional  or  illegal  unless 

U.  S.  656,  35  L.  ed.  891,  12  Sup.  Ct.  113;  Smith  v.  American  Nat.  Bank,  89 
Fed.  832,  60  U.  S.  App.  431,  32  C.  C.  A.  368;  Western  Assiir.  Co.  v.  Ward, 
75  Fed.  338,  41  U.  S.  App.  443;  Moffett  H.  &  C.  Co.  v.  Rochester  (U.  S.  C.  C), 
4  Det.  L.  News,  22,  30  Chicago  Leg.  News,  11,  82  Fed.  255;  Darrah  v.  Boyce, 
62  Mich.  4S0,  29  N.  W.  102. 

25  Raymond  v.  Chicago  Union  Traction  Co.,  207  U.  S.  20,  28  Sup.  Ct.  7, 
52  L.  ed.  7. 

2«  Arkansas  Building  &  Loan  Ass'n  v.  Madden,  175  U.  S.  269,  44  L.  ed. 
159,  20  Sup.  Ct.  119. 
282 


JURISDICTION    OF   COURTS   OVER   CORPORATION'S    §§  165,  166 

other  circumstances  bring  the  case  within  some  clear  ground 
of  equity  jurisdiction.  (3)  Even  though  some  States  may  for 
convenience  of  remedy  permit  equity  to  enjoin  the  coUection 
of  a  tax  for  mere  illegahty,  courts  of  a  different  and  paramount 
sovereignty  should  not  do  so,  and  Federal  Courts  should  not 
interfere  by  injunction  with  the  fiscal  arrangements  of  a  State 
if  the  rights  involved  can  be  preserved  in  any  other  manner. 
(4)  A  municipality  speaks  through  its  council,  and  where  the 
bill  does  not  allege  any  facts  showing  threats  to  remove  prop- 
erty of  a  complainant  public  service  corporation  such  action 
will  not  be  presumed  so  as  to  give  equity  jurisdiction.  (5)  A 
suit  at  law  by  a  municipality  to  collect  a  license  fee  imposed 
by  ordinance  on  a  public  service  corporation  contemplates 
continuance  and  not  restraint,  of  the  business  of  such  corpora- 
tion, and,  as  the  defense  of  unconstitutionality  of  the  ordinance 
is  open  in  that  suit,  equity  should  not  interfere.  (6)  Equity 
should  not  enjoin  the  collection  of  a  tax  on  the  ground  of  cloud 
on  title  when  the  tax  can  only  be  collected  by  a  suit  at  law  in 
which  the  defense  of  its  illegality  is  open,  and  it  does  not  appear 
that  the  tax  is  a  lien  on  any  of  complainant's  property .^^ 

§  165.  Equity  Jurisdiction — Waiver  of  Defense  of  Rem- 
edy at  Law. 

The  defense  in  an  equity  suit  that  the  complainant  has  not 
exhausted  his  remedy  at  law  may  be  waived  by  defendant, 
and  when  waived,  as  it  may  be  by  consenting  to  the  appoint- 
ment of  receivers,  the  case  stands  as  though  the  objection  never 
existed.^* 

§  166.  Equity   Jurisdiction   of   Federal    Courts— Parties. 

While  a  Federal  court  of  equity  cannot,  either  under  the 
forty-seventh  rule  in  equity  or  general  principles  of  equity, 
proceed  to  adjudication  in  the  absence  of  indispensable  parties, 

27  Boise  Artesian  Water  Co.  v.  Boise  City,  21.3  U.  S.  276,  53  L.  ed.  796, 
29  Sup.  Ct.  426. 

28  Metropolitan  Railway  Receivership,  In  re,  208  U.  S.  90,  52  L.  ed.  403, 
28Sup.  Ct.  219. 

283 


§  166       JURISDICTION   OF   COURTS   OVER   CORPORATIONS 

if  it  can  do  justice  to  the  parties  before  it  without  injury  to 
absent  persons  it  will  do  so  and  shape  the  decree  so  as  to 
preserve  the  rights  of  those  actually  before  the  court,  without 
])rejudice  to  the  rights  of  the  absentees.^^    The  general  rule  in 

29  Waterman  v.  Canal-Louisiana  Bank  &  Trust  Co.,  215  U.  S.  33,  54  L.  ed. 
— ,  30  Sup.  Ct.  — .  In  this  case  the  absent  party  was  not  of  the  same  State 
as  complainant  and  had  no  interest  in  common  with  complainant  and  while 
a  proper,  was  not  an  indispensable  party,  as  his  interests  were  separate  and 
could  be  protected  by  retention  of  his  legacy  by  the  executors  subject  to 
adjudication  in  another  suit.  The  court,  per  Mr.  Justice  Day,  said:  "Sec- 
tion 737  of  the  Revised  Statutes  of  the  United  States  provides:  '  When  there 
are  several  defendants  in  any  suit  at  law  or  in  equity,  and  one  or  more  of 
them  are  neither  inhabitants  of  nor  found  within  the  district  in  which  the 
suit  is  brought,  and  do  not  voluntarily  appear,  the  court  may  entertain 
jurisdiction,  and  proceed  to  the  trial  and  adjudication  of  the  suit  between 
the  parties  who  are  properly  before  it;  but  the  judgment  or  decree  rendered 
therein  shall  not  conclude  or  prejudice  other  parties  not  regularly  served 
with  process  nor  voluntarily  appearing  to  answer.' 

"To  the  same  effect  is  the  forty-seventh  equity  rule.  This  statute  and 
rule  permit  the  court  to  proceed  with  the  trial  and  adjudication  of  the  suit, 
as  between  parties  who  are  properly  before  it,  and  preserves  the  rights  of 
parties  not  voluntarily  appearing,  providing  their  rights  are  not  prejudiced 
by  the  decree  to  be  rendered  in  the  case.  This  rule  has  been  said  to  be 
declaratory  of  the  already-established  equity  practice.  Shields  v.  Barrow, 
17  How.  (58  U.  S.)  130,  15  L.  ed.  158;  1  Street's  Federal  Equity  Practice, 
§  533,  and  cases  there  cited.  This  rule  does  not  permit  a  Federal  Court  to 
proceed  to  a  decree  in  that  class  of  cases  in  which  there  is  an  absence  of 
indispensable,  as  distinguished  from  proper,  or  even  necessary  parties,  for 
neither  the  absence  of  formal,  or  such  as  are  commonly  termed  necessary 
parties,  will  defeat  the  jurisdiction  of  the  court;  provided,  in  the  case  of 
necessary  parties,  their  interests  are  such  and  so  far  separable  from  those 
of  parties  before  the  court,  that  the  decree  can  be  so  shaped  that  the  rights 
of  those  actually  before  the  court  may  be  determined  without  necessarily 
affecting  other  persons  not  within  the  jurisdiction.  After  pointing  out  that 
there  may  be  formal  parties,  of  whose  omission  the  court  takes  no  account, 
Mr.  Justice  Miller,  in  delivering  the  opinion  in  Barney  v.  Baltimore,  6  Wall. 
(73  U.  S.)  280,  went  on  to  say: 

"  'There  is  another  class  of  persons  whose  relations  to  the  suit  are  such 
that  if  their  interests  and  their  absence  are  formally  brought  to  the  attention 
of  the  court,  it  will  require  them  to  be  made  parties,  if  within  its  jurisdiction, 
before  deciding  the  case.  But  if  this  cannot  be  done,  it  will  proceed  to 
administer  such  relief  as  may  be  in  its  power  between  the  parties  before  it. 
And  there  is  a  third  class  whose  interests  in  the  subject-matter  of  the  suit 
and  in  the  relief  sought  are  so  bound  up  with  that  of  the  other  parties  that 
their  legal  presence  as  parties  to  the  proceeding  is  an  absolute  necessity, 
without  which  the  court  cannot  proceed.     In  such  cases  the  court  refuses 

284 


JURISDICTION    OF   COURTS    OVER   CORPORATIONS        §  106 

equity  is  that  all  persons  materially  interested,  either  legally 
or  beneficially,  in  the  subject-matter  of  a  suit  are  to  be  made 
parties  to  it;  and  the  established  practice  of  courts  of  equity- 
is  to  dismiss  the  plaintiff's  bill  if  it  appears  that  the  relief 
prayed  for  would  injuriously  affect  persons  materially  inter- 
ested in  the  subject-matter  who  are  not  made  parties  to  the 
suit,  is  founded  upon  clear  reasons,  and  may  be  enforced  by 
the  court  sua  sponte,  though  not  raised  by  the  pleadings  or 
suggested  by  counsel.  So  when  it  appears  to  a  court  of  equity 
that  a  case,  otherwise  presenting  ground  for  its  action,  cannot 
be  dealt  with  because  of  the  absence  of  essential  parties;  and 
it  further  appears  that  necessary  and  indispensable  parties 
are  beyond  the  reach  of  the  jurisdiction  of  the  court,  or  that 
when  made  parties,  the  jurisdiction  of  the  court  will  thereby 
be  defeated,  it  would  be  useless  for  the  court  to  grant  leave  to 
amend. ^° 

to  entertain  the  suit  when  these  parties  cannot  be  subjected  to  its  juris- 
diction.' 

"The  relation  of  an  indispensable  party  to  the  suit  must  be  such  that  no 
decree  can  be  entered  in  the  case  which  will  do  justice  between  the  parties 
actually  before  the  court  without  injuriously  affecting  the  rights  of  such 
absent  party.     1  Street's  Fed.  Equity  Practice,  §  519. 

"If  the  court  can  do  justice  to  the  parties  before  it  without  injuring 
absent  persons  it  will  do  so,  and  shape  its  relief  in  such  a  manner  as  to 
preserve  the  rights  of  the  persons  not  before  the  court.  If  necessary,  the 
court  may  require  that  the  bill  be  dismissed  as  to  such  absent  parties,  and 
may  generally  shape  its  decrees  so  as  to  do  justice  to  those  made  parties 
without  prejudice  to  such  absent  persons.  Payne  v.  Hook,  7  Wall.  (74  U.  S.) 
425,  19  L.  ed.  260."  The  principal  case  was  a  question  of  jurisdiction 
concerning  the  right  of  the  Federal  Circuit  Court  to  entertain  a  bill  in  equity 
brought  by  residents  and  citizens  of  Illinois  against  a  bank  and  trust  com- 
pany, a  citizen  and  inhabitant  of  Louisiana,  and  also  certain  institutions, 
inhabitants  of  said  State  and  established  under  its  laws  also  against  other 
citizens  and  inhabitants,  natural  persons,  of  said  State;  also  against  a 
natural  person  residing  in  a  State  outside  the  court's  jurisdiction. 

30  Minnesota  v.  Northern  Securities  Co.,  184  U.  S.  199,  22  Sup.  Ct.  308, 
46  L.  ed.  299.  The  bill  disclosed  in  this  case  that  the  parties  to  be  affected 
by  the  decision  of  the  controversy  were,  directly,  the  State  of  Minnesota, 
the  Great  Northern  Railway  Company,  and  the  Northern  Pacific  Railway 
Company,  corporations  of  that  State,  and  the  Northern  Securities  Company, 
a  corporation  of  the  State  of  New  Jersey;  and,  indirectly,  the  stockholders 
and  bondholders  of  those  corporations,  and  of  the  numerous  railway  com- 
panies whose  lines  were  alleged  to  be  owned,  managed  or  controlled  by  the 

285 


§    1()7        JliRlSUK'TJON    OF    COURTS    OVER    CORrORATIONS 

§  167.  Equity  Jurisdiction  to  Remove  Cloud  Upon,  or 
to  Quiet  Title. 

Equity  has  jurisdiction  to  remove  a  cloud  from  and  quiet 
title  to  real  estate,  and  any  deed,  devise,  or  other  instrument, 
judgment  or  decree,  not  void  on  its  face,  which  purports  to 
convey  any  interest  in  or  makes  any  charge  upon  land  of  the 
true  owner,  the  invalidity  of  which  requires  proof  by  extrinsic 
evidence,  is  a  cloud  upon  the  legal  title  of  the  owner  in  posses- 
sion; so,  any  pretended  conveyance  which,  if  left  undisturbed 
may  ripen  into  a  perfect  title,  must  necessarily  create  a  cloud 
upon  the  true  title,  under  the  laws  of  West  Virginia,  and  a 
suit  may  be  maintained  in  a  Federal  Court  there  for  the  can- 
cellation of  such  instrument  and  this  applies  to  deeds  executed 
to  each  other  and  caused  to  be  recorded  by  members  of  an 
organization  in  furtherance  of  an  alleged  fraudulent  conspiracy, 
and  defendants  only  possession  is  alleged  to  be  that  of  tenants 
of  the  complainant  who  is  absolute  owner  of  the  land.^^  A 
bill  in  equity  in  Indiana  which  avers  that  a  deed  is  void  on  its 
face,  and  an  answer  which  does  not  deny  the  averment,  will 
support  the  jurisdiction  of  the  Federal  Circuit  Court  in  that 
district  to  quiet  the  title  of  complainant  as  against  the  deed.^' 
So  a  bill  which  charges  that  the  collection  of  an  illegal  tax 
would  involve  the  plaintiff  in  a  multiphcity  of  suits  as  to  the 
title  of  lots  being  laid  out  and  sold,  which  would  prevent  their 

Great  Northern  and  Northern  Pacific  Railway  Companies;  and  it  was 
obvious  that  the  rights  of  the  minority  stockholders  of  the  two  railroad 
companies  were  not  represented  by  the  Northern  Securities  Company. 

31  Acord  V.  Western  Pocahontas  Corporation  (U.  S.  C.  C),  156  Fed.  989, 
citing  Smith  v.  O'Keefe,  43  W.  Va.  172,  27  S.  E.  383;  Waldron  v.  Harvey, 
54  W.  Va.  608,  46  S.  E.  603  (syl.  21);  102  Am.  St.  R.  959;  Robinson  v. 
Lowe,  50  W.  Va.  75,  40  S.  E.  454;  Bennett  v.  Pierce.  50  W,  Va.  604,  40 
S.  E.  395;  Ambler  v.  Leach,  15  W,  Va.  677;  Garrett  v.  Ramsay,  26  W.  Va. 
345;  Moore  v.  McNutt,  41  W,  Va.  695,  24  S.  E.  682. 

Where  land  or  other  subject-matter  of  a  fixed  character  lies  in  different 
districts  of  same  State.  Act  May  4,  1858,  chap.  27,  §  2,  11  Stat,  at  L.  27, 
§  742,  Rev.  Stat,  U.  S.  Comp.  Stat.  1901,  p.  588.  See  act  March  3,  1875, 
chap.  137,  §  8. 

32  Reynolds  v.  Crawfordsville  First  Nat.  Bank,  112  U.  S.  405,  5  Sup.  Ct. 
213,  28  L.  ed.  733,  aff'g  Holland  v.  Challen,  110  U.  S.  15,  28  L.  ed.  52,  3 
Sup.  Ct.  495. 

286 


JURISDICTION   OF   COURTS   OVER   COHI'ORATIONS        §  llig 

sale,  and  which  would  cloud  the  title  to  all  its  real  estate,  states 
a  case  for  relief  in  equity.^^  AMiere  the  attitude  and  claims  of 
a  municipality  cast  a  cloud  upon  the  title  to  property  con- 
sisting largely  of  franchises  in  the  hands  of  receivers  and  to  be 
administered  under  orders  of  the  court,  the  receivers  may, 
with  the  authority  of  the  court,  proceed  by  ancillary  bill  to 
protect  the  jurisdiction  and  right  to  administer  the  property, 
and  to  determine  the  validity  of  claims  of  parties  which  cast  a 
cloud  upon  such  franchises,  and  in  such  case  it  is  proper  to 
grant  an  injunction  until  the  rights  of  parties  can  be  deter- 
mined.^'* Although  a  State  statute  may  have  enlarged  the  or- 
dinary equitable  action  to  quiet  title  and  remove  a  cloud,  the 
Federal  Circuit  Court  sitting  in  that  district  may  take  juris- 
diction of  a  bill  properly  brought  under  its  provisions.^ 

§  168.  Jurisdiction  of  Federal  Circuit  Court  to  Remove 
Incumbrance  or  Lien  or  Cloud  Upon  Title  to  Property 
Within  District— Absent  Defendants— Process— Service  — 
Publication. 

The  repealing  section  of  the  Judiciary  Act  of  1887-1888,  did 
not  reach  §  8  of  the  act  of  1875,^^  and  that  section  is  still  in 

33  Union  Pacific  Ry.  Co.  v.  Cheyenne,  113  U.  S.  516,  28  L.  ed.  1098,  5 
Sup.  Ct.  601. 

34  Blair  v.  Chicago,  201  U.  S.  400,  26  Sup.  Ct.  427,  50  L.  ed.  801,  rev'g 
132  Fed.  848. 

36  Bardon  v.  Land  &  River  Imp.  Co.,  157  U.  S.  327,  39  L.  ed.  719,  15 
Sup.  Ct.  650. 

36  Act  of  March  3,  1875,  §  8,  chap.  137,  18  Stat.  470,  472,  U.  S.  Comp.  Stat., 
p.  513.  By  this  section  determining  the  jurisdiction  of  the  Circuit  Courts 
of  the  United  States,  it  was  provided:  "That  when  in  any  suit,  commenced 
in  any  Circuit  Court  of  the  United  States,  to  enforce  any  legal  or  equitable 
lien  upon,  or  claim  to,  or  to  remove  any  incumbrance  or  lien  or  cloud  upon 
the  title  to  real  or  personal  property  within  the  district  where  such  suit  is 
brought,  one  or  more  of  the  defendants  therein  shall  not  be  an  inhabitant 
of,  or  found  within,  the  said  district,  or  shall  not  voluntarily  appear  thereto, 
it  shall  be  lawful  for  the  court  to  make  an  order  directing  such  absent  de- 
fendant or  defendants  to  appear,  plead,  answer,  or  demur,  by  a  day  certain 
to  be  designated,  which  order  shall  be  served  on  such  absent  defendant  or 
defendants,  if  practicable,  wherever  found,  and  also  upon  the  person  or 
persons  in  possession  or  charge  of  said  property,  if  any  there  be;  or  where 
such  personal  service  upon  such  absent  defendant  or  defendants  is  not 

287 


§  108       JURISDICTION    OB^   COURTS   OVER   CORPORATIONS 

force.  And  a  suit  brought  by  owners  of  stock  of  a  railroad 
company  for  the  cancellation  of  deeds  and  leases  under  and  by 
authority  of  which  the  properties  of  the  company  are  held 
and  managed  is  a  suit  within  the  meaning  of  said  §  8,  as  one  to 
remove  incumbrances  or  clouds  upon  rent  or  personal  prop- 
erty and  local  to  the  district  and  within  the  jurisdiction  of  the 
Circuit  Court  for  the  district  in  which  the  property  is  situated 
without  regard  to  the  citizenship  of  defendants  so  long  as  di- 
verse to  that  of  the  plaintiff,  and  foreign  defendants  not  found 
can  be  brought  in  by  order  of  the  court  subject  to  the  condition 
prescribed  by  that  section,  that  any  adjudication  affecting 
absent,  nonappearing  defendants  shall  affect  only  property 
within  the  districts  as  may  be  the  subjects  of  the  suit  and  un- 
der the  jurisdiction  of  the  court .^^    In  another  case  a  suit  was 

practicable,  such  order  shall  be  published  in  such  manner  as  the  court  may 
direct,  not  less  than  once  a  week  for  six  consecutive  weeks;  and  in  case  such 
absent  defendant  shall  not  appear,  plead,  answer,  or  demur  within  the 
time  so  limited,  or  within  some  further  time  to  be  allowed  by  the  court,  in 
its  discretion,  and  upon  proof  of  the  service  or  publication  of  said  order, 
and  of  the  performance  of  the  directions  contained  in  the  same,  it  shall  be 
lawful  for  the  court  to  entertain  jurisdiction,  and  proceed  to  the  hearing 
and  adj  udication  of  such  suit  in  the  same  manner  as  if  such  absent  defendant 
had  been  served  with  process  within  the  said  district;  but  said  adjudication 
shall,  as  regards  said  absent  defendant  or  defendants  without  appearance, 
affect  only  the  property  which  shall  have  been  the  subject  of  the  suit  and 
under  the  jurisdiction  of  the  court  therein,  within  such  district,"  etc.,  with 
certain  rights  reserved  to  the  defendant  saved  from  repeal  by  act  of  March  3, 

1887,  24  Stat.  552,  555,  chap.  373,  as  corrected  by  §  5  of  act  of  August  13, 

1888,  25  Stat.  433,  436,  chap.  866.  "These  provisions"  of  the  above  section 
"  were  substantially  those  embodied  in  §  738  of  the  Revised  Statutes,  except 
that  the  act  of  1875  embraced  (as  §  738  did  not)  suits  in  equity  'to  remove 
any  encumbrance  or  lien  or  cloud  upon  the  title  to  real  or  personal  property.' 
Both  §  738  and  the  act  of  1875  related  to  legal  and  equitable  liens  or  claims 
on  real  and  personal  property  within  the  district  where  the  suit  was  brought," 
per  Mr.  Justice  Harlan  in  the  Citizens'  Trust  Company  case  cited  below. 

37  Citizens'  Saving  &  Trust  Co.  v.  Illinois  Central  Rd.  Co.,  205  U.  S.  46, 
51  L.  ed.  703,  27  Sup.  Ct.  425.  The  court,  per  Mr.  Justice  Harlan  (at  pp.  54- 
57),  considers  Jellenik  v.  Huron  Copper  Mining  Co.,  177  U.  S.  1,  44  L.  ed. 
647,  20  Sup.  Ct.  559;  Mellen  v.  Moline  Malleable  Iron  Works,  131  U.  S. 
352,  9  Sup.  Ct.  781,  33  L.  ed.  178,  and  also  cites  Dick  v.  Foraker,  155  U.  S. 
404,  15  Sup.  Ct.  124,  39  L.  ed.  201,  and  says:  "These  decisions,  we  think, 
make  it  clear  that  this  suit  comes  within  the  act  of  1S75,  as  one  to  remove 
an  incumbrance  or  cloud  upon  the  title  to  real  property  within  the  Eastern 

288 


JURISDICTION    OF    COUKT.S    OXl'Ai   C(JKI'ORATIONS        §  168 

brought  in  the  Circuit  Court  of  the  United  States  for  the  West- 
ern District  of  Michigan  by  parties,  citizens  of  other  States 
than  Micliigan,  against  a  Michigan  mining  corporation  and 
certain  individual  defendants  holding  shares  of  stock  in  that 
corporation  and  being  citizens  residing  in  Massachusetts.  The 
plaintiffs  claimed  that  they  were  the  real  owners  of  certain 
shares  of  stock  of  the  corporation  the  certificates  of  which  were 
held  by  the  Massachusetts  defendants,  and  sought  a  decree 
removing  the  cloud  upon  their  title  to  such  shares.  It  was 
held  that  the  defendants,  citizens  of  Massachusetts,  were  nec- 
essary parties  to  the  suit;  that  they  could  be  proceeded  against 
in  respect  of  the  stock  in  question  in  the  mode  and  for  the 
limited  purposes  indicated  in  the  eighth  section  of  the  act  of 

District  of  Illinois.  The  railroad  in  question  is  wholly  within  that  district, 
although  the  defendant  corporations,  including  the  Belleville  Company, 
may  hold  their  annual  or  other  meetings  in  Chicago.  The  bill  seeks  the 
cancellation  of  the  deeds  and  leases  under  and  by  authority  of  which  the 
Belleville  Company  are  held  and  managed  in  the  interest,  as  is  alleged,  of 
the  Illinois  Central  Railroad  Company,  and  to  the  de.struction  of  the  rights 
of  the  stockholders  of  the  Belleville  Company.  *  *  *  jf  ^^g  deeds  and 
leases  in  question  are  adjudged  to  be  void,  the  entire  situation,  as  to  the 
possession  and  control  of  the  Belleville  railroad  properties,  will  be  changed, 
and  the  alleged  incumbrances  upon  the  properties  of  the  Belleville  Com- 
pany will  be  removed.  *  *  *  -pj^g  only  inquiry  now  is  whether,  looking 
at  the  allegations  of  the  bill,  the  suit  is  of  such  a  nature  as  to  bring  it  within 
the  act  of  1875,  as  one  to  remove  incumbrances  or  clouds  upon  real  or  personal 
}>ro]>crty  within  the  district  where  the  suit  wat^  brought,  and,  therefore,  one  local 
to  such  district.  The  court  below  held  that  the  suit  was  not  one  which  could 
be  Ijrought  and  maintained  against  the  defendant  corporations  found  to 
be  inhabitants  of  another  district  and  not  voluntarily  appearing  in  the  suit; 
and  this,  notwithstanding  the  railroad  in  question  is  wholly  within  the 
district  where  the  suit  was  brought.  18  Stat.  472,  25  Stat.  436.  If  the  suit 
was  within  the  terms  of  the  act  of  1875,  then  the  Circuit  Court  of  the  Eastern 
District  of  Illinois,  although  the  defendant  corporations  may  be  inhal:)itants 
of  another  district  in  Illinois,  could  proceed  to  such  an  adjudication  as  the 
facts  would  justify,  subject,  of  course,  to  the  condition  prcscril^ed  by  the 
eighth  section  of  that  act,  that  any  adjudication,  affecting  absent  defend- 
ants without  appearance,  should  affect  only  such  property  within  the 
district  as  may  be  the  subject  of  the  suit  and  under  the  jurisdiction  of  the 
court.  *  *  *  \Yg  adjudge  that  the  suit  is  of  such  a  nature  as  to  bring 
it  within  the  jurisdiction  of  the  Circuit  Court  for  the  Eastern  District,  under 
the  act  of  1875.  The  judgment  must,  therefore,  be  reversed  and  the  cause 
remanded  that  the  plaintiff'  may  proceed,  as  it  may  be  advised,  with  the 
preparation  of  its  case  under  the  act  of  1875." 

19  289 


§  168       JURISDICTION    OF   COURTS   OVER   CORPORATIONS 

Congress  of  1875^*  which  authorized  proceedings  b}^  publica- 
tion against  absent  defendants  in  any  suit  commenced  in  any 
Circuit  Court  of  the  United  States  to  enforce  any  legal  or 
equitable  lien  upon,  or  claim  to,  or  to  remove  any  incumbrance 
or  lien  or  cloud  upon  the  title  to    real  or  personal  property 
within  the  district  where  such  suit  is  brought;  and  that  for  the 
purposes  of  said  act  the  stock  held  by  the  citizens  of  Massa- 
chusetts was  to  be  deemed  personal   property   "within  the 
district"  where  the  suit  was  brought.    The  certificates  of  stock 
were  only  evidence  of  the  ownership  of  the  shares,  and  the 
interest  represented  by  the  shares  was  held  by  the  company 
for  the  benefit  of  the  true  owner.    And  as  the  habitation  or 
domicile  of  the  company  is  and  must  be  in  the  State  that  created 
it,  the  property  represented  by  its  certificates  of  stock  may  be 
deemed  to  be  held  by  the  company  within  the  State  whose 
creature  it  is,  whenever  it  is  sought  by  suit  to  determine  who 
is  its  real  owner.^^    Again,  a  suit  instituted  by  a  creditor  of  a 
corporation,  on  his  own  behalf  and  on  behalf  of  other  unse- 
cured creditors,  to  set  aside  a  conveyance  of  its  real  estate  and 
a  mortgage  of  its  personal  property,  both  made  by  the  corpo- 
ration in  trust  to  secure  certain  preferred  creditors,  including 
among  them  a  director  of  the  corporation,  and  also  to  procure 
a  dissolution  of  the  corporation,  and  the  closing  up  of  its  busi- 
ness, is  a  suit  brought  to  remove   an  incumbrance  or  lien  or 
cloud  upon  the  title  to  such  property  within  the  meaning  of 
the  act  of  Congress  of  1875,  authorizing  a  Circuit  Court  of  the 
United  States  to  summon  in  an  absent  defendant  and  to  ex- 
ercise jurisdiction  over  his  rights  in  the  property  in  suit  within 
the  jurisdiction  of  the  court;  nor  is  it  necessary  that  the  creditor 
of  an  insolvent  corporation  should  obtain  judgment  on  his 
claim,  and  take  out  execution  and  exhaust  his  remedies  at  law, 
in  order  to  invoke  the  jurisdiction  of  a  court  of  equity  in  his 
favor  to  remove  an  incumbrance  or  cloud  or  lien  upon  the  title 
of  the  corporation's  property  under  said  statute.''" 

38  Act  of  March  3,  1875,  18  Stat.  470,  chap.  137,  §  8,  given  in  note  above, 
swjellenik  v.  Huron  Copper  Mining  Co.,  177  U.  S.  1,  20  Sup.  Ct.  559, 
44  L.  ed.  647. 
<o  Mellen  v.  Moline  Malleable  Iron  Works,  131  U.  S.  352,  33  L.  ed.  178, 

29J 


JURISDICTION    OF   COURTS   OVER  CORPORATIONS    §§  109,  170 

§  169.  Equity  Jurisdiction  of  Federal  Circuit  Courts- 
Probate  Matters— Diverse  Citizenship. 

While  Federal  Courts  cannot  seize  and  control  pro[)erty 
which  is  in  the  possession  of  the  State  Courts  and  have  no  ju- 
risdiction of  a  purely  probate  character,  they  can,  as  Courts 
of  Chancery,  exercise  jurisdiction  where  proper  diversity  of 
citizenship  exists,  in  favor  of  creditors,  legatees  and  heirs,  to 
estabhsh  their  claims  and  have  a  proper  execution  of  the  trust 
as  to  them.  And  although  a  complainant  asks  in  some  of  the 
prayers  for  relief  which  is  beyond  the  jurisdiction  of  the  court 
as  being  of  a  purely  probate  character,  if  the  allegations  of  the 
bill  support  them  the  court  may  grant  other  prayers  for  relief 
which  are  within  its  jurisdiction,  and,  as  a  court  of  equity, 
shape  its  decree  according  to  the  equity  of  the  case.  Again, 
where  the  bill  does  not  seek  to  set  aside  the  probate  of  a  will  or 
interfere  with  the  possession  of  the  Probate  Court,  the  Federal 
Court  of  Equity,  in  a  case  where  diverse  citizenship  exists, 
may  determine  as  between  the  parties  before  the  court  their 
interest  in  the  estate,  and  such  decree  will  be  binding  upon, 
and  may  be  enforced  against,  the  executor.  It  will  be  assumed 
that  the  State  Probate  Court  will  respect  the  decree  of  the 
Federal  Court  having  jurisdiction  settling  the  rights  of  parties 
in  an  estate,  and  the  denial  of  effect  of  such  decree  presents 
a  claim  of  Federal  right  which  can  be  protected  by  the  Federal 
Supreme  Court  .^^ 

§  170.  When  Equity  Has  no  Jurisdiction  of  Bill  to 
Recover  Lands  of  Railroad  Company. 

A  court  of  equity  has  no  jurisdiction  of  a  bill  to  recover  lands 

held  as  property  of  a  railroad  company  under  a  foreclosure 

9  Sup.  Ct.  781;  act  of  March  3,  1875,  §  8,  18  Stat.  470,  472,  chap.   137, 
U.  S.  Comp.  Stat.  513. 

«  Waterman  v.  Canal-Louisiana  Bank  &  Trust  Co.,  215  U.  S.  33,  54 
L.  ed.  — ,  30  Sup.  Ct.  — .  This  case  was  one  of  a  bill  in  equity  brought  in 
the  United  States  Circuit  Court  by  residents  and  citizens  of  Illinois  against 
the  Canal-Louisiana  Bank  &  Trust  Company,  executor,  and  certain  corpora- 
tions and  institutions  established  under  the  laws  of  another  State  and 
citizens  thereof  and  inhabitants  of  the  district  therein  in  which  the  suit  was 
brought;  also  against  certain  natural  persons. 

291 


§  171        JURISDICTION   OF   COURTS   OVER   CORPORATIONS 

sale  of  corporate  property,  where  such  suit  is  in  effect  one  to 
determine  the  legal  title  to  the  lands  and  is  brought  by  one 
holding  the  legal  title  to  the  stock  of  the  corporation,  although 
based  upon  the  claim  that  he  was  acting  as  trustee  of  pledgees, 
from  whom  he  held  by  assignment,  with  but  an  equitable  title 
in  part  of  the  stock  upon  which  he  was  suing;  that  he  was  at- 
tempting to  recover  property  of  a  dissolved  corporation;  and 
that  the  lands  did  not  pass  by  the  sale  and  were  still  liable  for 
the  debts  of  the  stock.  An  assignee  of  the  pledgee  of  stock  of 
a  dissolved  corporation  has  no  greater  rights  in  bringing  suits 
than  could  his  assignor  or  the  pledgee  have  had,  and  the  latter 
can  have  no  greater  rights  than  his  assignor.  And  where  the 
complainant's  interest  instead  of  being  equitable,  as  alleged, 
has  become  legal  by  an  assignment  and  conveyance,  the  equi- 
table features  disappear  and,  whatever  equities  might  be 
urged  between  the  complainant  and  his  cestuis  qui  trustent, 
there  is  between  him  and  defendant,  in  such  case,  but  the  en- 
forcement of  a  legal  title.  Again,  the  principle  upon  which 
courts  of  equity  take  jurisdiction  in  cases  where  it  is  sought 
to  follow  the  property  of  dissolved  corporations  in  behalf  of 
creditors  thereof,  is  that  such  property,  when  held  by  a  legal 
title,  is  charged  with  an  imphed  trust  to  pay  the  indebtedness, 
but  this  does  not  apply  where  it  cannot  be  claimed  that  prop- 
erty is  so  charged.^ 

§  171.  Jurisdiction  of  Court  of  Claims  of  New  York— 
Negligence  Causing  Death— Nonresidents  as  Parties — State 
as  Common  Carrier. 

It  was  the  intention  of  the  legislature  of  the  State  of  New 
York  as  expressed  in  the  Code  of  Civil  Procedure  ^^  that  the 
Court  of  Claims  should  have  jurisdiction  in  those  cases  where 
death  is  caused  by  a  wrongful  act,  neglect  or  default  on  the 
part  of  the  State;  and  the  right  given  to  prosecute  a  private 
claim  against  the  State  in  the  Court  of  Claims  to  recover  dam- 

42Knevals  v.  Florida  Central  &  Peninsula  Rd.  Co.  (U.  S.  C.  C.  A.),  66 
Fed.  224,  13  C.  C.  A.  410.    Petition  for  certiorari  denied  (mem.),  159  U.  S.  257. 
«  See  §  264. 

292 


JURISDICTION   OF   COURTS   OVER   CORPORATIONS        §  171 

ages  for  a  wrongful  act,  neglect  or  default  on  the  part  of  the 
State,  by  which  the  death  of  any  person  has  been  caused  is 
not  confined  to  residents  of  the  State,  but  such  a  claim  may  be 
prosecuted  by  a  resident  of  another  State.  The  State  of  New 
York  having  acquired,  pursuant  to  law,  for  a  State  reservation, 
lands  at  Niagara  Falls,  upon  which  was  an  inclined  railroad, 
had  the  power  to  continue  the  operation  of  such  railroad  so  as 
to  derive  a  revenue  therefrom;  but  the  doctrine  of  ultra  vires 
as  appKed  to  corporations  is  not  applicable  to  the  State  itself 
when  it  does  not  exceed  the  constitutional  limits  of  its  powers. 
Such  doctrine  cannot,  however,  be  invoked  to  shield  a  corpo- 
ration from  the  consequences  of  its  negligence  in  conducting 
a  business  not  within  the  scope  of  its  lawful  activities.  Again, 
when  a  State  engages  in  the  business  of  a  common  carrier,  it 
must  maintain  and  operate  a  suitably  and  properly  equipped 
road.  It  must  take  care  to  prevent  accidents,  to  see  that  its 
machinery  and  aj^pliances  are  reasonably  safe  for  the  purposes 
for  which  they  are  used  and  to  introduce  and  use  such  improve- 
ments in  its  machinery  and  apparatus  as  have  been  found 
naturally  to  contribute  to  safety,  in  the  same  manner  as  other 
common  carriers  of  passengers  for  hire.'*'* 

«  Burke  v.  State  of  New  York,  64  Misc.  .'JSS. 


293 


JURISDICTION   OF  COURTS 


CHAPTER  XII 


JURISDICTION   OF   COURTS    OVER    CORPORATIONS    CONTINUED 


§  172.  What  Constitutes  Contro- 
versy or  Dispute  Between 
Parties  —  Jurisdiction  of 
Federal  Circuit  Court  — 
Citizenship. 

173.  When  Corporation  Is  and  Is 

Not  a  Citizen  —  Pleadings. 

174.  Presumption  as  to  Citizenship 

of  Members  of  Corporation 
— President  and  Stock- 
holders. 

175.  Citizenship  —  Joint       Stock 

Company  Not  a  Corpora- 
tion for  Jurisdictional  Pur- 
poses. 

176.  Citizenship  —  Limited    Part- 

nership Not  a  Corporation 
for  Jurisdictional  Purposes. 

177.  Citizenship — Board   of  Trus- 

tees Not  a  Corporation  for 
Jurisdictional  Purposes. 

178.  Citizenship  of  Corporation  of 

Two  or  More  States — An- 
cillary or  Permissive  Char- 
ters or  License. 

179.  Same    Subject — Removal    of 

Causes. 

180.  Citizenship    —    Consolidated 

Corporations. 

181.  When    Federal     Court     Has 

Jurisdiction  —  Corporation 
— Doing  Business — Process 
— Service. 

182.  When  Federal  Court  no  Juris- 

diction— Corporation — Do- 
ing Business. 

183.  Where   Plaintiffs   Citizens  of 

Different  States. 

294 


184.  Citizenship  —  Territory    Di- 

vided Into  Two  States. 

185.  Juristliction  of  Circuit  Court 

— Citizenship  of  Guardian 
in  Suit  Against  Corpora- 
tion. 

186.  Citizenship  of  State — Diverse 

Citizenship. 

187.  Jurisdiction        —         Where 

"Found"  —  Suit  to  Re- 
strain Enforcement  Unrea- 
sonable Rates  by  Railroad 
Corporation. 

188.  Jurisdiction — Transitory    Ac- 

tion of  Trespass — Parties 
Residents  of  Other  States 
Than  That  of  Suit. 

189.  When      Federal     Courts     no 

Jurisdiction  of  Suit  by 
Assignee  of  Chose  in  Ac- 
tion— Assignment  of  Judg- 
ment. 

190.  Jurisdiction  of  Federal  Courts 

— Suits  by  Assignee — In- 
quiry Relates  to  Time 
When  Suit  Is  Brought. 

191.  Jurisdiction  of  Federal  Courts 

• — Suits  by  Assignee  of 
Promissory  Note  or  Chose 
in  Action — Exception  to 
Statutory  Prohibition. 

192.  When   Federal  Courts   Have 

Jurisdiction  of  Suits  by 
Assignee. 

193.  When  Federal  Court  no  Juris- 

diction of  Suit  by  As- 
signee— Contract  to  Convey 
Land. 


OVER  CORPORATIONS  CONTINUED    §§  172,  173 

§  194.  Motive  for  Bringing  Suit  or  jn  §  195.  Same  Subject — When   Juris- 

Obtaining    Citizenship    —  diction  Defeated. 

Collusive     Assignment     or  196.  Jurisdiction     —     Rearrange- 

Transfer  or  Fraud  to  Give  ment    of    Parties — Diverse 

Jurisdiction.  Citizenship. 

§  172.  What  Constitutes  Controversy  or  Dispute  Be- 
tween Parties — Jurisdiction  of  Federal  Circuit  Court — 
Citizenship. 

An  unsatisfied,  justiciable  claim  of  some  right  involving  the 
jurisdictional  amount  made  by  a  citizen  of  one  State  against 
a  citizen  of  another  State  is  a  controversy  or  dispute  between 
the  parties  within  the  meaning  of  the  statutes  defining  the 
jurisdiction  of  the  Circuit  Court.^  And  such  jurisdiction  does 
not  depend  upon  the  denial  by  the  defendant  of  the  existence 
of  the  claim  or  of  its  amount  or  validity.^ 

In  the  exercise  of  the  jurisdiction  conferred  upon  it  of  con- 
troversies between  citizens  of  different  States  a  Circuit  Court 
of  the  United  States  is  for  every  practical  purpose  a  court  of 
the  State  in  which  it  sits  and  will  enforce  the  rights  of  parties 
according  to  the  law  of  that  State,  taking  care,  as  a  State  Court 
must,  not  to  infringe  any  right  secured  by  the  Constitution  and 
the  laws  of  the  United  States.  And  in  case  of  condemnation 
it  would  proceed  under  the  sanction  of  and  enforce  the  State 
law  so  far  as  it  was  not  unconstitutional.^ 

§  173.  When  Corporation  Is  and  Is  Not  a  Citizen- 
Pleadings. 

Although  a  corporation,  being  an  artificial  body  created  by 
legislative  power,  is  not  a  citizen  within  several  provisions  of 
the  Constitution,  yet  where  rights  of  action  are  to  be  enforced 
by  or  against  a  corporation,  it  will  be  considered  as  a  citizen 
of  the  State  where  it  was  created,  within  the  clause  extending 
the  judicial  power  of  the  United  States  to  controversies  be- 

1  Acts  of  March  3,  1875,  chap.  137,  §  1,  18  Stat.  470;  March  3,  1887, 
chap.  373,  §  1,  24  Stat.  552;  August  13,  1888,  chap.  866,  §  1,  25  Stat.  433. 

2  MetropoHtan  Railway  Receivership,  In  re,  208  U.  S.  90,  52  L.  ed.  403, 
28  Sup.  Ct.  219. 

3  Madisonville  Traction  Co.  v.  St.  Bernard  Mining  Co.,  196  U.  S.  239,  25 
Sup.  Ct.  251,49L.  ed.  262. 

295 


§  173  JURISDICTION   OF   COURTS 

tween  citizens  of  the  different  States.  And  where  a  corpora- 
tion is  created  by  the  laws  of  a  State,  it  is,  in  suits  brought  in 
a  Federal  Court  in  that  State,  to  be  considered  as  a  citizen  of 
such  State,  whatever  its  status  or  citizenship  may  be  else- 
where by  the  legislation  of  other  States.^  It  was  held  in  1861, 
by  the  Federal  Supreme  Court,  that  a  corporation  is  not  a 
citizen  within  the  meaning  of  the  Constitution  of  the  United 
States  and  cannot  maintain  a  suit  in  a  court  of  the  United 
States  against  the  citizen  of  a  different  State  from  that  by 
which  it  was  chartered,  unless  the  persons  who  compose  the 
corporate  body  are  all  citizens  of  that  State;  that,  in  such  case 
they  may  sue  by  their  corporate  name,  averring  the  citizenship 
of  all  the  members,  and  such  a  suit  would  be  regarded  as  the 
joint  suit  of  individual  persons,  united  together  in  the  corpo- 
rate body  and  acting  under  the  name  conferred  upon  them  for 
the  more  convenient  transaction  of  business,  and  consequently 
entitled  to  maintain  a  suit  in  the  Federal  Courts  against  a  cit- 
izen of  another  State. ^  Where  there  is  no  plea  to  the  jurisdic- 
tion in  a  suit  in  equity  in  a  Federal  Court  an  allegation  that 
complainant  is  a  corporation  and  citizen  of  a  certain  State, 
and  that  defendants  are  citizens  of  another  State,  and  residents 
of  the  district  where  the  suit  was  brought,  stands  admitted  as 
to  complainant  though  denied  in  the  answer  and  as  to  the  de- 
fendants by  failure  to  deny.® 

4  Railway  Co.  v.  Whitton,  13  Wall.  (80  U.  S.)  270,  20  L.  ed.  571. 

5  Ohio  &  Mississippi  Rd.  Co.  v.  Wheeler,  1  Black.  (66  U.  S.)  286, 17  L.  ed.  130. 

6  Crown  Cork  &  Seal  Co.  v.  Standard  Brewery  (U.  S.  C.  C),  174  Fed.  252, 
citing  Roberts  v.  Lewis,  144  U.  S.  653,  12  Sup.  Ct.  781,  36  L.  ed.  579; 
Butchers'  &  Drovers'  Stock  Yards  Co.  v.  Louisville  &  Nashville  R.  Co.,  67 
Fed.  35,  14  C.  C.  A.  290,  31  U.  S.  App.  252. 

Pleadings — as  to  averments  of  citizenship,  see  the  following  cases:  Mexi- 
can Cent.  Ry.  Co.  v.  Pinkney,  149  U.  S.  194,  37  L.  ed.  699,  13  Sup.  Ct.  859; 
Gordon  v.  Third  Nat.  Bank  of  Chattanooga,  144  U.  S.  97,  36  L.  ed.  360,  12 
Sup.  Ct.  657;  Everhart  v.  Huntsville  College,  120  U.  S.  223,  30  L.  ed.  623, 
7Sup.Ct.  555;  Continental  Ins.  Co.  v.  Rhodes,  119  U.  S.  237,  30  L.  ed..380, 
7  Sup.  Ct.  193;  Grace  v.  American  Central  Ins.  Co.,  109  U.  S.  278,  27  L.  ed. 
932,  3  Sup.  Ct.  207;  Covington  Drawbridge  Co.  v.  Shepherd,  20  How.  (61 
U.  S.)  227,  15  L.  ed.  896,  aff'd  21  How.  (62  U.  S.)  112,  16  L.  ed.  38;  Piquig- 
not  V.  Pennsylvania  Railroad  Co.,  16  How.  (57  U.  S.)  104,  14  L.  ed.  863. 

General  issue  admits  corporate  capacity  of  plaintiffs  to  sue.    Society  for 

290 


OVER   CORPORATIONS   CONTINUED  §  174 

§  174.  Presumption  as  to  Citizenship  of  Members  of 
Corporation— President  and  Stockholders. 

For  the  purpose  of  suing  and  being  sued  in  the  Circuit  Court 
of  the  United  States  the  members  of  a  local  corporation  are 
conclusively  presumed  to  be  citizens  of  the  State  by  whose 
law  it  was  created  and  in  which  alone  the  corporate  body  has 
a  legal  existence.^  There  is  an  indisputable  legal  presumption 
that  a  State  corporation,  when  sued  or  suing  in  a  Circuit  Court 
of  the  United  States,  is  composed  of  citizens  of  the  State  which 
created  it,  and,  therefore,  such  corporation  is  itself  deemed  to 
come  within  that  provision  of  the  Constitution  of  the  United 
States  which  confers  jurisdiction  upon  the  Federal  Courts  in 
"controversies  between  citizens  of  different  States."  This 
presumption  accompanies  a  railroad  corporation,  which  has 
consent  to  extend  its  railroad  into  another  State,  and  does 
business  therein,  and  it  may  sue  or  be  sued  in  the  Federal 
Courts  in  such  other  State  as  a  citizen  of  the  State  of  its  original 
creation.  That  presumption  of  citizenship  is  one  of  law,  not 
to  be  defeated  by  allegation  or  evidence  to  the  contrary.*    No 

the  Propagation  of  the  Gospel,  etc.,  v.  Town  of  Pawlet,  4  Pet.  (29  U.  S.) 
480,  7  L.  ed.  927,  cited  in  New  York  Dry  Dock  v.  Hicks,  5  McLean  (U.  S. 
C.  C.)lll,  115. 

Averment  of  residence  of  plaintiff  in  State,  in  suit  against  foreign  corpo- 
ration, as  basis  of  order  for  service  by  publication,  under  New  York  Code 
Civ.  Proc,  §  1780,  and  §  438.  See  Auerbach  v.  Internationale  Wolfram 
Lampen  Aktien  Gesellschaft  (U.  S.  C.  C),  173  Fed.  624. 

An  averment  in  a  bill  that  the  complainants  are  "all  of  Cognac  in  France, 
and  citizens  of  the  Republic  of  France,"  is  sufficient  to  give  the  Circuit 
Court  of  the  United  States  for  Nebraska  jurisdiction  in  a  controversy  where 
the  defendants  are  citizens  of  Nebraska.  No  averment  of  alienage  is  nec- 
essary. Hennessy  v.  Richardson  Drug  Co.,  189  U.  S.  25,  47  L.  ed.  697,  23 
Sup.  Ct.  532. 

7  Thomas  v.  Board  of  Trustees  of  the  Ohio  State  University,  195  U.  S. 
207,  25  Sup.  Ct.  24,  49  L.  ed.  160. 

8  St.  Louis  &  San  Francisco  Ry.  Co.  v.  James,  161  U.  S.  545,  40  L.  ed.  802, 
16  Sup.  Ct.  621,  reviewing  the  authorities,  and  cited  in  Utah-Nevada  (^o. 
v.  De  Lamar,  113  Fed.  113,  118,  66  C.  C.  A.  179,  distinguished  in  Patch  v. 
Wabash  Rd.  Co.,  207  U.  S.  277,  28  Sup.  Ct.  80,  52  L.  ed.  208.  See  Dodd  v. 
Louisville  Bridge  Co.  (U.  S.  C.  C),  130  Fed.  186,  196. 

Where  a  corporation  is  created  by  the  laws  of  a  State,  the  legal  presump- 
tion is,  that  its  members  are  citizens  of  the  State  in  which  alone  the  cori^o- 
rate  body  has  a  legal  existence.    And  a  suit  by  or  against  a  corporation,  in 

297 


§  175  JURISDICTION    OF   COURTS 

presumption  exists,  however,  that  a  president  or  stockholder 
of  a  corporation  is  a  citizen  of  the  same  State  as  the  corpora- 
tion when  an  individual's  citizenship  is  in  question  upon  his 
right  to  sue  in  the  Federal  Courts.  But  a  suit  by  or  against  a 
corporation  in  its  corporate  name  must  be  presumed  to  be  a 
suit  by  or  against  citizens  of  the  State  which  created  the 
corporate  body,  and  no  averment  or  evidence  to  the  contrary 
is  admissible  for  the  purpose  of  withdrawing  the  suit  from  the 
jurisdiction  of  the  United  States.  This  rule  of  the  Supreme 
Court  was  made  to  prevent  the  interminable  litigation  that 
might  arise  if  every  corporation,  when  suing  or  being  sued  in 
the  courts,  was  compelled  to  show  that  each  and  every  one 
of  its  members  was  a  citizen  of  the  State  in  which  the  corpo- 
ration was  organized.  The  necessity  of  the  rule,  the  object 
in  adopting  it,  was  to  fix  the  status  of  the  corporations,  and 
determine  their  rights  in  suing  or  being  sued.  For  that  pur- 
pose the  presumption  is  indulged  in.  The  constant  tendency 
of  the  decisions  of  the  Supreme  Court  of  the  United  States  has 
been  towards  putting  corporations  upon  the  same  footing  as 
natural  persons  in  regard  to  the  jurisdiction  of  suits  by  or 
against  them.^ 

§  175.  Citizenship— Joint-Stock  Company  Not  a  Corpo- 
ration for  Jurisdictional  Purposes. 

An  allegation  that  a  plaintiff  is  a  joint-stock  company  or- 
ganized under  the  laws  of  a  State  is  not  an  allegation  that  it  is 

its  corporate  name,  must  be  presumed  to  be  a  suit  by  or  against  citizens  of 
the  State  which  created  the  corporate  body;  and  no  averment  or  evidence 
to  the  contrary  is  admissible  for  the  purpose  of  withdrawing  the  suit  from 
the  jurisdiction  of  a  court  of  the  United  States.  Ohio  &  Mississippi  Rd. 
Co.  V.  Wheeler,  1  Black.  (66  U.  S.)  286,  17  L.  ed.  130. 

While  the  members  of  a  corporation  are,  for  purposes  of  suit  by  or  against 
it  in  the  courts  of  the  United  States,  to  be  conclusively  presumed  to  be 
citizens  of  the  State  creating  it,  the  corporation  itself  is  not  a  citizen  within 
the  meaning  of  the  provision  of  the  Constitution  that  the  citizens  of  each 
State  shall  be  entitled  to  all  privileges  and  immunities  of  citizens  of  the 
several  States.  Blake  v.  McClung,  172  U.  S.  239,  43  L.  ed.  432,  19  Sup.  Ct. 
165. 

8  Utah-Nevada  Co.  v.  De  Lamar,  133  Fed.  113,  118,  66  C.  C.  A.  179. 
See  Dodd  v.  Louisville  Bridge  Co.  (U.  S.  C.  C),  130  Fed.  186,  196. 

298 


OVER  CORPORATIONS   CONTINUED  §  176 

a  corporation,  but,  on  the  contrary,  that  it  is  not  a  corporation 
but  a  partnership.  And  an  averment  that  a  joint-stock  com- 
pany is  a  citizen  of  a  State  different  from  that  of  the  defend- 
ant will  not  give  the  Supreme  Court  jurisdiction  on  the  ground 
of  citizenship.^*^  It  is  pertinent,  however,  in  this  connection 
to  state  that  under  several  State  Constitutions  and  certain 
State  statutes  the  term  "corporations"  includes  associations 
and  joint-stock  companies."  And  it  is  determined  by  the  Fed- 
eral Supreme  Court  that  while  that  court  is  not  conclusively 
bound  by  the  judgment  of  the  highest  court  of  a  State  as  to 
what  is  and  is  not  a  corporation  of  that  State  within  the  juris- 
dictional rule,  it  will  accept  such  judgment  unless  a  contrary 
view  is  demanded  by  the  most  cogent  reasons.^^ 

§  176.  Citizenship— Limited  Partnership  Not  a  Corpora- 
tion for  Jurisdictional  Purposes. 

A  limited  partnership,  doing  business  under  a  firm  name, 
and  organized  under  a  State  statute  entitled  "an  act  author- 
izing the  formation  of  partnership  associations  in  which  the 
capital  subscribed  shall  alone  be  responsible  for  the  debts  of 
the  association,  except  under  certain  circumstances"  is  not 
a  corporation  within  the  rule  that  a  suit  by  or  against  a  cor- 
poration in  a  court  of  the  United  States  is  conclusively  pre- 

10  Chapman  v.  Barney,  129  U.  S.  677,  32  L.  ed.  800,  9  Sup.  Ct.  426,  cited 
in  Andrews  Bros.  Co.  v.  Youngstown  Coke  Co.,  86  Fed.  586;  Gregg  v.  San- 
ford,  65  Fed.  153.  Examine  Liverpool  Ins.  Co.  v.  Massachusetts,  10  Wall. 
(77  U.  S.)  566,  574,  19  L.  ed.  1029,  aff'g  Oliver  v.  Liverpool  &  London  Life 
&  Fire  Ins.  Co.,  100  Mass.  531,  Mr.  Justice  Bradley  dissenting.  Tide  Water 
Pipe  Co.,  Limited,  v.  State  Board  of  Assessors,  57  N.  J.  L.  516,  27  L.  R.  A. 
684,  31  Atl.  221;  Fargo  v.  McVicker,  55  Barb.  (N.  Y.)  437. 

"  See  Joyce  on  Franchises,  §  52.  See  also  Id.,  §§  52-54,  for  discussion  of 
question  as  to  what  extent  the  definition  of  a  corporation  includes  a  com- 
pany, association  and  joint-stock  association  or  company  and  partnership. 
Examine  Public  Service  Commissions  Law  of  New  York,  Laws  1907,  p.  891, 
chap.  429,  art.  I,  §  2;  Joint-Stock  Assoc.  Law,  N.  Y.  Laws  1894,  chap.  235, 
§2. 

12  Thomas  v.  Board  of  Trustees  of  the  Ohio  State  University,  195  U.  S. 
207,  25  Sup.  Ct.  24,  49  L.  ed.  160.  In  this  case,  as  we  have  stated  in  the 
text  where  we  have  considered  this  case  it  was  decided  by  the  highest  State 
Court  that  a  board  of  trustees  of  a  State  institution  was  not  a  corporation 
although  possessing  some  of  the  attributes  of  a  corporation. 

299 


§§177,  178  JURISDICTION   OF   COURTS 

sumed,  for  the  purposes  of  the  litigation  to  be  one  by  or  against 
citizens  of  the  State  creating  the  corporation.  It  is  not  sufficient 
that  the  association  may  be  described  as  a  quasi-corporation 
or  as  a  "new  artificial  person."  The  rule  does  not  embrace  a 
new  artificial  person  that  is  not  a  corporation.^^ 

§  177.  Citizenship — Board  of  Trustees  Not  a  Corpora- 
tion for  Jurisdictional  Purposes. 

An  averment  that  a  Board  of  Trustees  of  a  State  institution 
was  created  by  and  exists  under  the  laws  of  a  State,  other 
than  that  of  complainant,  and  is  a  citizen  of  that  State,  with- 
out alleging  that  it  is  a  corporation  of  the  State,  or  that  each 
individual  member  of  the  Board  is  a  citizen  of  that  State,  and 
the  highest  court  of  the  State  has  decided  that  the  Board 
although  possessing  some  of  the  attributes  of  a  corporation  is 
not  a  corporation  of  such  State,  is  held  insufficient  to  sustain 
the  jurisdiction  of  the  Circuit  Court  on  the  ground  of  diverse 
citizenship.  But  where  a  Board  of  Trustees  of  an  institution 
can,  by  the  legislative  act  creating  it,  sue  and  be  sued  collect- 
ively and  is  bound  by  the  judgment,  a  citizen  of  another  State 
can  sue  it  as  such  Board  collectively,  without  bringing  in  all 
the  members  thereof,  in  a  Federal  Circuit  Court,  provided  it 
affirmatively  appears  that  each  member  of  the  Board  is  a 
citizen  of  a  State  other  than  that  of  complainant.^"* 

§  178.  Citizenship  of  Corporation  of  Two  or  More  States 
— Ancillary  or  Permissive  Charters  or  License. 

It  was  early  decided  that  a  corporation  endued  with  the  ca- 
pacities and  faculties  it  possesses  by  the  co-operating  legislation 
of  two  States,  cannot  have  one  and  the  same  legal  being  in 
both  States.    Neither  State  could  confer  on  it  a  corporate  ex- 

13  Great  Southern  Fire  Proof  Hotel  Co.  v.  Jones,  177  U.  S.  449,  20  Sup. 
Ct.  690,  44  L.  ed.  842.  See  Fred  Macey  Co.  v.  Macey,  135  Fed.  727;  Imperial 
Refining  Co.  v.  Wyman,  38  Fed.  574,  3  L.  R.  A.  504. 

i<  Thomas  v.  Board  of  Trustees  of  the  Ohio  State  University,  195  U.  S. 
207,  25  Sup.  Ct.  24,  49  L.  ed.  160.  See  Fred  Macey  Co.  v.  Macey,  135  Fed. 
727;  Rees  v.  Olmstead,  135  Fed.  301.  Compare  Board  of  Levee  Inspectors 
of  Chicot  County  v.  Crittenden,  94  Fed.  613,  616. 

300 


OVER   CORPORATIONS   CONTINUED  §  178 

istence  in  the  other,  nor  add  to  or  diminish  the  powers  to  be 
there  exercised.  The  two  corporations  deriving  their  powers 
from  distinct  sovereignties,  and  exercising  them  within  dis- 
tinct hmits,  cannot  unite  as  plaintiffs  in  a  suit  in  a  court  (jf 
the  United  States  against  a  citizen  of  either  of  the  States  which 
cliartered  them.^*^  It  is  competent,  however,  for  a  railroad 
corporation  organized  under  the  laws  of  one  State,  when  au- 
thorized so  to  do  by  the  consent  of  the  State  which  created  it, 
to  accept  authority  from  another  State  to  extend  its  railroad 
into  such  State,  and  to  receive  a  grant  of  powers  to  own  and 
control,  by  lease  or  purchase,  railroads  therein,  and  to  subject 
itself  to  such  rules  and  regulations  as  may  be  prescribed  by 
the  second  State;  and  such  legislation  on  the  part  of  two  or 
more  States  is  not,  in  the  absence  of  inhibitory  legislation  by 
Congress,  regarded  as  within  the  constitutional  prohibition  of 
agreements  or  compacts  between  States.  Such  corporations 
may  be  treated  by  each  of  the  States  whose  legislative  grants 
they  accept  as  domestic  corporations.  But  a  provision  in  a 
State  statute  that  a  railroad  corporation  of  another  State 
which  had  leased  or  purchased  a  railroad  in  the  first  State  and 
filed  with  its  Secretary  of  State,  as  provided  by  the  act,  a  cer- 
tified copy  of  its  articles  of  incorporation,  should  become  a 
corporation  of  the  State  enacting  the  statute,  does  not  avail  to 
create  a  corporation  of  such  statutory  State  out  of  a  foreign 
corporation  complying  with  those  provisions,  in  such  a  sense 
as  to  make  it  a  citizen  thereof  within  the  meaning  of  the  Fed- 
eral Constitution,  and  subject  it  to  a  suit  in  the  Federal  Courts 
sitting  therein,  brought  by  a  citizen  of  the  State  of  its  origin.'*^ 
So  although  a  State  statute  provides  that  a  foreign  railroad 
company  desiring  to  own  property  or  carry  on  business,  or 
exercise  any  corporate  franchise  within  the  State,  must  com- 
ply with  certain  specified  proiisions  of  the  statute,  and  on 
complying   therewith   shall   become  a  domestic   corporation, 

15  Ohio  &  Mississippi  Rd.  Co.  v.  Wheeler,  1  Black  (66  U.  S.),  286,  17 
L.  ed.  130. 

i«  St.  Louis  &  San  Francisco  Ry.  Co.  v.  James,  161  U.  S.  545,  40  L.  ed. 
802,  16  Sup.  Ct.  621. 

301 


§  178  JUBISDICTION   OF   COURTS 

such  fact  does  not  affect  the  character  of  the  original  corpora- 
tion, and  it  does  not  thereby  become  a  citizen  of  such  State 
so  far  as  to  affect  the  jurisdiction  of  the  Federal  Courts  upon  a 
question  of  diverse  citizenship.  And  where  a  corporation 
which  has  complied  with  such  statutory  provision  is  sued  in  the 
courts  of  the  State  enacting  the  statute,  an  order  of  removal 
made  by  the  Federal  Circuit  Court  operates  to  withdraw  from 
the  State  Court  the  right  to  hear  and  determine  the  case.^^ 

17  Southern  Ry.  Co.  v.  Allison,  190  U.  S.  326,  23  Sup.  Ct.  713,  47  L.  ed. 
1078,  distinguished  in  Patch  v.  Wabash  Rd.  Co.,  207  U.  S,  277,  284,  52 
L.  ed.  208,  28  Sup.  Ct.  80,  cited  in  Sun  Printing  &  Publishing  Ass'n  v. 
Edwards,  194  U.  S.  377,  381,  48  L.  ed.  1027,  24  Sup.  Ct.  696  (this  case  holds 
that  an  allegation  in  the  complaint,  which  is  admitted  by  answer,  that 
defendant  is  a  domestic  corporation  duly  organized  and  existing  under  the 
laws  of  a  designated  State  and  having  its  principal  office  therein  is  a  suffi- 
cient averment  as  to  defendant's  citizenship);  St.  Louis  &  San  Francisco 
R.  Co.  V.  Cross  (U.  S.  C.  C),  171  Fed.  480,  484  (that  by  compliance  with 
State  law  a  corporation  "may  be  made  what  is  termed  a  domestic  corpora- 
tion or  in  form  a  domsstic  corporation,  but  that  it  does  not  thereby  become 
a  citizen  of  the  State  '  so  far  as  to  affect  the  jurisdiction  of  the  Federal  courts 
upon  a  question  of  diverse  citizenship'  "). 

Explained  in  Atlantic  Coast  Line  R.  Co.  v.  Dunning  (U.  S.  C.  C.  A.),  166 
Fed.  850,  857,  cited  in  same  case  at  p.  856. 

Cited  and  quoted  from  in  Lee  v.  Atlantic  Coast  Line  R.  Co.  (U.  S.  C.  C), 
150  Fed.  775,  795,  796,  797. 

Cited  in  Stonega  Coal  &  Coke  Co.  v.  Louisville  &  N.  R.  Co.  (U.  S.  C.  C), 
139  Fed.  271  (in  case  where  neither  plaintiff  nor  defendant  resided  in  the 
State  or  district  the  court  was  without  jurisdiction  and  there  was  a  de- 
murrer and  no  waiver) . 

Explained  in  Dodd  v.  Louisville  Bridge  Co.  (U.  S.  C.  C),  130  Fed.  186, 
196  (as  establishing  that  for  the  purposes  of  jurisdiction  there  is  a  con- 
clusive presumption  that  all  the  stockholders  of  a  corporation  are  citizens 
of  the  State  creating  it  "  when  a  corporation,  for  example,  of  Pennsylvania, 
is,  by  its  own  name,  instead  of  the  names  of  citizens,  incorporated  by  a  law, 
for  example,  of  Indiana,  this  would  make  the  Pennsylvania  corporation, 
and  not  the  citizens  who  were  its  stockholders,  a  citizen  of  Indiana,  for 
jurisdictional  purposes,  notwithstanding  the  rule  that  the  stockholders  of 
the  Pennsylvania  corporation  were  still  presumed  to  be  citizens  of  Pennsyl- 
vania. Memphis  &  Charleston  Rd.  Co.  v.  Alabama,  107  U.  S.  581,  2  Sup. 
Ct.  432,  27  L.  ed.  518.  Priority  of  creation  of  a  corporation  in  this  connec- 
tion sometimes  becomes  important"). 

Cited  in  Goodwin  v.  Boston  &  Maine  Rd.  (U.  S.  C.  C),  127  Fed.  986,  989, 

"  It  should  be  noticed,     *     *     *     that  the  older  and  general  doctrine  of  a 

convenient  rule  of  fiction,  which,  for  certain  jurisdictional  purposes,  treats 

a  railroad  system  operating  continuous  lines  through  several  States,  under 

302 


OVER  COBPORATIONS   CONTINUED  §  179 

§  179.  Same  Subject— Removal  of  Causes. 

In  St.  Joseph  &  Grand  Island  Railroad  Co.  v.  Steele/*  it  is 
decided  that  a  railroad  company,  owning  and  operating  a 
line  running  through  several  States,  may  receive  and  exercise 
powers  granted  by  each,  but  does  not  thereby  become  a  citizen 
of  every  State  it  i)asses  through,  within  the  meaning  of  the 
jurisdiction  clause  of  the  Constitution  of  the  United  States. 
In  Goodlett  v.  Louisville  &  Nashville  Rd.  Co.,^»  the  company 
was  held  to  be  a  corporation  of  Kentucky  and  not  of  Tennessee 
inasmuch  as  it  had  from  the  latter  State  only  a  license  to  con- 
struct a  railroad  within  its  limits,  between  certain  points,  and 
to  exert  there  some  of  its  corporate  powers.  In  Pennsylvania 
Railroad  Co.  v.  St.  Louis,  Alton  &  Terre  Haute  Railroad  Co.,20 
it  is  held  that  when  an  existing  railroad  corporation  organized 
under  the  laws  of  one  State,  is  authorized  by  the  laws  of  an- 
other State  to  extend  its  road  into  the  latter,  it  does  not  be- 
come a  citizen  of  the  latter  State,  unless  the  statute  giving 
this  permission  must  necessarily  be  construed  as  creating  a 
new  corporation  of  the  State  which  grants  this  permission. 

charters  independently  granted  under  the  same  name  in  the  different  States, 
as  a  citizen  of  the  several  States  in  which  it  operates,  has  apparently  been 
questioned  or  qualified,  in  a  sense,  by  more  recent  cases,  like  Railroad  v. 
Koontz,  104  U.  S.  5,  26  L.  ed.  643;  St.  Louis  &  San  Francisco  Rd.  v.  James, 
161  U.  S.  545,  16  Sup.  Ct.  621,  40  L.  ed.  802,  and  Southern  Ry.  Co.  v.  Allison, 
190  U.  S.  326,  23  Sup.  Ct.  713,  47  L.  ed.  1078.  It  is  not  necessary,  however, 
to  inquire  in  this  case  just  how  far  such  qualification  results  from  the  modern 
practice  of  taking  a  creative  charter  in  one  State,  and  ancillary  or  permissive 
charters  in  others,  for  the  reason  that  the  unmistakable  trend  of  the  au- 
thorities involving  such  situations  is  in  the  direction  of  treating  citizenship 
for  certain  purposes  as  existing  in  the  State  of  the  corporate  creation,  or,  in 
other  words,  in  the  State  where  the  corporation  was  first  chartered;  and 
thus  such  authorities,  if  they  bear  at  all  upon  the  jurisdictional  question 
here,  sustain  the  view  of  the  defendant."  And  the  syllabus  in  this  case 
reads:  "  The  Boston  &  Maine  Railroad,  a  corporation  originally  chartered 
in  New  Hampshire,  but  subsequently,  by  consolidation,  also  made  a  corpo- 
ration of  both  Massachusetts  and  Maine,  is  a  citizen  of  New  Hampshire, 
in  such  sense  that  the  Circuit  Court  of  the  United  States  in  that  State  is 
without  jurisdiction  of  an  action  against  it  by  another  citizen  of  New  Hamp- 
shire on  the  ground  of  diversity  of  citizenship." 

18  167  U.  S.  650,  663,  17  Sup.  Ct.  925,  42  L.  ed.  315. 

19  122  U.  S.  391,  7  Sup.  Ct.  1254,  30  L.  ed.  1230. 

20  lis  U.  S.  290,  297,  30  L.  ed.  83,  6  Sup.  Ct.  1094. 

303 


§  180  JURISDICTION    OF    COURTS 

In  Martin  v.  Baltimore  &  Ohio  Railroad  Co.,^'  it  is  held  that 
under  the  act  of  Congress  -^  authorizing  an  action  brought  in 
a  court  of  a  State  between  citizens  of  different  States  to  be  re- 
moved into  the  Circuit  Court  of  the  United  States  "by  the  de- 
fendant or  defendants  therein,  being  nonresidents  of  that 
State,"  a  defendant  corporation  must  be  created  by  the  laws 
of  another  State  only,  in  order  to  entitle  it  to  remove  the  ac- 
tion; and  if  it  is  such  a  corporation,  and  has  not  also  been 
created  a  corporation  by  the  laws  of  the  State  in  which  an  ac- 
tion has  been  brought  against  it,  by  a  citizen  thereof,  it  may 
remove  the  action,  even  if  it  has  been  licensed  by  the  laws  of 
the  State  to  act  within  its  territory,  and  is,  therefore,  subject 
to  be  sued  in  its  courts.  So  in  that  case  the  Baltimore  &  Ohio 
Railroad  Co.,  was  held  to  be  a  corporation  of  the  State  of  Mary- 
land only,  though  licensed  by  the  State  of  West  Virginia  to 
act  within  its  territory,  and  liable  to  be  sued  in  its  courts;  and 
could,  therefore,  remove  into  the  Federal  Circuit  Court  for  the 
District  of  West  Virginia  an  action  brought  against  it  in  a 
court  of  said  State  by  a  citizen  thereof.  A  corporation  incorpo- 
rated simultaneously  and  freely  in  several  States  exists  in  each 
State  by  virtue  of  the  laws  of  that  State,  and  when  it  incurs  a 
liability  under  the  laws  of  one  of  the  States  in  which  it  is  in- 
corporated and  is  sued  therein  it  cannot  escape  the  jurisdic- 
tion thereof  and  remove  to  the  Federal  Court  on  the  ground 
that  as  it  is  also  incorporated  in  the  other  States  it  is  not  a 
citizen  of  that  State.  A  case  of  this  character  should  be  dis- 
tinguished from  those  cases  wherein  a  corporation  originally 
incorporated  in  one  State  is  compelled  to  become  a  corporation 
of  another  State  so  as  to  exercise  its  powers  therein.'^ 

§  180.  Citizenship — Consolidated  Corporations. 

It  is  held  in  numerous  cases  that  by  consolidation  a  new 

21  151  U.  S.  673,  .38  L.  ed.  311,  14  Sup.  Ct.  533. 

22  Act  of  March  3,  1887,  chap.  373,  24  Stat,  at  L.  552. 

23  Patch  V.  Wabash  Rd.  Co.,  207  U.  S.  277,  28  Sup.  Ct.  80,  52  L.  ed.  208, 
distinguishing  Southern  Ry.  Co.  v.  AUison,  190  U.  S.  326,  47  L.  ed.  107S, 
23  Sup.  Ct.  713;  St  Louis  &  San  Francisco  Ry.  Co.  v.  James,  161  U.  S.  545, 
40  L.  ed.  802,  16  Sup.  Ct.  621. 

304 


OVER  CORPORATIONS   CONTINUED  §  IgQ 

corporation  is  created  and  that  the  old  consolidating  companies 
cease  their  existence.-''  It  is  also  held  that  a  consolidation 
merges  the  franchises  and  privileges  of  each  original  corpora- 
tion in  the  new  company  so  that  they  continue  to  exist  in  re- 
spect thereto,  that  is,  the  old  constituent  companies  retain 
their  original  status  towards  the  public  and  the  State  the  same 
as  if  the  consolidation  had  not  taken  place.^^  But  the  consoli- 
dation of  two  companies  does  not  necessarily  work  a  dissolu- 
tion of  both,  and  the  creation  of  a  new  corporation.  Whether 
such  be  its  effect,  depends  upon  the  legislative  intent  mani- 
fested in  the  statute  under  which  the  consolidation  takes 
place-^*^  It  is  held  that  a  consolidated  corporation  is,  for  the 
purposes  of  jurisdiction,  a  citizen  of  either  or  each  of  the  States 
under  which  it  is  organized.^^  In  Louisville,  New  Albany  & 
Chicago  Ry.  Co.  v.  Louisville  Trust  Co.,^^  it  is  decided  that  the 
Circuit  Court  of  the  United  States  for  the  District  of  Kentucky 
has  jurisdiction  of  a  suit  brought  by  a  corporation,  originally 
created  by  the  State  of  Indiana,  against  citizens  of  Kentucky 

24  Shaw  V.  City  of  Covington,  194  U.  S.  593,  48  L.  ed.  1131,  24  Sup.  Ct.  754; 
Minneapolis  &  St.  Louis  Ry.  Co.  v.  Gardner,  177  U.  S.  332,  20  Sup.  Ct.  656, 
24  L.  ed.  793;  Keokulc  &  Western  R.  R.  Co.  v.  Missouri,  152  U.  S.  301, 
38  L.  ed.  450,  14  Sup.  Ct.  592;  Pullman's  Palace  Car  Co.  v.  Missouri  Pac. 
Ry.  Co.,  115  U.  S.  587,  6  Sup.  Ct.  194,  29  L.  ed.  499;  St.  Louis,  I.  M.  &  S. 
Ry.  Co.  V.  Berry,  113  U.  S.  465,  5  Sup.  Ct.  529,  28  L.  ed.  1055;  Clearwater 
V.  Meredith,  1  Wall.  (68  U.  S.)  25,  17  L.  ed.  604;  Winn  v.  Wabash  R.  Co., 
118  Fed.  55,  58;  Citizens'  St.  Ry.  Co.  v.  City  of  Memphis,  53  Fed.  715,  731, 
per  Hammond,  J.;  Market  St.  R.  Co.  v.  Hellman,  109  Cal.  571,  42  Pac.  225. 
See  Rochester  Ry.  Co.  v.  City  of  Rochester,  205  U.  S.  236,  51  L.  ed.  237, 
27  Sup.  Ct.  469,  aff'g  182  N.  Y.  116. 

25  Green  County  v.  Conness,  109  U.  S.  104,  27  L.  ed.  872,  3  Sup.  Ct.  69; 
Railroad  Co.  v.  Maine,  96  U.  S.  499,  24  L.  ed.  836;  Branch  v.  Charleston,  92 
U.  S.  677,  23  L.  ed.  750;  Charleston,  City  of,  v.  Branch,  15  Wall.  (82  U.  S.) 
460,  21  L.  ed.  189;  Citizens'  St.  Ry.  Co.  v.  City  of  Memphis,  53  Fed.  715, 
731,  per  Hammond,  J.  See  Chesapeake  &  Ohio  R.  Co.  v.  Virginia,  94  U.  S. 
718,  24  L.  ed.  310;  Delaware  Rd.  Tax,  18  Wall.  (85  U.  S.)  206,  21  L.  ed.  888. 

26  Central  Railroad  &  Bkg.  Co.  v.  Georgia,  92  U.  S.  665,  23  L.  ed.  757; 
Edison  Electric  Light  Co.  v.  New  Haven  Electric  Co.,  35  Fed.  233,  236, 
per  Shipman,  J.;  Henderson  v.  Central  Passenger  Ry.  Co.,  21  Fed.  358,  364, 
per  Barr,  J. 

27  Baldwin  v.  Chicago  &  N.  W.  R.  Co.  (U.  S.  C.  C),  86  Fed.  167;  William- 
son V.  Krohn  (U.  S.  C.  C.  A.),  66  Fed.  655,  13  C.  C.  A.  668. 

28  174  U.  S.  552,  43  L.  ed.  1081,  19  Sup.  Ct.  821. 

20  305 


§  180  JURISDICTION   OF  COURTS 

and  of  Illinois,  even  if  the  plaintiff  was  afterwards  and  before 
the  suit  made  a  corporation  of  Kentucky  also,  and  pending 
the  suit  became  a  corporation  of  both  Indiana  and  Ilhnois  by 
reason  of  consoHdation  with  a  corporation  of  Illinois;  but  that 
the  court  cannot,  in  such  a  suit,  adjudicate  upon  the  rights 
and  liabilities,  if  any,  of  the  plaintiff  as  a  corporation  of  Ken- 
tucky, or  as  a  corporation  of  Illinois.  In  another  case,  however, 
it  is  held  that  railroad  corporations  created  by  two  or  more 
States,  though  joined  in  their  interests,  in  the  operation  of 
their  roads,  in  the  issue  of  their  stock  and  in  the  division  of 
their  profits,  so  as  practically  to  be  a  single  corporation,  do  not 
lose  their  identity,  but  each  has  its  existence  and  its  standing 
in  the  courts  of  the  country  only  by  virtue  of  the  legislation  of 
the  State  by  which  it  was  created,  and  the  union  of  name,  of 
officers,  of  business  and  of  property  does  not  change  their  dis- 
tinctive character  as  separate  corporations.  In  this  case  a 
railroad  corporation  was  incorporated  in  New  Hampshire, 
subsequently  it  was  incorporated  in  Massachusetts  under  the 
same  name  with  some  of  the  same  directors  to  form  a  junction 
with  the  former  corporation's  road.  Thereafter  the  latter  State 
provided  for  uniting  the  two  corporations  when  the  first  named 
State  should  pass  a  similar  enactment,  which  act  was  passed. 
A  common  stock  was  issued  for  the  whole  line  and  for  forty- 
five  years  the  two  properties  were  under  the  management  of 
one  board  of  directors,  but  there  was  no  other  evidence  that 
the  stockholders  had  acted  on  these  statutes.  It  was,  there- 
fore, held  that  the  New  Hampshire  corporation  being  a  citizen 
of  that  State,  was  entitled  to  go  into  the  Circuit  Court  of  Mas- 
sachusetts and  bring  its  bill  there  against  a  citizen  of  Massa- 
chusetts; and  that  its  union  or  consolidation  with  another 
corporation  of  the  same  name,  organized  under  the  laws  of 
Massachusetts,  did  not  extinguish  or  modify  its  character  as  a 
citizen  of  New  Hampshire,  or  give  it  any  such  additional  citi- 
zenship in  Massachusetts,  as  to  defeat  its  right  to  go  into  that 
court  .^^ 

29  Nashua  &  Lowell  Rd.  Co.  v.  Boston  &  Lowell  Rd.  Co.,  136  U.  S.  356, 
10  Sup.  Ct.  1004,  34  L.  ed.  363. 

306 


OVER   CORPORATIONS   CONTINUED  §  181 

§  181.  When  Federal  Court  Has  Jurisdiction— Corpora- 
tion— Doing  Business — Process — Service. 

A  corporation  created  by,  and  transacting  business  in  a  State 
is  to  be  deemed  an  inhabitant  of  the  State,  capable  of  being 
treated  as  a  citizen,  for  all  purposes  of  suing  and  being  sued, 
and  an  averment  of  the  facts  of  its  creation  and  the  place  of 
transacting  business  is  suflBcient  to  give  the  Federal  Circuit 
Court  jurisdiction.^'^ 

"A  corporation  may  for  the  purposes  of  suit  be  said  to  be 
born  where  by  law  it  is  created  and  organized,  and  to  reside 

30  Louisville,  Cincinnati  &  Charleston  Rd.  Co.  v.  Letson,  2  How.  (43  U.  S.) 
497,  11  L.  ed.  55;  Act  of  February  28,  1839,  as  to  "inhabitants  of  or  formed 
within  the  district"  and  absentee  defendants. 

Jurisdiction  over  foreign  corporation  doing  business  or  having  agent  or 
office  in  State — service  of  process,  see  the  following  cases: 

United  States:  De  Castro  v.  Compagnie  Fran^aise  du  T616graphe  (U.  S. 
C.  C),  76  Fed.  425;  Gilbert  v.  New  Zealand  Ins.  Co.  (U.  S.  C.  C),  49  Fed. 
884,  15  L.  R.  A.  125,  21  Ins.  L.  J.  428;  Van  Dresser  v.  Oregon  R.  &  Nav.  Co. 
(U.  S.  C.  C),  48  Fed.  202,  11  Ry.  Corp.  L.  J.  58;  Minford  v.  Old  Dominion 
Steamship  Co.  (U.  S.  C.  C),  48  Fed.  1;  Land  &  R.  Imp.  Co.  v.  Bardon 
(U.  S.  C.  C),  45  Fed.  706;  Hohorst  v.  Hamburg-Amer.  Packet  Co.  (U.  S. 
C.  C),  38  Fed.  273;  Denton  v.  International  Co.  (U.  S.  C.  C),  36  Fed.  1. 

Alabama:  Sullivan  v.  Sullivan  Timber  Co.,  103  Ala.  11,  25  L.  R.  A.  543, 
15  So.  941,  47  Am.  &  Eng.  Corp.  Cas.  511. 

Illinois:  Northwestern  L.  Assoc,  v.  Stout,  32  111.  App.  31. 

Indiana:  Rehm  v.  German  Ins.  &  Sav.  Inst.,  125  Ind.  135,  25  N.  E.  173, 
44  Baltimore  Underwriter,  254. 

Minnesota:  Eichoff  v.  Fidehty  &  C.  Co.,  74  Minn.  130,  9  Am.  &  Eng. 
Corp.  Cas.  (N.  S.)  379,  76  N.  W.  1030. 

Ohio:  Knox  County  Mut.  Ins.  Co.  v.  Bowersox,  6  Ohio  C.  C.  275. 

South  Carolina:  Pollock  v.  Carolina  Interstate  Bldg.  &  L.  Assoc,  48  S.  C. 
65,  25  S.  E.  977. 

Texas:  American  Well  Works  v.  De  Aguayo  (Tex.  Civ.  App.).  53  S.  W. 
350;  Shane  v.  Mexican  International  R.  Co.  (Tex.  Civ.  App.),  28  S.  W.  456; 
Home  Forum  B.  O.  of  111.  v.  Jones,  20  Tex.  Civ.  App.  68,  48  S.  W.  219; 
Western  Union  Teleg.  Co.  v.  Clark,  14  Tex.  Civ.  App.  563,  38  S.  W.  225. 

Vermont:  Whitcomb  v.  Robbins,  69  Vt.  477,  38  Atl.  233. 

West  Virginia:  Brabham  v.  Phoenix  Ins.  Co.,  41  W.  Va.  139,  23  S.  E.  553; 
Carson  v.  Phoenix  Ins.  Co.,  41  W.  Va.  136,  23  S.  E.  552. 

When  a  national  bank  fixes  its  principal  place  of  business,  under  its  ar- 
ticles of  association,  at  a  certain  city,  in  pursuance  of  the  provisions  of  the 
National  Banking  Act  [Rev.  Stat.,  §  5134  (U.  S.  Comp.  Stat.,  1901,  p.  3454)] 
it  is  to  be  deemed  a  resident  of  the  State  wherein  such  city  is  situate,  within 
the  meaning  of  said  statute.  Standard  Oak  Veneer  Co.  (U.  S.  Dist.  Ct.), 
173  Fed.  103. 

307 


§  181  JURISDICTION   OF   COURTS 

where,  by  or  under  the  authority  of  its  charter,  its  principal 
office  is.  A  corporation,  therefore,  created  by  and  organized 
under  the  laws  of  a  particular  State,  and  having  its  principal 
office  there,  is,  under  the  constitution  and  laws,  for  the  purpose 
of  suing  and  being  sued,  a  citizen  of  that  State,  possessing  all 
the  rights  and  having  all  the  powers  its  charter  confers."  ^^ 
The  Circuit  Court  of  the  United  States,  held  within  one  State, 
has  jurisdiction  of  an  action  brought  by  a  citizen  and  resident 
of  another  State,  against  a  foreign  corporation  doing  business 
in  the  first  State  through  its  regularly  appointed  agents,  upon 
whom  the  summons  is  there  served,  for  a  cause  of  action  arising 
in  a  foreign  country;  although  the  statutes  of  the  State  confer 
no  authority  upon  any  court  to  issue  process  against  a  foreign 
corporation,  at  the  suit  of  a  person  not  residing  within  the 
State,  and  for  a  cause  of  action  not  arising  therein.^'  A  citizen 
of  one  State  can  sue  a  corporation  which  has  been  created  by, 
and  transacts  its  business  in,  another  State,  the  suit  being 
brought  in  the  latter  State,  although  some  of  the  members  of 
the  corporation  are  not  citizens  of  the  State  in  which  the  suit 
is  brought,  and  even  though  the  State  itself  may  be  a  member 
of  the  corporation.^^ 

In  order,  however,  for  a  State  Court  to  obtain  jurisdiction 
over  a  foreign  corporation  having  neither  property  nor  agent 
within  a  State  it  is  essential  for  the  corporation  to  be  doing 
business  in  the  State.^^    So  an  insurance  company  with  out- 

31  Railroad  Co.  v.  Koontz,  104  U.  S.  5,  12,  26  L.  ed.  64.3,  per  Mr.  Chief 
Justice  Waite;  case  is  cited  in  Utah-Nevada  Co.  v.  De  Lamar,  113  Fed.  117, 
66  C.  C.  A.  179. 

32  Barrow  Steamship  Co.  v.  Kane,  170  U.  S.  100,  42  L.  ed.  964,  18  Sup. 
Ct.  526. 

33  Louisville,  Cincinnati  &  Charleston  Rd.  Co.  v.  Letson,  2  How.  (43  U.  S.) 
497,  11  L.  ed.  55,  reviewing  and  controlling  Commercial  &  Railroad  Bk.  of 
Vicksburg  v.  Slocomb,  14  Pet.  (39  U.  S.)  60,  10  L.  ed.  354;  Bank  of  United 
States  V.  Deveaux,  5  Cranch  (9  U.  S.),  84,  3  L.  ed.  44;  Curtiss  v.  Strawbridge, 
3  Cranch  (7  U.  S.),  267,  2  L.  ed.  435. 

34  Commercial  Mutual  Accident  Co.  v.  Davis,  213  U.  S.  245,  53  L.  ed. 
782,  29  Sup.  Ct.  445,  citing  Peterson  v.  Chicago,  Rock  Island  &  Pacific  Rail- 
way Co.,  205  U.  S.  364,  51  L.  ed.  841,  27  Sup.  Ct.  513;  Lumberman's  Ins. 
Co.  V.  Meyer,  197  U.  S.  407,  49  L.  ed.  810,  25  Sup.  Ct.  483;  Conley  v.  Math- 
ieson  Alkali  Works,  190,406,  47  L.  ed.  1113,  23  Sup.  Ct.  728;  Connecticut 

308 


OVER  CORPORATIONS   CONTINUED  §  182 

standing  policies  in  a  State  on  which  it  collects  premiums  and 
adjusts  losses  was  held  to  be  doing  business  within  that  State, 
so  as  to  render  it  hable  to  an  action,  and  that  service,  according 
to  the  law  of  the  State,  on  a  doctor  sent  to  investigate  the  loss 
and  having  power  to  adjust  the  same  is  sufficient  to  give  the 
State  Court  jurisdiction.^^  At  common  law  there  was  no 
method  by  which  a  State  Court  could  obtain  jurisdiction  over 
the  person  of  a  foreign  corporation  to  render  a  personal  judg- 
ment against  it.^^  And  by  the  common  law,  to  maintain  a 
personal  action  against  a  corporation,  there  must  have  been 
service  of  process  upon  the  principal  officer  within  the  juris- 
diction of  the  sovereignty  creating  it.  The  officer  upon  whom, 
in  the  sovereignty  of  its  creation,  service  could  be  legally  had, 
binding  the  corporation,  it  may  be  could  be  found  in  another 
jurisdiction,  but  he  was  not  regarded  as  carrying  with  him 
his  official  functions,  and  service  upon  him  there  would  not 
bind  the  corporation.  State  legislatures  have,  in  order  to 
obviate  this  inconvenience,  and  not  infrequently  injustice, 
enacted  statutes  providing  a  mode  of  service  upon  corporate 
representatives  or  agents  within  the  State  of  the  enactment." 

§  182.  When  Federal  Court  Has  no  Jurisdiction— Corpo- 
ration— Doing  Business. 

Where  a  corporation  has  never  maintained  an  office  in  a 
certain  State  for  the  transaction  of  business  and  has  never 
had  any  resident  agent  there,  or  transacted  any  other  business 
therein,  save  the  soliciting  of  orders  by  mail  or  traveling  sales- 

Mut.  Life  Ins.  Co.  v.  Spratley,  172  U.  S.  602,  43  L.  ed.  569,  19  Sup.  Ct.  308; 
Barrow  Steamship  Co.  v.  Kane,  170  U.  S.  100,  42  L.  ed.  964,  18  Sup.  Ct.  526; 
Ooldey  V.  Morning  News,  156  U.  S.  518,  39  L.  ed.  517,  15  Sup.  Ct.  559; 
St.  Clair  v.  Cox,  106  U.  S.  350,  27  L.  ed.  222,  1  Sup.  Ct.  354 

35  Commercial  Mut.  Accident  Co.  v.  Davis,  213  U.  S.  245,  53  L.  ed.  782, 
29  Sup.  Ct.  445. 

3s  Swarts  v.  Cliristie  Grain  &  Stock  Co.  (U.  S.  C.  C),  166  Fed.  338,  citing 
St.  Clair  v.  Cox,  106  U.  S.  355,  1  Sup.  Ct.  354,  27  L.  ed.  222;  Strain  v.  Chicago 
Portrait  Co.  (U.  S.  C.  C),  126  Fed.  831. 

37  Pullman  Palace  Car  Co.  v.  Harrison,  122  Ala.  149,  153,  82  Am.  St.  Rep. 
68,  per  Tyson,  J.,  a  case  as  to  the  jurisdiction  of  courts  over  a  foreign  cor- 
poration for  a  tort  committed  by  it  in  another  State. 

309 


§  183  JURISDICTION   OF  COtlRTS 

men,  to  be  submitted  for  approval,  such  corporation  is  not 
"doing  business  within  the  State"  so  as  to  be  subject  to  suit 
therein.^^  While  in  a  case  of  diverse  citizenship  the  suit  may 
be  brought  in  the  Circuit  Court  for  the  district  of  the  residence 
of  either  party,  there  must  be  service  within  the  district;  and 
if  the  defendant  is  a  nonresident  corporation  service  can 
only  be  made  upon  it  if  it  is  doing  business  in  that  district  in 
such  a  manner,  and  to  such  an  extent,  as  to  warrant  the  infer- 
ence that  it  is  present  there  through  its  agent.  But  a  railroad 
company  which  has  no  tracks  within  the  district  is  not  doing 
I)usiness  therein  in  the  sense  that  liability  for  service  is  incurred 
because  it  hires  an  office  and  employs  an  agent  for  the  merely 
incidental  business  of  solicitation  of  freight  and  passenger 
traffic.^"  By  virtue  of  the  acts  of  1887  and  1888 'i"  a  corpora- 
tion incorporated  by  a  State  of  the  Union  cannot  be  compelled 
to  answer  to  a  suit  for  infringement  of  a  trade-mark  ^^  in  a 
district  in  which  it  is  not  incorporated  and  of  which  the  plain- 
tiff is  not  an  inhabitant  although  it  does  business  and  has  a 
general  agent  in  that  district.^^ 

§  183.  Where  Plaintiffs  Citizens  of  Different  States. 

Where  suit  is  brought  in  the  district  of  defendant's  residence 
by  plaintiffs  who  are  citizens  of  other  States  than  that  of 

38  William  Grace  Co.  v.  Henry  Martin  Brick  Mach.  Mfg.  Co.  (U.  S.  C.  C. 
A.),  174  Fed.  131,  citing  Green  v.  Chicago,  Burlington  &  Quincy  Ry.  Co., 
205  U.  S.  530,  27  Sup.  Ct.  595,  51  L.  ed.  916;  Conley  v.  Mathieson  Alkali 
Works,  190  U.  S.  406,  47  L.  ed.  1113,  23  Sup.  Ct.  728;  Goldey  v.  Morning 
News,  156  U.  S.  518,  15  Sup.  Ct.  559,  39  L.  ed.  517;  Fitzgerald  &  Mallory 
Construction  Co.  v.  Fitzgerald,  137  U.  S.  98,  11  Sup.  Ct.  36,  34  L.  ed.  608; 
Wall  V.  Chesapeake  &  Ohio  Ry.  Co.,  95  Fed.  398,  37  C.  C.  A.  129;  Houston 
V.  Filer  Stowell  Co.  (C.  C),  85  Fed.  757;  Fairbank  &  Co.  v.  Cincinnati  & 
N.  O.  Ry.  Co.,  54  Fed.  420,  423,  4  C.  C.  A.  403,  38  L.  R.  A.  271;  Havens  & 
Geddes  Co.  v.  Diamond,  93  111.  App.  557;  March-Davis  Cycle  Mfg.  Co.  v. 
Strobridge  Lithographing  Co.,  79  111.  App.  683. 

38  Green  v.  Chicago,  Burhngton  &  Quincy  Ry.  Co.,  205  U.  S.  530,  27  Sup. 
Ct.  595,  51  L.  ed.  916,  aff'g  147  Fed.  767. 

40  Act  of  March  3,  1887,  as  corrected  by  act  of  August  13,  1888,  chap.  866. 

«  Under  the  act  of  March  3,  1881,  chap.  138. 

«  Keasbey  &  Mattison  Co.,  In  re,  160  U.  S.  221,  40  L.  ed.  402,  16  Sup. 
Ct.  273.  See  Westinghouse  Air  Brake  Co.  v.  Great  Northern  Ry.  Co.,  88 
Fed.  260;  Southern  Pac.  Co.  v.  Earle,  82  Fed.  694. 

310 


OVER   CORPORATIONS   CONTINUED  §§  184,   185 

defendant,  the  Circuit  Court  has  jurisdiction,  although  plain- 
tiffs are  not  themselves  citizens  of  the  same  State."*' 

§  184.  Citizenship— Territory  Divided  Into  Two  States. 

Under  the  act  of  Congress  '^  for  the  division  of  the  Territory 
of  Dakota  into  two  States,  and  for  the  admission  of  those  and 
other  States  into  the  Union,  and  providing  that  the  Circuit 
and  District  Courts  of  the  United  States  shall  be  the  successors 
of  the  Supreme  and  District  Courts  of  each  Territory,  as  to  all 
cases  pending  at  the  admission  of  the  State  into  the  Union, 
"whereof  the  Circuit  or  District  Courts  by  this  act  established 
might  have  had  jurisdiction  under  the  laws  of  the  United 
States,  had  such  courts  existed  at  the  time  of  the  commence- 
ment of  such  cases,"  the  Circuit  Court  of  the  United  States  for 
the  District  of  South  Dakota  has  jurisdiction,  at  the  written 
request  of  either  party,  of  an  action  brought  in  a  District  Court 
of  that  part  of  the  Territory  of  Dakota  which  afterwards 
became  the  State  of  South  Dakota,  by  a  citizen  of  that  part 
of  the  Territory,  since  a  citizen  of  the  State,  against  a  citizen 
of  another  State,  and  pending  on  appeal  in  the  Supreme  Court 
of  the  Territory  at  the  time  of  the  admission  of  the  State  into 
the  Union.''^ 

§  185.  Jurisdiction  of  Circuit  Court — Citizenship  of 
Guardian  in  Suit  Against  Corporation. 

Where  it  appeared  from  the  statutes  of  Texas  and  the 
decisions  of  the  highest  court  of  that  State  that  a  general 
guardian  has  the  legal  right  to  bring  a  suit  in  the  State  Courts 
of  Texas  in  his  own  name,  it  follows  that  a  citizen  and  resident 
of  the  Western  District  of  Texas,  who  has  been  duly  appointed 
by  the  proper  court  of  Texas  the  guardian  of  the  person  and 
estate  of  a  minor,  whose  father  and  mother  are  residents, 
citizens  and  inhabitants  of  another  State  and  are  not  and 
never  have   been  residents,  citizens  or  inliabitants  of  Texas, 

«  Sweeney  v.  Carter  Oil  Co.,  199  U.  S.  252,  26  Sup.  Ct.  55,  50  L.  ed.  178. 
«  Act  of  Feliruary  22,  1889,  chap.  180. 

45  Koenigsberger  v.  Richmond  Silver  Mining  Co.,  158  U.  S.  41,  30  L.  ed. 
889,  loSup.  Ct.  751. 

:u  1 


§  186  JURISDICTION   OF  COURTS 

may  bring  an  action  in  his  own  nunio  in  the  United  States 
Circuit  Court  for  the  Western  District  of  Texas  against  a 
corporation  of  another  State,  as  the  jurisdiction  of  the  Circuit 
Court  is  dependent  on  the  citizenship  of  the  guardian  and  not 
on  the  citizenship  of  the  ward.'*^ 

§  186.  Citizenship  of  State — Diverse  Citizenship. 

A  State  is  not  a  citizen  within  the  meaning  of  the  provisions 
of  the  Constitution  or  acts  of  Congress  regulating  the  jurisdic- 
tion of  the  Federal  Courts.'*'  And  in  a  suit  against  a  corporation 
by  one  State,  an  averment  that  the  defendant  is  a  body  politic 
by  the  law  of  another  State,  named  and  doing  business  in  it, 
is  not  sufficient  to  give  jurisdiction  to  the  Federal  Supreme 
Court;  and  that  court  has  no  original  jurisdiction  of  a  suit 
brought  by  a  State  against  one  of  its  own  citizens.^* 

Under  the  Judiciary  Acts  of  the  United  States,  a  suit  taken 
between  a  State  and  a  citizen  or  corporation  of  another  State 
is  not  a  suit  between  citizens  of  different  States;  and  the 
Circuit  Court  of  the  United  States  has  no  jurisdiction  of  it, 
unless  it  arises  under  the  Constitution,  laws  or  treaties  of  the 
United  States  .^'^ 

A  State  cannot  maintain  an  action  in  equity  to  restrain  a 
corporation  from  violating  the  provisions  of  the  Antitrust 
Act  ^°  on  the  ground  that  such  violation  by  decreasing  com- 
petition would  depreciate  the  value  of  its  public  lands  and 
enhance  the  cost  of  maintaining  its  public  institutions,  the 
damages  resulting  from  such  violations  being  remote  and 
indirect  and  not  such  direct  actual  injury  as  is  provided  for  in 

«  Mexican  Central  Ry.  Co.  v.  Eckman,  187  U.  S.  429,  47  L.  ed.  245,  23 
Sup.  Ct.  211. 

«  Minnesota  v.  Northern  Securities  Co.,  194  U.  S.  48,  48  L.  ed.  870,  24 
Sup.  Ct.  598. 

48  Pennsylvania  v.  Quicksilver  Co.,  10  Wall.  (77  U.  S.)  553,  19  L.  ed.  998. 

49  Postal  Tel.  Cable  Co.  v.  Alabama,  155  U.  S.  482,  15  Sup.  Ct.  192,  39 
L.  ed.  231. 

The  Federal  Circuit  Courts  have  no  jurisdiction  based  upon  diverse  citi- 
zenship of  a  suit  between  a  State  and  a  citizen  or  corporation  of  another 
State.    State  of  Arkansas  v.  Kansas  &  T.  Coal  Co.  (U.  S.  C.  C),  96  Fed.  353. 

60  Act  of  July  2,  1890,  26  Stat.  209. 

312 


OVER  CORPORATIONS   CONTINUED  i^  186 

§7  of  the  act.  Tlic  object  of  said  enactment  was  to  limit 
direct  proceedings  in  equity  to  prevent  and  restrain  such 
violations  of  the  said  act  as  cause  injury  to  the  general  public, 
or  to  all  alike,  merely  from  the  suppression  of  competition  in 
trade  and  commerce  among  the  several  States  and  with  foreign 
nations  to  those  instituted  in  the  name  of  the  United  States, 
under  §  4  of  the  act,  by  district  attorneys  of  the  United  States, 
acting  under  direction  of  the  attorney-general;  thus  securing 
the  enforcement  of  the  act,  so  far  as  such  direct  proceedings 
in  equity  are  concerned,  according  to  some  uniform  plan, 
operative  throughout  the  entire  country .^^ 

But  a  bill  in  equity,  filed  in  the  name  of  a  State,  seeking  to 
prevent  by  injunction  a  corporation  organized  under  the  laws 
of  another  State,  with  power  to  hold  and  acquire  shares  of  the 
capital  stock  of  any  other  corporation,  from  obtaining  and 
exercising  ownership  and  control  of  two  or  more  competing 
railroad  companies  of  the  State,  so  as  to  evade  and  defeat  its 
laws  and  pohcy  forbidding  the  consohdation  of  such  railroads 
when  parallel  and  competing,  is  a  controversy  of  which  the 
Federal  Supreme  Court  has  jurisdiction .^^ 

Again,  if  the  real  controversy  is  between  citizens  of  different 
States  a  Federal  Court  will  retain  jurisdiction  even  though  the 
name  of  a  State,  supposed  to  be  a  necessary  party,  is  formally 
used,  where  the  ground  of  action  is  an  attachment  bond  payable 
to  said  State  as  provided  by  statute  which  authorizes  a  suit 
thereon  by  any  party  injured.^^ 

The  courts  of  a  State  may  also  take  cognizance  of  a  suit 
brought  by  the  State,  in  its  own  courts,  against  citizens  of 
other  States,  subject  to  the  right  of  the  defendant  to  have 
such  suit  removed  to  the  proper  Circuit  Court  of  the  United 
States,  whenever  the  removal  thereof  is  authorized  by  act  of 
Congress,  and  subject  also  to  the  authority  of  the  Supreme 

51  Minnesota  v.  Northern  Securities  Co.,  194  U.  S.  48,  24  Sup.  Ct.  598,  48 
L.  ed.  870. 

52  Minnesota  v.  Northern  Securities  Co.,  184  U.  S.  199,  22  Sup.  Ct.  308, 
46  L.  ed.  499. 

53  State,  Ranch,  v.  Bowles  Milling  Co.  (U.  S.  C.  C),  80  Fed.  161. 

313 


§§  187,  188  JURISDICTION   OF   COURTS 

Court  to  review  the  final  judgment  of  the  State  Court,  if  the 
case  be  one  within  its  appehate  jurisdiction.^'* 

§  187.  Jurisdiction— Where  "  Found  "—Suit  to  Restrain 
Enforcement  Unreasonable  Rates  by  Railroad  Corporation. 

Under  the  act  of  1875^^  a  cause  cognizable  in  the  Federal 
Courts  could  be  brought  against  a  defendant  in  any  district 
wherein  he  might  be  found  at  the  time  of  serving  process. 
The  Interstate  Commerce  Act  was  passed  when  this  statute 
was  in  force.  The  acts  of  1887  and  1888,^^  providing  that 
no  civil  suit  shall  be  brought  before  either  the  Circuit  Court 
or  the  District  Court  "against  any  person  by  any  original 
process  or  proceeding  in  any  other  district  than  that  where- 
of he  is  an  inliabitant,"  being  limited  to  actions  of  which 
there  is  concurrent  jurisdiction  in  State  Courts,  do  not  apply 
to  an  action  in  which  the  Federal  jurisdiction  is  exclusive,  and, 
therefore,  a  suit  to  restrain  railroad  corporations  from  en- 
forcing unreasonable  rates  contrary  to  the  Interstate  Com- 
merce Act "  can  be  brought  in  any  district  in  which  the  defend- 
ants can  be  found .^* 

§  188.  Jurisdiction— Transitory  Action  of  Trespass- 
Parties  Residents  of  Other  States  Than  That  of  Suit. 

It  is  held  in  a  Mississippi  case  that  in  a  transitory  action  of 
trespass  the  fact  that  both  the  plaintiff  and  the  defendant,  a 
foreign  corporation,  were  and  continued  to  be  residents  and 
citizens  of  another  State  constituted  no  defense;  and  that  the 

54  Plaquemines  Trop.  Fruit  Co.  v.  Henderson,  170  U.  S.  511,  42  L.  ed.  1126, 
18  Sup.  Ct.  685. 

55  Act  of  March  3,  1875,  chap.  137,  18  Stat.  470,  U.  S.  Comp.  Stat.,  1901, 
p.  508. 

56  Act  of  March  3,  1887,  chap.  373,  24  Stat.  552,  U.  S.  Comp.  Stat.,  1901, 
p.  508;  Act  of  August  13,  1888,  chap.  866,  25  Stat.  433,  U.  S.  Comp.  Stat., 
1901,  p.  508. 

57  Act  of  February  4,  1887,  chap.  104,  24  Stat.  379,  U.  S.  Comp.  Stat., 
1901,  p.  3154. 

58  So  held  in  Northern  Pac.  Ry.  Co.  v.  Pacific  Coast  Lumber  Mfg.'s  Assn. 
(U.  S.  C.  C.  A.),  165  Fed.  1,  followed  in  Union  Pac.  Rd.  Co.  v.  Oregon  & 
Washington  Lumber  Mfg.'s  Assn.  (U.  S.  C.  C.  A.),  165  Fed.  13. 

314 


OVER   CORPORATIONS   CONTINUED  §  189 

fact  that  the  injury  was  inflicted  or  the  wrong  done  in  another 
State  than  that  of  suit  was  also  no  defense.  "We  are  aware 
that  there  is  some  divergence  of  opinion  on  this  subject  be- 
tween the  courts  of  last  resort  in  this  country,  and  that  ap- 
parent authority  can  be  found  for  holding  that  a  foreign  corpo- 
ration resident  in  one  State  may  not  be  sued  in  another  State 
by  a  resident  in  the  first  State  on  a  cause  of  action  arising 
in  the  first  State.  But  even  these  cases  will  be  found  to 
be  governed  by  the  peculiar  statutes  of  the  State  declining 
to  take  jurisdiction,  or  that  the  refusal  to  take  jurisdiction 
rested  upon  some  unusual  circumstance  which  deterred  the 
court  from  entertaining  the  suit,  or  because  of  a  supposed 
distinction  between  statutory  rights  and  common-law  rights. 
But  in  many  States,  and  amongst  them  our  own,  the  rule  we 
first  announced  has  been  firmly  established  by  repeated  ad- 
judications."^^ 

§  189.  When  Federal  Courts  no  Jurisdiction  of  Suit  by 
Assignee  of  Chose  in  Action — Assignment  of  Judgment. 

In  a  late  case  in  the  Federal  Circuit  Court  the  cause  of  action 
arose  in  the  following  manner:  A  corporation  of  the  State  of 
New  York  made  a  promissory  note  to  the  order  of  a  certain 
company,  payable  in  four  months.  This  note  was  duly  in- 
dorsed by  the  payee  and  was  afterwards  transferred  before 
maturity  to  a  national  bank  of  Pennsylvania.  Said  bank 
obtained  judgment  in  the  Supreme  Court  of  New  York  against 
the  maker  and  payee,  and  issued  execution  thereon,  which 

59  Pullman  Palace  Car  Co.  v.  Lawrence,  74  Miss.  782,  796,  797,  per 
Woods,  C.  J.,  citing  or  reviewing  New  Orleans,  Jackson  &  Great  Northern 
Rd.  Co.  V.  Wallace,  50  Miss.  244;  Chicago,  St.  Louis  &  New  Orleans  Rd.  Co.  v. 
Doyle,  60  Miss.  977;  Illinois  Cent.  Rd.  Co.  v.  Credup,  63  Miss.  291 ;  McMaster 
V.  Illinois  Cent.  Rd.  Co.,  65  Miss.  764,  4  So.  59;  Burns  v.  Grand  Rapids  &  In- 
diana Rd.  Co.,  113  Ind.  169,  15  N.  E.  230;  Knight  v.  West  Jersey  Rd.  Co., 
108  Pa.  St.  250;  Eingartner  v.  Illinois  Steel  Co.,  94  Wis.  70,  34  L.  R.  A.  503. 

Code  of  1892,  of  said  State,  §  849,  provides:  "Of foreign  corporations.  Cor- 
porations which  exist  by  the  laws  of  any  other  State  of  the  Union,  by  the 
Acts  of  Congress,  or  the  laws  of  any  foreign  State,  may  sue  in  this  State  by 
their  corporate  names,  and  they  shall  also  be  liable  to  be  sued  or  proceeded 
against,  by  attachment  or  otherwise,  as  individual  nonresident  debtors  may 
be  sued  or  proceeded  against,"  etc. 

315 


§  189  JURISDICTION   OF  COURTS 

writ  was  returned  unsatisfied,  but  before  this  suit  was  brought 
the  bank  "duly  sold,  assigned,  and  transferred  to  this  plaintiff 
all  of  its  right,  title,  and  interest  in  and  to  said  judgment,  and 
all  of  the  rights  and  remedies  to  which  it  was  or  might  be- 
come entitled  under  and  by  virtue  of  the  laws  of  the  State 
of  New  York,  by  reason  of  being  the  owner  of  said  debt  and 
of  the  subsequent  proceedings  taken  by  it  for  the  collection 
of  the  same  and  by  virtue  of  the  corporation  laws  of  the 
State  of  New  York."  It  was  also  claimed  that  the  defend- 
ant was  a  stockholder  in  the  corporation,  maker  of  the  note, 
and  that  by  virtue  of  such  holding  he  was  liable  under 
the  laws  of  New  York  for  the  full  amount  of  the  judgment. 
Upon  these  facts  the  defendant  moved  to  dismiss  the  suit 
upon  the  ground  that  the  plaintiff  was  proceeding  upon  a 
chose  in  action,  that  the  title  thereto  was  derived  from  an 
assignor,  who  could  not  have  maintained  the  action  in  said 
Federal  Court.  Outside  of  these  facts  a  controversy  apparently 
existed  within  the  jurisdiction  of  the  Circuit  Court,  because 
of  diverse  citizenship  of  the  parties.  It  was  held  under  the 
statute  making,  for  the  purpose  of  jurisdiction  of  Federal 
Courts,  national  banks  citizens  of  the  States  in  which  they  are 
respectively  located,  and  also  providing  that  no  Circuit  or 
District  Court  shall  have  cognizance  of  any  suit  on  a  promissory 
note  or  chose  in  action  brought  by  an  assignee,  unless  such 
suit  might  have  been  prosecuted  in  such  court  if  no  assignment 
or  transfer  had  been  made,  that  the  above  assignment  of  a 
chose  in  action  prevented  the  plaintiff  as  assignee  of  the  bank 
to  maintain  this  suit;  that  the  judgment  was  a  chose  in  action 
preventing  tliis  suit  by  plaintiff  under  the  above  mentioned 
statute .®° 

60  Sullivan  v.  Ayer  (U.  S.  C.  C),  174  Fed.  199.  The  court  per  McPherson, 
Dist.  J.,  said:  "In  considering  this  position,  it  should  first  be  observed  that 
the  original  note  was  merged  in  the  judgment.  As  was  said  in  Ol^er  v.  Gal- 
lagher, 93  U.  S.  206,  23  L.  ed.  829:  'The  note  was  no  longer  in  existence  as 
an  outstanding  liability.  It  had  been  merged  in  the  judgment,  and  was,  as 
a  note,  extinguished.  Gallagher  no  longer  claims  as  assignee  of  the  note, 
but  as  the  owner  of  a  judgment  in  his  favor  against  Thompson.' 

"In  the  collection  of  its  judgment,  therefore,  the  l)ank  no  longer  pro- 

316 


OVER  CORPORATIONS  CONTINUED  §  10() 

§  190.  Jurisdiction  Federal  Courts— Suits  by  Assignee- 
Inquiry  Relates  to  Time  When  Suit  Is  Brought. 

The  inquiry  as  to  the  jurisdiction  of  the  Circuit  Court  (jf 

ceeded  upon  the  note,  and  upon  the  assignment  or  indorsement  thereof,  hut 
upon  the  judgment  itself.  If  the  bank  had  l)ecn  thus  proceeding  against 
Ayer  in  this  court  to  enforce  the  statutory  liability  (whatever  that  may  be) 
created  by  the  laws  of  New  York,  it  would  have  been  met  by  the  objection 
that  the  action  could  not  be  maintained  in  this  forum,  because  the  follow- 
ing provision  of  act  of  March  3,  1SS7,  chap.  373,  §  4,  24  Stat.  554  (1  U.  S. 
Comp.  Stat.,  1901,  p.  514),  is  in  the  way:  '§  4.  All  national  banking  asso- 
ciations established  under  the  laws  of  the  United  States  shall,  for  the  pur- 
poses of  all  actions  by  or  against  them  real,  personal  or  mixed,  and  all  suits 
in  equity,  be  deemed  citizens  of  the  States  in  which  they  are  respectively 
located;  and  in  such  cases  the  Circuit  and  District  Courts  shall  not  have 
jurisdiction  other  than  such  as  they  would  have  in  cases  between  individual 
citizens  of  the  same  State.' 

"This  being  so,  it  follows,  I  think,  that  §  1  of  the  same  statute  [24  Stat. 
552  (1  U.  S.  Comp.  Stat.,  1901,  p.  508)]  forbids  the  plaintiff  also,  as  assignee 
of  the  bank,  to  maintain  the  suit  in  this  court.  The  relevant  language  of 
the  section  is  as  follows:  'nor  shall  any  Circuit  or  District  Court  have  cog- 
nizance of  any  suit  *  *  *  to  recover  the  contents  of  any  promissory 
note  or  other  chose  in  action  in  favor  of  any  assignee  *  *  *  -unless  such 
suit  might  have  been  prosecuted  in  such  court  to  recover  the  said  contents 
if  no  assignment  or  transfer  had  been  made.' 

"The  remaining  question,  therefore,  is  whether  the  present  action  is 
brought  to  recover  the  contents  of  a  chose  in  action,  and  upon  this  question 
the  decisions  seem  to  leave  no  room  for  doubt.  A  judgment  is  a  chose  in 
action.  The  contents  of  a  judgment,  hke  the  contents  of  the  promissory 
note  of  which  Chief  Justice  Marshall  was  speaking  in  Sere  v.  Pitot,  6  Cranch 
(U.  S.),  335,  3  L.  ed.  240,  'are  the  sum  it  shows  to  be  due;'  and  this  suit  is 
brought  to  recover  the  sum  due  upon  the  judgment  recovered  by  the  bank, 
because  that  record  forms  the  indispensable  foundation  of  the  action.  If 
this  were  an  action  of  debt  upon  the  judgment,  in  which  the  Steel  Company 
was  pursued  before  some  other  tribunal  than  the  Supreme  Court  of  New 
York,  there  could,  of  course,  be  no  doubt  that  the  suit  was  brought  to  re- 
cover the  contents  of  the  judgment.  And  while  it  is  true  that  the  present 
proceeding  is  not  directed  against  the  Steel  Company,  and  that  the  judg- 
ment alone  would  not  support  a  recovery  against  the  defendant  Ayer,  it  is 
also  true  that  the  plaintiff  is  seeking  to  recover  from  him  the  sum  due  upon 
the  judgment,  and  nothing  else.  The  hability  of  the  defendant  depends 
upon  the  relation  he  bears  to  the  Steel  Company,  and  this,  therefore,  is  a 
necessary  part  of  the  inquiry;  Jnit  the  object  of  the  suit  is  to  obtain  a  satis- 
faction of  the  judgment,  and  the  enforcement  of  his  statutory  liability  is 
merely  a  means  to  that  end.  When  the  money  due  upon  the  judgment  is 
collected,  its  contents  are  recovered,  and  it  is  only  a  step  in  the  process  of 
recovery  to  invoke  the  defendant's  liability  as  a  stockholder.  Corbin  v. 
Black  Hawk  County,  105  U.  S.  659,  26  L.  ed.  1136;  Shoecraft  v.  Blo.xham, 

317 


§  191  JURISDICTION  OF  COURTS 

suits  to  recover  the  contents  of  choses  in  action  relates,  so  far 
as  the  assignors  are  concerned,  to  the  time  when  the  suit  is 
brought.  If  at  that  time  the  assignors  could  have  brought 
suit  in  the  Circuit  Court,  it  is  immaterial  whether  they  could 
have  done  so  when  the  assignment  was  made.®^ 

§  191.  Jurisdiction  of  Federal  Courts — Suits  by  Assignee 
of  Promissory  Note  or  Chose  in  Action — Exceptions  to 
Statutory  Prohibition. 

A  Circuit  Court  has  no  jurisdiction  for  the  recovery  of  the 
contents  of  promissory  notes  or  other  choses  in  action  brought 
in  favor  of  assignees  or  transferees  except  over  (1)  suits  upon 
foreign  bills  of  exchange;  (2)  suits  that  might  have  been 
prosecuted  in  such  court  to  recover  the  said  contents  if  no 
assignment  or  transfer  had  been  made;  (3)  suits  upon  choses 
in  action  payable  to  bearer,  and  made  by  a  corporation. '^- 

Where  the  instruments  sued  on  are  payable  to  bearer,  and 
are  made  by  a  corporation,  they  are  expressly  excepted  by  the 
Judiciary  Act  ®^  from  the  general  rule  prescribed  in  it  that  an 
assignee  or  subsequent  holder  of  a  promissory  note  or  chose 
in  action  could  not  sue  in  a  Circuit  or  District  Court  of  the 
United  States,  unless  his  assignor  or  transferrer  could  have 
sued  in  such  court  .^^ 

The  Circuit  Court  of  the  United  States  for  the  Eastern 
District  of  Louisiana  has  jurisdiction  of  a  suit  brought  in  it 
by  a  citizen  of  New  York  to  recover  from  the  city  of  New 

124  U.  S.  730,  8  Sup.  Ct.  686,  31  L.  ed.  574;  Mexican  Railroad  Co.  v.  David- 
son, 157  U.  S.  201,  15  Sup.  Ct.  563,  39  L.  ed.  672.  The  rule  to  dismiss  is 
made  absolute." 

As  to  merger  in  judgment,  see  Freeman  on  Judgments  (4th  ed.),  §§  221 
ct  seq. 

Suits  by  assignees  under  above  statute,  see  4  Fed.  Stat.  Annot.,  note 
pp.  306  et  seq. 

61  Emsheimer  v.  New  Orleans,  186  U.  S.  33,  46  L.  ed.  1042,  22  Sup.  Ct. 
770. 

62  New  Orleans  v.  Quinlan,  173  U.  S.  191,  43  L.  ed.  664,  19  Sup.  Ct.  329. 
Approving  Newgass  v.  New  Orleans,  33  Fed.  196. 

63  Act  of  August  13,  1888,  chap.  866. 

64  Lake  Co.  Commrs.  v.  Dudley,  173  U.  S.  243,  43  L.  ed.  684,  19  Sup.  Ct. 
398. 

318 


OVEK  CORPORATIONS   (J0NTINUP:D  J^   1<)2 

Orleans  on  a  number  of  certificates,  payable  to  bearer,  made 
by  the  city,  although  the  petition  contains  no  averment  that 
the  suit  could  have  been  maintained  by  the  assignors  of  the 
claims  or  certificates  sued  upon.^^ 

§  192.  When  Federal  Courts  Have  Jurisdiction  of  Suits 
by  Assignee. 

A  suit  filed  in  equity  by  the  assignee  of  a  mortgage  to  set 
aside  tax  deeds  and  a  foreclosure  decree  is  not  a  suit  to  recover 
the  contents  of  a  chose  in  action  within  the  meaning  of  the 
act  of  1875.^^  Where  notes  are  made  by  a  corporation  payable 
to  the  order  of  its  own  treasurer,  a  citizen  of  the  same  State, 
as  a  matter  of  convenience  and  custom,  and  indorsed  and 
delivered  by  him  to  a  bona  fide  holder  who,  a  citizen  of  a 
different  State,  furnishes  the  money  represented  by  the  note 
directly  to  the  corporation,  the  treasurer  is  not  in  fact  an 
assignee  of  the  note  within  the  meaning  of  the  act  of  1888,^' 
and  suit  may  be  brought  by  such  holder  in  the  Circuit  Court 
of  the  United  States  having  jurisdiction  of  the  parties,  not- 
withstanding such  diversity  does  not  exist  as  to  the  treasurer 
first  indorsing  the  note.*^^  In  another  case  the  maker  of  a 
promissory  note  signed  it  entirely  for  the  benefit  of  the  payee, 
who  was  really  the  party  for  whose  use  it  was  made.  The 
maker  and  the  payee  were  citizens  of  the  same  State.  A  citizen 
of  another  State  discounted  the  note,  and  paid  full  considera- 
tion for  it  to  the  payee  who  indorsed  it  to  him.  The  note  not 
being  paid  at  maturity,  the  indorsee,  who  had  not  parted 
with  it,  brought  suit  upon  it  against  the  maker  in  the  Circuit 
Court  of  the  United  States.  It  was  held  that  the  court  had 
jurisdiction,  notwithstanding  the  provision  in  the  act  of  1888  ^^ 
that  such  court  shall  not  have  cognizance  of  a  suit  to  recover 
the  contents  of  a  promissory  note  in  favor  of  an  assignee  or 

65  New  Orleans  v.  Quinlan,  173  U.  S.  191,  43  L.  ed.  664,  19  Sup.  Ct.  329. 

66  Hobe-Peters  Land  Co.  v.  Farr  (U.  S.  C.  C),  170  Fed.  644. 

67  Act  of  August  13,  1888,  25  Stat.  433. 

68  Blair  v.  Chicago,  201  U.  S.  400,  26  Sup.  Ct.  427,  50  L.  ed.  801,  rev'g  132 
Fed.  848. 

ee  Act  of  August  13,  1888,  25  Stat.  433,  434,  chap.  866. 

319 


§§  193,  194  JURISDICTION   OF   COURTS 

subsequent  holder,  unless  such  suit  might  have  been  prosecuted 
in  such  court  if  no  assignment  had  been  made7°  A  bill  filed  by 
the  assignee  of  a  mortgage,  and  holding  only  an  equitable  title, 
to  establish  his  title  and  interest  and  quiet  said  title  and  to 
cancel  tax  deeds  and  a  judgment  of  foreclosure,  is  within  the 
jurisdiction  of  a  Federal  Court  of  equity  even  though  the  tax 
deeds  held  by  defendants  carry  the  constructive  or  presumptive 
possession  of  the  land  and  complainant  is  out  of  possession, 
where  under  the  State  law  the  latter  could  obtain  the  legal 
title  in  time  to  sue  as  above  with  any  possibility  of  success, 
and  as  he  could  not  maintain  ejectment  his  only  remedy  was 
an  action  in  equity.  Such  a  case  is  an  exception  to  the  rule 
that  a  person  out  of  possession  cannot  maintain  a  suit  in  equity 
to  quiet  title  against  a  person  in  possession;  and  to  the  further 
rule  that  the  equitable  and  legal  titles  must  be  joined  in  the 
complainant  before  beginning  suit.'^ 

§  193.  When  Federal  Court  no  Jurisdiction  of  Suit  by 
Assignee —Contract  to  Convey  Land. 

A  Circuit  Court  of  the  United  States  has  no  jurisdiction  over 
a  suit  to  enforce  a  contract  for  the  conveyance  of  land  brought 
in  the  State  where  the  land  is  situated,  by  the  assignee  of  one 
party  to  the  contract  against  the  other  party,  if  both  parties 
to  the  contract  are  citizens  of  the  same  State  although  the 
assignee  is  a  citizen  of  a  different  State.^' 

§  194.  Motive  for  Bringing  Suit  or  in  Obtaining  Citizen- 
ship—Collusive Assignment  or  Transfer  or  Fraud  To  Give 
Jurisdiction. 

Where  the  averments  of  the  bill  are  true,  and  there  is  no 
question  as  to  the  diversity  of  citizenship,  or  any  evidence  that 
a  case  was  fraudulently  created  to  give  jurisdiction  to  the 

70  Holmes  v.  Goldsmith,  147  U.  S.  150,  37  L.  ed.  118,  13  Sup.  Ct.  288. 

71  Hobe-Petprs  Land  Co.  v.  Farr  (U.  S.  C.  C),  170  Fed.  644,  citing  to  the 
exception  Big  Six  Development  Co.  v.  Mitchell,  138  Fed.  279,  70  C.  C.  A. 
569,  1  L.  R.  A.  (N.  S.)  332. 

72  Plant  Investment  Co.  v.  Jacksonville,  T.  &  K.  W.  Ry.  Co.,  152  U.  S. 
71,  38  L.  ed.  358,  14  Sup.  Ct.  483. 

320 


OVER  CORPORATIONS   CONTINUED  §  194 

Federal  Court,  the  case  will  not  be  regarded  as  collusive  merely 
because  the  parties  preferred  to  resort  to  the  Federal  Court 
instead  of  to  a  State  Court;  in  the  absence  of  any  improper  act 
the  motive  for  bringing  the  suit  is  unimportant^^  Or,  to 
state  the  proposition  in  another  form,  where  there  is  a  proper 
cause  of  action  and  diverse  citizenship,  jurisdiction  of  the 
Federal  Courts  exists,  and  the  motive  of  the  creditor  who  de- 
sires to  litigate  in  that  forum  is  immaterial,  and  does  not  affect 
the  jurisdiction;  nor  is  such  jurisdiction  if  it  actually  ex- 
ists, affected  by  the  fact  that  a  receivership  was  in  view 
when  judgments  were  entered.^'*  But  while  jurisdiction  of  the 
United  States  Circuit  Court  exists  even  if  a  complainant's 
motive  in  acquiring  citizenship  was  to  invoke  that  jurisdiction, 
the  citizenship  must  be  real,  and  actually  with  the  purpose 
of  establishing  a  permanent  domicile/^  It  is  an  established 
doctrine,  adhered  to  in  the  Federal  Supreme  Court,  that  the 
constitutional  privilege  of  a  grantee  or  purchaser  of  property, 
being  a  citizen  of  one  of  the  States,  to  invoke  the  jurisdiction 
of  a  Circuit  Court  of  the  United  States  for  the  protection  of 
his  right  as  against  a  citizen  of  another  State,  the  value  of  the 
matter  in  dispute  being  sufficient  for  the  purpose,  cannot  be 
impaired  or  affected  merely  because  of  the  motive  that  induced 
his  grantor  to  convey,  or  his  vendee  to  sell  and  deliver,  the 
property,  provided  such  conveyance  or  such  sale  and  delivery 
was  a  real  transaction  by  which  the  title  passed  without  the 
grantor  or  vendor  reserving  or  having  the  right  or  power  to 
compel  or  require  a  reconveyance  or  return  to  him  of  the 
property  in  question^^    So  a  bona  fide  and  absolute  transfer 

73  Metropolitan  Railway  Receivership,  In  re,  208  U.  S.  90,  52  L.  ed.  403, 
28  Sup.  Ct.  219. 

71  Blair  v.  Chicago,  201  U.  S.  400,  26  Sup.  Ct.  427,  50  L.  ed.  801,  rcv'g 
132  Fed.  848.  See  also  South  Dakota  v.  North  Carolina,  192  U.  S.  286,  24 
Sup.  Ct.  269,  48  L.  ed.  448. 

75  Miller  &  Lux,  Incorp'd,  v.  East  Side  Canal  &  Irrigation  Co.,  211  U.  S. 
293,  53  L.  ed.  189,  29  Sup.  Ct.  Ill ;  Act  of  Congress,  March  3,  1875,  chap.  137, 
§  5,  18  Stat.  470,  472;  Act  of  Congress,  March  3,  1891,  chap.  517,  26  Stat. 
826. 

7«  Lehigh  Mining  &  Mfg.  Co.  v.  Kelly,  160  U.  S.  327,  16  Sup.  Ct.  307,  40 
L.  ed.  444,  cited  in  Acord  v.  Western  Pocahontas  Corp.  (U.  S.  C.  C),  156 

21  321 


§  194  JURISDICTION   OF   COURTS 

of  a  cause  of  action  to  a  citizen  of  another  State  to  enable 
a  suit  to  be  brought  does  not  defeat  jurisdiction.^^  The  fact 
that  a  domestic  corporation  permitted  a  mortgage  on  lands 
owned  by  it  to  be  foreclosed,  and  that  another  corporation 
having  in  part  the  same  officers  and  stockholders  was  organized 
in  another  State,  which  purchased  such  lands  at  the  sale  and 
also  the  stock  of  the  former  corporation,  which  was  thereafter 
dissolved,  is  held  not  sufficient  to  establish  a  collusive  transfer 
of  the  lands,  for  the  purpose  of  enabling  a  suit  in  respect 
thereto  to  be  brought  in  a  Federal  Court,  such  as  deprived  it 
of  jurisdiction  of  such  suit.'^^  Again,  assignments  obtained  by 
plaintifT  without  consideration  and  held  practically  in  trust 
for  the  assignors,  that  is,  where  the  proceeds,  or  some  portion 
of  them  are  to  be  turned  back  to  the  assignors  in  the  event  of 
success  would  constitute  a  collusive  assignment,'''^  but  where 

Fed.  989,  1000.  See  Lehigh  Mining  &  Mfg.  Co.,  In  re,  15G  U.  S.  322,  15 
Sup.  Ct.  375,  39  L.  ed.  438. 

Where  the  organization  of  a  corporation  is  procured  for  beneficial  pur- 
poses in  subdividing  lands  and  irrigating  the  same,  and  exercising  eminent 
domain,  and  there  is  no  evidence  of  any  intention  to  reconvey  the  title  to 
the  land  an  objection  that  there  is  an  organization  of  a  corporation  for  the 
purpose  of  a  fictitious  conveyance  to  it  will  not  be  sustained  in  an  action  by 
a  foreign  corporation  to  quiet  title  to  water  rights,  as  there  is  not  such  col- 
lusion as  to  defeat  jurisdiction.  Irvine  Co.  v.  Bond  (U.  S.  C.  C),  74  Fed. 
849. 

When  transfer  by  partnership  to  corporation  is  not  simulated  or  sham 
so  as  to  oust  court  of  jurisdiction,  see  Slaughter  v.  Mallet  Land  &  Cattle 
Co.  (U.  S.  C.  C.  A.),  141  Fed.  282. 

Jurisdiction  not  defeated  by  selecting  administrator  to  obtain  requisite 
citizenship  for  jurisdiction,  see  Goff  v.  Norfolk  &  W.  R.  Co.  (U.  S.  C.  C), 
36  Fed.  299. 

When  not  sufficiently  clear  that  purpose  of  incorporation  was  solely  to 
invoke  jurisdiction  and  so  defeat  it,  see  Percy  Summer  Club  v.  Astle  (LT.  S. 
C.  C.  A.),  163  Fed.  1;  s.  c,  166  Fed.  1020  (mem.),  denying  rehearing. 

"  Cole  v.  Philadelphia  &  Easton  Ry.  Co.  (U.  S.  C.  C),  140  Fed.  944. 

78  Syllabus  to  Acord  v.  Western  Pocahontas  Corp.  (U.  S.  C.  C),  156  Fed. 
989. 

79  Hartford  Fire  Ins.  Co.  v.  Erie  Rd.  Co.  (U.  S.  C.  C),  172  Fed.  899,  902, 
citing  Farmington  v.  Pillsbury,  114  U.  S.  138,  5  Sup.  Ct.  807,  29  L.  ed.  114; 
Lehigh  Mining  Co.  v.  Kelly,  160  U.  8.  327,  16  Sup.  Ct.  307,  40  L.  ed  444; 
Lake  County  Commissioners  v.  Dudley,  173  U.  S.  243,  19  Sup.  Ct.  398,  43 
L.  ed.  684;  Waite  v.  Santa  Cruz,  184  U.  S.  302,  22  Sup.  Ct.  327,  46  L.  ed. 
552. 

322 


OVER   CORPORATIONS   CONTINUED  §  195 

the  plaintiff  under  such  circumstances  obtains  no  f;n.'at(>r  rights 
of  jurisdiction  than  the  assignor  had  itself  and  the  jurisdictional 
amount  is  exceeded,  such  assignment  is  not  collusive  so  as  to 
deprive  a  Federal  Court  of  jurisdiction.*" 

§  195.  Same  Subject — When  Jurisdiction  Defeated. 

The  facts  may  be  such  as  to  make  a  transaction  a  mere 
device  to  give  jurisdiction  to  the  Circuit  Court,  and  constitute 
a  fraud  upon  said  court,  as  well  as  a  wrong  to  the  defendant, 
and  prevent  the  jurisdiction  of  the  court  from  being  exercised. 
Thus  in  a  Federal  Supreme  Court  case  citizens  of  Virginia  were 
in  possession  of  lands  in  that  State,  claiming  title,  to  which 
also  a  corporation  organized  under  the  laws  of  Virginia  had 
for  some  years  laid  claim.  In  order  to  transfer  the  corpora- 
tion's title  and  claim  to  a  citizen  of  another  State,  thus  giving 
the  Federal  Circuit  Court  jurisdiction  over  an  action  to  recover 
the  lands,  the  stockholders  of  the  Virginia  corporation  organized 
themselves  into  a  corporation  under  the  laws  of  Pennsylvania, 
and  the  Virginia  corporation  then  conveyed  ^he  lands  to  the 
Pennsylvania  corporation,  and  the  latter  corporation  brought 
action  against  citizens  of  Virginia  to  recover  possession  of  the 
land.  No  consideration  passed  for  the  transfer,  and  at  the 
time  of  suit  both  corporations  were  in  existence.*^  A  corpora- 
tion organized  by  citizens  of  one  State  in  another  State  simply 
for  the  purpose  of  bringing  suits  on  causes  of  action  against 
citizens  of  the  former  State  in  the  Federal  Courts  where  juris- 
diction would  not  otherwise  exist  is  a  sham,  and  *^  a  suit  brought 
by  such  a  corporation  does  not  really  and  substantially  involve 
a  dispute  within  the  jurisdiction  of  the  Circuit  Court  and 
should  be  dismissed  as  soon  as  such  facts  have  been  asccr- 

80  Hartford  Fire  Ins.  Co.  v.  Erie  R.  Co.  (U.  S.  C.  C),  172  Fed.  899,  dis- 
tinguishing Lake  County  Commissioners  v.  Dudley,  173  U.  S.  243,  19  Sup. 
Ct.  398,  43  L.  ed.  684,  in  that  it  did  not  appear  therein  that  Dudley  had 
procured  enough  coupons  from  any  one  of  the  nonresident  assignors  to 
bring  the  case  as  to  him  up  to  the  jurisdictional  amount. 

81  Lehigh  Mining  &  Mfg.  Co.  v.  Kelly,  160  U.  S.  327,  16  Sup.  Ct.  307,  40 
L.  ed.  444.  See  Lehigh  Mining  &  Mfg.  Co.,  In  re,.  156  U.  S.  322,  39  L.  ed.  438, 
15  Sup.  Ct.  375. 

82  Under  §  5  of  the  act  of  March  3,  1875,  chap.  137,  18  Stat.  470. 

323 


§  196  JURISDICTION   OF  COURTS 

tained.*'  Assignment  of  stock  and  bonds  of  little  value  to  a 
stenographer  in  the  office  of  a  corporation's  attorney  to  enable 
him  to  sign  a  bill  in  the  Federal  Court  for  the  appointment  of 
a  receiver  constitutes  a  fraud  on  the  court's  jurisdiction  and 
defeats  the  suit.*"*  So  where  the  complainant  corporation  was 
organized  for  the  sole  purpose  of  invoking  the  jurisdiction  of 
the  Federal  Circuit  Court,  and  any  decree  in  its  favor  would 
be  really  under  the  control  and  for  the  benefit  of  another 
corporation  of  the  same  State  as  defendant,  the  suit  should 
be  dismissed  as  one  so  organized  for  the  purpose  of  creating  a 
case  cognizable  in  the  Circuit  Court.^  And  where  from  the 
evidence  of  the  plaintiff  below,  it  is  clear  that  he  does  not  own 
any  of  the  coupons  sued  on,  and  that  his  name  is  being  used 
with  his  own  consent,  to  give  jurisdiction  to  the  Circuit  Court 
to  render  judgment  for  persons  who  could  not  have  invoked 
the  jurisdiction  of  a  Federal  Court,  the  trial  court,  on  its  own 
motion,  should  have  dismissed  the  case,  without  considering 
the  merits.*^ 

§  196.  Jurisdiction — Rearrangement  of  Parties — Diverse 
Citizenship. 

An  arrangement  of  parties  which  is  merely  a  contrivance 
between  friends  to  found  jurisdiction  on  diverse  citizenship 
in  the  Circuit  Court  will  not  avail,  and  when  it  is  obvious  that 

83  Southern  Realty  Investment  Co.  v.  Walker,  211  U.  S.  603,  53  L.  ed. 
346,  29  Sup.  Ct.  211. 

84  Kreider  v.  Cole  (U.  S.  C.  C.  A.),  149  Fed.  647. 

85  Miller  &  Lux,  Incorp'd,  v.  East  Side  Canal  &  Irrigation  Co.,  211  U.  S. 
293,  53  L.  ed.  189,  29  Sup.  Ct.  Ill,  citing  Steigleder  v.  McQuesten,  198 
U.  S.  141,  143,  49  L.  ed.  986,  25  Sup.  Ct.  616;  Waite  v.  Santa  Cruz,  184 
U.  S.  302,  325,  22  Sup.  Ct.  327,  46  L.  ed.  552;  Lehigh  Mining  &  Mfg.  Co.  v. 
Kelly,  160  U.  S.  327,  40  L.  ed.  444,  16  Sup.  Ct.  307,  which  is  cited  in  Lake 
County  Commissioners  v.  Dudley,  173  U.  S.  243,  251,  43  L.  ed.  684,  19  Sup. 
Ct.  398;  Turnbull  v.  Ross,  141  Fed.  649,  652;  Scott  v.  Mineral  Development 
Co.,  130  Fed.  497,  499;  Board  of  Commissioners  of  Lake  County  v.  Schrad- 
skey,  97  Fed.  1,2;  Alabama  Great  Southern  Rd.  Co.  v.  Carroll,  84  Fed.  772, 
780;  Ashley  v.  Board  of  Supervisors,  83  Fed.  534,  537;  Jackson  v.  Fidehty 
&  Casualty  Co.,  75  Fed.  359,  370. 

86  Lake  Co.  Commrs.  v.  Dudley,  173  U.  S.  243,  43  L.  ed.  684,  19  Sup.  Ct. 
398. 

324 


OVER    CORPORATIONS    CONTINUED  §  196 

a  party  who  is  really  on  complainant's  side  has  been  made 
a  defendant  for  jurisdictional  reasons,  and  for  the  purpose  of 
reopening  in  the  United  States  courts  a  controversy  already 
decided  in  the  State  courts,  the  Court  will  look  beyond  the  |)lead- 
ings  and  arrange  the  parties  according  to  their  actual  sides  in 
the  dispute.*^ 

87  Dawson,  City  of,  v.  Columbia  Ave.  Sav.  Fund,  S.  D.  T.  &  T.  Co.,  197 
U.  S.  178,  25  Sup.  Ct.  420,  49  L.  ed.  713. 


32/ 


JURISDICTION   OF  COURTS 


CHAPTER  Xin 


JURISDICTION    OF    COURTS    OVER    CORPORATIONS  CONTINUED 


197.  Nature  of  Jurisdiction  of  Na- 

tional Courts — Extent  of 
Resort  to  Common  Law. 

198.  Federal     Jurisdiction — Effect 

of  State  Statutes — Rights 
and  Remedies. 

199.  Power  of  State  to  Limit  Juris- 

diction of  Its  Courts — 
Power  to  Administer  Com- 
mon Law. 

200.  Jurisdiction    —    Consent    of 

Parties. 

201.  Jurisdiction  —  Appearance  — 

Consent — Waiver. 
202    Waiver  of  Jurisdictional  De- 
fect as  to   Particular  Dis- 
trict. 

203.  Subsequent  Change  in  Condi- 

tions After  Jurisdiction  of 
Circuit  Court  Has  Attached. 

204.  Where  Case  Goes  More  Than 

Once  to  Highest  State 
Court — Final  Judgment — 
Writ  of  Error. 

205.  Jurisdiction    of   Federal   Cir- 

cuit Courts  Under  Judiciary 
Act  of  1888— Removal  of 
Suits. 

206.  Removal  of  Suits— What  Rec- 

ord Must  Show. 

207.  No  Cause  Removable  Unless 

It  Is  One  of  Which  Circuit 
Courts  Given  Original  Ju- 
risdiction. 

208.  Federal  Question  or  Right — 

When  Court  Has  Jurisdic- 
tion— Instances. 

209.  Federal  Question  or  Right — 

When  Court  no  Jurisdiction 
— Instances. 

32() 


§  210.  Presentment  of  Federal  Ques- 
tion— Record. 

211.  Removal   of  Suits — Corpora- 

tion Created  by  Congress — 
Constitution  and  Laws  of 
United  States — Separable 
Controversy. 

212.  Removal   of   Suits — Coqiora- 

tions  Created  by  Congress 
— National  Banks. 

213.  Removal  of  Suits — Separaljle 

Controversy — Joint  Action. 

214.  Removal  of  Suits — Separable 

Controversy — Joint  Action 
— Torts — Diversity  of  Citi- 
zenship. 

215.  Removal  of  Suits — Separable 

Controversy — Joint  Action 
— Fraudulent  Joinder. 

216.  Removal  of  Suits — Separable 

Controversy — Joint  Action 
— What  Record  Must  Show. 

217.  Denial    of    Petition    for    Re- 

moval— Petitioners'  Right 
to  Elect  Remedy. 

218.  Removal  of  Suit  Denied   in 

State  Court — Filing  Answer 
and  Record — Asserting  Af- 
firmative Remedy  and  De- 
nial of  Jurisdiction. 

219.  Federal    Circuit    Court    May 

Determine  Removability  of 
Cause  and  Protect  Such 
Jurisdiction — Injunction. 

220.  Effect    LIpon   Jurisdiction   of 

State  Court  of  Removal  of 
Cause. 

221.  Jurisdiction    of    Federal    Su- 

preme Court  .\f(er  Removal 
Ordered  by  Circuit  Court. 


OVER  CORPORATIONS   CONTINUED  §§  197,  198 

§  197.  Nature  of  Jurisdiction  of  National  Courts— Extent 
of  Resort  to  Common  Law. 

While  the  jurisdiction  of  tlie  national  courts  is  limited  they 
are  not  inferior  courts,  and  their  judgments  present  every 
attribute  of  finality  and  estoppel  which  appertain  to  those  of 
general  jurisdiction.^  The  common  law  cannot  be  resorted  to  for 
aid  in  giving  jurisdiction  to  the  Federal  Courts,  but  only  in  decid- 
ing certain  questions  after  jurisdiction  is  otherwise  obtained.^ 

§  198.  Federal  Jurisdiction— Effect  of  State  Statutes- 
Rights  and  Remedies. 

A  State  cannot  by  any  statutory  provisions  withdraw  a  suit 
in  which  there  is  a  controversy  between  citizens  of  different 
States,  from  the  cognizance  of  the  Federal  Courts.^  The  equity 
jurisdiction  of  the  Federal  Courts  is  not  subject  to  Umitations 
or  restraints  by  State  legislation  giving  jurisdiction  to  State 
Courts  over  similar  matters."* 

Where  an  insurance  company,  citizen  of  one  State,  has 
voluntarily  accepted  a  license  from  another  State,  and  has 
been  sued  in  a  court  of  that  State,  the  fact  that  the  license  is 
subject  to  be  revoked  if  the  company  should  remove  the  action 
to  the  Federal  Courts,  furnishes  no  ground  for  appealing  to  a 
Federal  Court  to  take  jurisdiction  of  a  suit  in  equity  to  cancel 
the  policy  if  otherwise  the  court  would  have  no  jurisdiction.^ 
But  a  foreign  corporation  may  be  precluded  from  enforcing 

1  First  National  Bk.  of  Belle  Fourche,  In  re  (U.  S.  C.  C.  A.),  152  Fed.  64. 
Limited  and  special  jurisdiction  of  Federal  Supreme  Court,  see  Rhode 

Island  V.  Massachusetts,  12  Pet.  (37  U.  S.),  657,  9  L.  ed.  1233. 

2  United  States  v.  New  Bedford  Bridge,  1  Woodb.  &  Min.  (U.  S.  C.  C, 
1846),  401  Fed.  Cas.  No.  15,867.  Indictment;  obstructing  navigable  waters 
by  bridge;  necessity  of  further  legislation  in  Congress  to  punish  crimes; 
non jurisdiction  in  Federal  Courts  over  crimes  unless  some  part  of  Consti- 
tution or  a  treaty  or  some  law  of  Congress  makes  it  a  crime. 

3  Madisonville  Traction  Co.  v.  Saint  Bernard  Min.  Co.,  196  U.  S.  239,  49 
L.  ed.  262,  25  Sup.  Ct.  251.  See  South  Dakota  Cent.  Ry.  Co.  v.  Chicago, 
M.  &  St.  P.  Ry.  Co.,  141  Fed.  582. 

4  Waterman  v.  Canal-Louisiana  Bank  &  Trust  Co.,  215  U.  S.  33,  30  Sup. 
Ct. ,  54  L.  ed. ;  National  Surety  Co.  v.  State  Bank,  120  Fed.  593. 

5  Cable  V.  United  States  Life  Ins.  Co.,  191  U.  S.  288,  48  L.  ed.  1S8,  24 
Sup.  Ct.  74. 

327 


§  198  JURISDICTION   OF   COURTS 

by  action  in  a  State  or  Federal  Court  a  contract  made  in  the 
State  where  its  statute  forbids  it  to  do  business  therein  until 
it  has  filed  a  declaration,  appointed  an  agent  upon  whom  the 
service  of  process  may  be  made  and  prohibiting  suing  in  the 
courts  until  it  has  done  so.^  A  State  also  has  the  power  to 
prevent  a  foreign  corporation  from  doing  business  at  all  within 
its  borders  unless  such  prohibition  is  so  conditioned  as  to 
violate  the  Federal  Constitution,  and  a  State  statute  which, 
without  requiring  a  foreign  insurance  company  to  enter  into 
any  agreement  not  to  remove  into  the  Federal  Courts  cases 
commenced  against  it  in  the  State  Court,  provides  that  if  the 
company  does  so  remove  such  a  case  its  hcense  to  do  business 
within  the  State  shall  thereupon  be  revoked  is  unconstitu- 
tional.'''  Statutes  and  decisions  of  the  courts  of  last  resort  of 
the  several  States  defining  what  may  or  may  not  constitute  a 
cloud  on  title,  what  may  or  may  not  constitute  title  itself  or 
claim  or  color  of  title,  and  what  may  by  possession  ripen  into 
good  title,  although  void  in  initio,  are  parts  of  the  substantive 
law  of  such  States,  affecting  real  estate  therein,  and  are  of 
controlling  influence  in  Federal  Courts  held  within  such  States, 
under  well-settled  authority.*  But  rights  and  remedies  in 
equity  in  the  Federal  Courts  may,  however,  so  it  is  held,  be 
enlarged  since  a  party  by  going  into  such  courts  may  avail 
himself  of,  and  does  not  lose  any  right  or  proper  remedy  which 
he  might  have  had  in  the  State  Courts  in  the  same  locaUty; 
that  is,  statutory  rights  of  such  party  available  in  the  State 
Courts  may  be  enforced  in  the  Federal  Courts  in  accordance 
with  the  nature  of  the  right  or  remedy  whether  it  be  at  law, 
in  equity  or  admiralty.^ 

fi  La  Moine  Lumber  &  Traction  Co.  v.  Kesteson  (U.  S.  C.  C),  171  Fed.  9S0. 

7  Security  Mutual  Life  Ins.  Co.  v.  Prewitt,  Ins.  Comm.,  202  U.  S.  246,  50 
L.  ed.  1013,  26  Sup.  Ct.  619,  following  Doyle  v.  Continental  Ins.  Co.,  94 
U.  S.  535,  24  L.  ed.  148,  and  held  not  to  be  overruled  by  Barron  v.  Burnside, 
121  U.  S.  186,  7  Sup.  Ct.  931,  30  L.  ed.  915,  or  any  other  decision  of  the 
Supreme  Court. 

8  Acord  V.  Western  Pocahontas  Corporation  (U.  S.  C.  C),  156  Fed.  989, 
998,  per  Dayton,  Dist.  J. 

8  National  Surety  Co.  v.  State  Bank,  120  Fed.  593;  see  Davis  v.  Gray, 
16  Wall.  (U.  S.)  203,  221,  21  L.  ed.  447. 

328 


OVER  CORPORATIONS   CONTINUED  §  199 

§  199.  Power  of  State  to  Limit  Jurisdiction  of  Its  Courts 
— Power  to  Administer  Common  Law. 

The  State  Court  determines  the  extent  and  limitations  of 
powers  conferred  on  its  corporations.  ^^  Subject  to  the  restric- 
tions of  the  Federal  Constitution  the  State  may  determine 
the  limits  of  the  jurisdiction  of  its  courts  and  the  character 
of  the  controversies  which  shall  be  heard  in  them.  The  State's 
own  policy  determines  the  extent  to  which  it  will  entertain 
in  its  courts  transitory  actions  where  the  causes  of  action  have 
arisen  in  other  jurisdictions.  But  any  policy  adopted  by  a 
State  must  operate  in  the  same  way  on  its  own  citizens  and 
those  of  other  States;  privileges  afforded  to  one  class  must 
also  be  extended  to  the  other.  If  a  State  discriminates  as  to 
the  right  to  sue  in  favor  of  its  own  citizens  against  citizens  of 
other  States  such  act  conflicts  with  the   provisions  of  the 

State  legislature  cannot  change  or  modify  maritime  law.  Butler  v.  Bos- 
ton &  S.  Steamship  Co.,  130  U.  S.  527,  32  L.  ed.  1017,  9  Sup.  Ct.  612,  6  Rd. 

6  Corp.  L.  J.  124,  39  Alb.  L.  J.  488.    See  the  S.  A.  McCaulley  (U.  S.  D.  C), 
99  Fed.  302. 

Exclusive  jurisdiction  of  Federal  Courts  where  a  maritime  lien  exists  by 
reason  of  maritime  law,  cannot  be  ousted  by  State  statute  declaring  a  lien 
in  such  cases.    Scatcherd  Lumber  Co.  v.  Pike,  113  Ala.  555,  21  So.  136. 

See  further  as  to  effect  of  State  laws  upon  Federal  jurisdiction  the  follow- 
ing cases:  Taylor  v.  Illinois  Cent.  R.  Co.  (U.  S.  C.  C),  89  Fed.  119  (foreign 
corporation's  compliance  with  State  laws  as  to  incorporation;  conditions 
precedent  to  doing  business;  diverse  citizenship;  Federal  Courts  not  de- 
prived of  jurisdiction);  Taylor  v.  Louisville  &  Nashville  R.  Co.  (U.  S.  C. 
C.  A.),  88  Fed.  350,  31  C.  C.  A.  537,  60  U.  S.  App.  166  (Federal  Courts  not 
governed  by  State  statute  prohibiting  injunction  to  restrain  collection  of 
illegal  tax);  Eastern  Building  &  L.  Assn.  v.  Bedford  (U.  S.  C.  C),  88  Fed. 

7  (noncompliance  by  corporation  with  State  statute  as  to  filing  charter; 
when  Federal  Court  may  enforce  contract  to  repay  loan  even  though  State 
Court  might  refuse  to  do  so);  Duncan  v.  Atchison,  Topeka  &  Santa  Fe 
Rd.  Co.  (U.  S.  C.  C.  A.),  72  Fed.  808,  19  C.  C.  A.  202,  44  U.  S.  App.  427 
(jurisdiction  of  Federal  Circuit  Court  of  Appeals  by  writs  of  error  on  bills 
of  exceptions  is  based  upon  and  controlled  by  acts  of  Congress  and  practice 
and  rules  of  Federal  Courts  regardless  of  State  statutes  or  practice  of  State 
Courts);  Barling  v.  Bank  of  British  North  America  (U.  S.  C.  C.  A.),  50  Fed. 
260,  7  U.  S.  App.  194  (conditions  as  to  compliance  by  banking  corporations 
with  State  statute,  as  prerequisites  to  suing  in  State  Courts  not  binding  on 
Federal  Courts);  Bank  of  British  North  America  v.  Barling  (U.  S.  C.  C), 
44  Fed.  641,  33  Am.  &  Eng.  Corp.  Cas.  53  (same  point  as  last  preceding  case). 

10  Bui-ea  College  v.  Kentucky,  211  U.  S.  45,  53  L.  ed.  81,  29  Sup.  Ct.  33. 

329 


§  200  JURISDICTION   OF  COURTS 

Federal  Constitution."  So  consistently  with  the  Constitution  of 
the  United  States  ^^  a  State  may  deny  jurisdiction  to  the  courts 
of  the  State  over  suits  by  a  corporation  of  another  State 
against  a  corporation  of  another  State  on  a  foreign  judgment.^^ 
And  a  State  statute  providing  that  no  action  can  be  main- 
tained in  the  courts  of  the  State  for  wrongful  death  occurring 
in  another  State  except  where  deceased  was  a  citizen  of  the 
State  enacting  said  statute,  the  restriction  operating  equally 
upon  representatives  of  the  deceased  whether  they  are  citizens 
of  such  State  or  of  other  States,  does  not  violate  the  privilege 
and  immunity  provision  of  the  Federal  Constitution.^^ 

The  highest  court  of  a  State  may  administer  the  common 
law  according  to  its  own  understanding  and  interpretation 
thereof,  being  only  amenable  to  review  in  the  Federal  Supreme 
Court  where  some  immunity  or  privilege  created  by  the  Federal 
power  has  been  asserted  and  denied  .^^ 

§  200.  Jurisdiction — Consent  of  Parties. 

Consent  of  parties  can  never  confer  jurisdiction  upon  a 
Federal  Court .^^  And  the  consent  of  a  State  to  be  sued  in  its 
own  courts  by  a  creditor  does  not  give  that  creditor  a  right  to 
sue  in  a  Federal  Court.^''  Where  the  State  prescribes  condi- 
tions under  which  a  court  may  act  litigants  cannot  dispense 

11  Chambers  v.  Baltimore  &  Ohio  Rd.  Co.,  207  U.  S.  142,  52  L.  ed.  143,  28 
Sup.  Ct.  34,  aff'g  73  Ohio  St.  1,  cited  in  General  Oil  Co.  v.  Crane,  209  U.  S. 
211,  224.  See  St.  Louis  &  Iron  Mountain  Ry.  Co.  v.  Taylor,  210  U.  S.  281, 
52  L.  ed.  1061,  28  Sup.  Ct.  616. 

12  Art.  IV,  §  1. 

13  Anglo-American  Provision  Co.  v.  Davis  Provision  Co.,  No.  1,  191  U.  S. 
373,  48  L.  ed.  225,  24  Sup.  Ct.  92. 

H  Chambers  v.  Baltimore  &  Ohio  Rd.  Co.,  207  U.  S.  142,  52  L.  ed.  143, 
28  Sup.  Ct.  34,  aff'g  73  Ohio  St.  1. 

15  Pennsylvania  R.  R.  Co.  v.  Hughes,  191  U.  S.  477,  24  Sup.  Ct.  132,  48 
L.  ed.  2G8,  aff'g  202  Pa.  222,  51  Atl.  990. 

18  Thomas  v.  Board  of  Trustees  of  the  Ohio  State  University,  195  U.  S. 
207,  25  Sup.  Ct.  24,  49  L.  ed.  160;  Minnesota  v.  Northern  Securities  Co., 
194  U.  S.  48,  24  Sup.  Ct.  598,  48  L.  ed.  870;  Olds  Wagon  Works  v.  Benedict* 
(U.  S.  C.  C.  A.),  67  Fed.  1.    See  next  following  section,  herein. 

17  Murray  v.  Wilson  Distillery  Co.,  213  U.  S.  151,  53  L.  ed.  458,  29  Sup. 
Ct.  458,  rev'g  161  Fed.  152,  citing  Chandler  v.  Dix,  194  U.  S.  590,  48  L.  ed. 
1129,  24  Sup.  Ct.  766. 

330 


OVER  CORPORATIONS   CONTINUED  §  201 

with  such  conditions,  for  in  such  case  the  particular  condition 
or  status  of  the  defendant  is  made  a  jurisdictional  fact.^*  A 
court  cannot  acquire  jurisdiction  by  consent  where  the  law 
conferring  and  limiting  the  court's  jurisdiction  does  not  confer 
it.  And  a  complainant  may  be  dismissed  at  the  close  of  a  trial 
for  want  of  jurisdiction,  even  though  the  defendant  corpora- 
tion appears  generally  and  answers  and  does  not  object  to  the 
want  of  jurisdiction.^'* 

§  201.  Jurisdiction — Appearance — Consent — Waiver. 

While  a  general  appearance  in  the  Circuit  Court  after  re- 
moval may  amount  to  a  waiver  of  objection  to  the  jurisdiction 
if  some  Circuit  Court  has  jurisdiction  of  the  cause,  neither 
appearance  nor  consent  can  confer  jurisdiction  where  no  Circuit 
Court  has  jurisdiction  of  the  controversy .^^    When  a  defendant 

18  Davidsburgh  v.  Knickerbocker  Life  Ins.  Co.,  90  N.  Y.  526  (appeal  from 
judgment  of  General  Term  of  the  City  Court  of  Brooklyn),  citing  Risley  v. 
Phoenix  Bank,  83  N.  Y.  318,  337,  38  Am.  St.  Rep.  421;  Wheelock  v.  Lee, 
74  N.  Y.  495;  Hoag  v.  Lamont,  60  N.  Y.  96. 

19  Davidsburgh  v.  Knickerbocker  Life  Ins.  Co.,  90  N.  Y.  526,  cited  in 
Skinner  v.  Jordan,  91  N.  Y.  Supp.  323,  46  Misc.  93  (to  point  that  question 
of  jurisdiction  can  be  raised  at  any  time) ;  Tyroler  v.  Gummersback,  59  N.  Y. 
Supp.  319,  321,  28  Misc.  161;  Colebrook,  In  re,  55  N.  Y.  Supp.  861,  863,  26 
Misc.  142  (to  point  that  voluntary  appearance  of  one  not  an  inhabitant 
does  not  give  jurisdiction);  Smith  v.  Crocker,  43  N.  Y.  Supp.  427,  430,  14 
App.  Div.  250,  4  Ann.  Cas.  81;  Gundhn  v.  Hamburg-American  Packet  Co., 
28  N.  Y.  Supp.  572,  575,  8  Misc.  291,  296,  31  Abb.  N.  C.  437.  It  was  also 
held  in  the  principal  case  that  a  statute  conferring  jurisdiction  upon  a  City 
Court  in  cases  where  any  of  the  defendants  shall  reside  or  be  personally 
served  with  summons  within  said  city  apphed  to  natural  persons  and  not 
to  corporations. 

2u  Winn,  In  re,  213  U.  S.  458,  53  L.  ed.  873,  29  Sup.  Ct.  515.  A  case  of  an 
application  for  a  writ  of  mandamus  to  a  District  Judge  acting  as  Circuit 
Judge.  The  petition  was  for  a  rule  to  show  cause  why  mandamus  should 
not  issue  commanding  the  judge  to  remand  the  case  to  the  State  Court. 
The  petitioner,  an  assignee  of  the  right  of  action  of  a  shipper,  brought  in  a 
State  Court  an  action  at  law  against  an  express  company  for  the  transpor- 
tation of  a  boar  whereby  the  animal  was  killed;  citizenship  of  the  plaintiff 
or  his  assignor  was  not  alleged,  but  that  of  defendant  was  alleged  as  of  an- 
other State.  The  court,  per  Mr.  Justice  Moody,  said  upon  the  point  in  the 
text:  "A  subordinate  question  must  receive  some  attention.  It  is  said  that 
the  petitioner  in  this  case  appeared  generally  in  the  Circuit  Court  after  the 
removal  of  the  case,  and  thereby  waived  his  right  to  object  to  the  juristlic- 

331 


§  201  JURISDICTION   OF  COURTS 

makes  no  appearance  in  the  State  Court  or  in  the  Circuit  Court 
except  for  the  purpose  of  raising  the  question  of  jurisdiction 
and  removing  the  case  to  the  Federal  Court,  such  proceedings 
do  not  amount  to  a  general  appearance. ^^  Nonresident  de- 
tion,  and  In  re  Moore,  209  U.  S.  490,  52  L.  ed.  904,  28  Sup.  Ct.  706,  is  cited 
in  support  of  the  position.  But  that  case  simply  held  that  where  there  was  a 
diversity  of  citizenship,  which  gave  jurisdiction  to  some  Circuit  Court,  the 
objection  that  there  was  no  jurisdiction  in  a  particular  district  might  be 
waived  by  appearing  and  pleading  to  the  merits,  and  anything  to  the  con- 
trary said  in  Ex  parte  Wisner,  203  U.  S.  449,  51  L.  ed.  264,  27  Sup.  Ct.  150, 
was  overruled,  though  the  Wisner  case  was  otherwise  left  untouched.  See 
Western  Loan  &  Sav.  Co.  v.  Butte  &  Boston  Mining  Co.,  210  U.  S.  368,  369, 
52  L.  ed.  1101,  28  Sup.  Ct.  720.  Here,  however,  is  a  case  where,  upon  its 
face,  no  Circuit  Court  of  the  United  States  had  jurisdiction  of  the  contro- 
versy, originally  or  by  removal.  In  such  a  case  the  consent  of  the  parties 
cannot  confer  jurisdiction.  Louisville  &  Nashville  R.  R.  v.  Motley,  211  U.  S. 
149,  53  L.  ed.  126,  29  Sup.  Ct.  42,  and  cases  cited." 

21  Commercial  Mutual  Accident  Co.  v.  Davis,  213  U.  S.  245,  53  L.  ed.  782, 
29  Sup.  Ct.  445. 

As  to  effect  of  appearance,  see  the  following  cases: 

United  States:  Davidson  Marble  Co.  v.  Gibson,  213  U.  S.  10,  53  L.  ed.  675, 
29  Sup.  Ct.  324  (holding  that  a  defendant,  having  a  statutory  right  to  ap- 
pear specially  and  object  to  the  jurisdiction  and  the  right  to  appeal  to  the 
Federal  Supreme  Court  if  the  objection  be  overruled,  cannot  be  compelled 
by  a  rule  of  court  to  waive  the  objection  and  appear  generally;  and  that 
Rule  22  of  the  Circuit  Court  of  the  United  States  for  the  Ninth  Circuit  re- 
quiring a  general  appearance  if  the  Circuit  Court  overrule  such  objection  is 
inconsistent  with  §  918,  Rev.  Stat.,  and  therefore  invahd,  as  the  jurisdiction 
of  the  Circuit  Court  is  fixed  by  statute  and  a  rule  of  court  inconsistent  with 
the  statute  is  invahd) ;  Gunter  v.  Atlantic  Coast  Line  Rd.  Co.,  200  U.  S.  273, 
50  L.  ed.  477,  26  Sup.  Ct.  252  (suit  against  State  officers  to  enjoin  enforcing 
a  tax;  when  appearance  by  attorney-general  amounts  to  waiver  by  State 
of  immunity  from  suit);  Wabash  Western  Ry.  Co.  v.  Brow,  164  U.  S.  271, 
41  L.  ed.  431,  17  Sup.  Ct.  126;  s.  c,  65  Fed.  941,  13  C.  C.  A.  222  (want  of 
jurisdiction;  when  petition  for  removal  not  considered  like  a  general  appear- 
ance as  a  waiver  of  objection  to  jurisdiction) ;  Interior  Construction  &  Imp. 
Co.  V.  Gibney,  160  U.  S.  217,  16  Sup.  Ct.  272,  40  L.  ed.  401  (jurisdiction  of 
Circuit  Court  waiver  by  general  appearance) ;  Goldey  v.  Morning  News,  156 
U.  S.  518,  39  L.  ed.  517,  15  Sup.  Ct.  559  (petition  for  removal;  foreign  cor- 
poration; special  appearance;  nonwaiver  of  objection  to  jurisdiction);  Gal- 
veston, H.  &  S.  Ry.  Co.  V.  Gonzales,  151  U.  S.  496,  38  L.  ed.  248,  14  Sup.  Ct. 
401  (special  appearance;  nonresidence;  when  State  statute  making  an  ap- 
pearance a  waiver  not  applicable  to  actions  in  United  States  Circuit  Court 
under  Rev.  Stat.,  §  914);  Central  Trust  Co.  v.  McGeorge,  151  U.  S.  129,  14 
Sup.  Ct.  286,  38  L.  ed.  98  (voluntary  submission  of  corporation  to  jurisdic- 
tion of  United  States  Circuit  Court;  stockholders  and  creditors  bound  by); 
Mexican  Central  Ry.  Co.  v.  Pinkney,  149  U.  S.  194,  13  Sup.  Ct.  859,  37  L. 

332 


OVER   CORPORATIONS   CONTINUED  §  201 

fendants  appearing  in  the  Circuit  Court  under  protest  for  tlu; 
sole  purpose  of  denying  jurisdiction  do  not  waive  the  condi- 
tion under  the  statute  of  1875 -^  that  any  judgment  of  the 
court  shall  affect  only  property  within  the  district.^^ 

ed.  699  (State  statute  making  special  appearance  to  challenge  jurisdiction 
a  general  appearance  so  as  to  confer  jurisdiction  over  the  person  not  binding 
upon  Federal  Courts  under  Rev.  Stat.,  §  914) ;  Texas  &  Pacific  Ry.  Co.  v. 
Cox,  145  U.  S.  593,  12  Sup.  Ct.  905,  36  L.  ed.  829  (receiver's  right  to  be  sued 
in  certain  district  is  personal  privilege  which  he  may  waive  by  appearing 
and  answering) ;  Henderson  v.  Carbondale  Coal  &  Coke  Co.,  140  U.  S.  25, 
35  L.  ed.  332,  11  Sup.  Ct.  691  (when  a  party  who  is  ordered  to  appear  in  a 
pending  suit  in  equity  voluntarily  appears,  without  service  of  process,  and 
answers,  setting  up  his  claims,  it  is  too  late  for  him  to  object  that  there  was 
error  in  the  order) ;  Fitzgerald  &  M.  Const.  Co.  v.  Fitzgerald,  137  U.  S.  98, 
11  Sup.  Ct.  36,  34  L.  ed.  608,  9  Ry.  &  Corp.  L.  J.  55  (voluntary  appearance 
by  nonresident  without  service  upon  him  and  pleading  to  merits  makes  him 
subject  to  a  judgment  against  him);  Clark  v.  Barnard,  108  U.  S.  436,  27 
L.  ed.  780,  2  Sup.  Ct.  878  (railroad  corporations;  when  voluntary  appear- 
ance by  State  confers  jurisdiction);  Commercial  &  Railroad  Bank  v.  Slo- 
comb,  14  Pet.  (39  U.  S.)  60,  10  L.  ed.  354  (corporations;  appearance  by 
attorney  is  proper) ;  Mecke  v.  Valley  Town  Mineral  Co.  (U.  S.  C.  C.) ,  89  Fed. 
•114  (petition  for  removal  to  Federal  Court  not  a  general  appearance); 
Noonan  v.  Delaware,  L.  &  W.  R.  Co.  (U.  S.  C.  C),  68  Fed.  1  (objection  that 
action  brought  in  wrong  district  waived  by  general  appearance  and  demand 
for  service  of  papers);  Garner  v.  Second  National  Bk.  (U.  S.  C.  C),  66  Fed. 
369  (appearance  in  State  Court  for  removal  proceedings  to  Federal  Court 
not  a  general  appearance  so  as  to  preclude  objection  to  jurisdiction);  Balti- 
more &  Ohio  Rd.  Co.  V.  Ford  (U.  S.  C.  C),  35  Fed.  170  (when  appearance 
in  State  Court  to  make  motions,  after  filing  petition  and  bond  for  removal 
to  United  States  Circuit  Court  does  not  give  State  Court  jurisdiction). 

Arkansas:  Arkansas  Coal,  G.  F.  C.  &  Mfg.  Co.  v.  Haley,  62  Ark.  144,  34 
S.  W.  545  (prosecution  by  corporation  of  appeal  from  order  denying  motion 
to  quash  service  of  summons  gives  jurisdiction). 

Illinois:  Elting  v.  First  National  Bk.,  173  111.  368,  50  N.  E  1095,  aff'g  68 
111.  App.  204  (no  jurisdiction  given;  entry  of  appearance  by  attorney). 

Kansas:  Salina  National  Bk.  v.  Prescott,  60  Kan.  400,  57  Pac.  121,  15 
Am.  &  Eng.  Corp.  Cas.  (N.  S.)  696,  rev'g  53  Pac.  769  (when  papers  in  cause 
constitute  voluntary  appearance). 

North  Dakota:  William  Decring  &  Co.  v.  Venne,  7  N.  Dak.  576,  75  N.  W. 
926  (when  appearance  I^y  counsel  constitutes  a  voluntary  appearance  and 
a  waiver  of  defects  in  the  summons  or  its  service). 

South  Carolina:  Chafee  v.  Postal  Teleg.  Cable  Co.,  35  S.  C.  372,  14  S.  E. 
764  (jurisdiction  of  person  of  foreign  corporation  given  by  general  appear- 
ance) . 

22  Under  §  8,  of  act  of  March  3,  1875,  18  Stat.  470. 

23  Citizens'  Savings  &  Trust  Co.  v.  Illinois  Central  Rd.  Co.,  205  U.  S.  46, 
51  L.  ed.  703,  27  Sup.  Ct.  425. 

3')'-) 


§§  202,  203  JURISDICTION   OF  COURTS 

§202.  Waiver  of  Jurisdictional  Defect  as  to  Particular 
District. 

Where  at  the  time  of  removal  to  the  Federal  Court  neither 
of  the  parties  was  a  resident  nor  citizen  of  the  district,  that 
defect  although  being  jurisdictional,  being  only  as  to  the 
particular  district,  can  be  waived;  and  is  waived  if  the  parties 
make  up  the  issues  on  the  merits  without  objecting  to  the 
jurisdiction.^^ 

§  203.  Subsequent  Change  in  Conditions  After  Jurisdic- 
tion of  Circuit  Court  Has  Attached. 

The  general  rule  is  that  when  the  jurisdiction  of  a  Circuit 
Court  of  the  United  States  has  once  attached  it  will  not  be 
ousted  by  subsequent  change  in  the  conditions.^^ 

24  Kreigh  v.  Westinghouse,  Church,  Kerr  &  Co.,  214  U.  S.  249,  53  L.  ed. 
984,  29  Sup.  Ct.  619,  rev'g  152  Fed.  120,  "This  case  is  here  upon  a  writ  of 
certiorari  to  the  United  States  Circuit  Court  of  Appeals  for  the  Eighth  Cir- 
cuit. The  action  was  originally  brought  to  recover  for  injuries  received  by. 
Eugene  C.  Kreigh,  petitioner,  hereinafter  called  the  plaintiff,  while  engaged 
in  the  employ  of  the  respondent,  Westinghouse,  Church,  Kerr  &  Company, 
hereinafter  called  the  defendant,  superintending  the  construction  of  the 
brickwork  in  the  erection  of  a  brick  and  steel  building  for  which  the  de- 
fendant was  the  contractor. 

"  The  case  was  originally  commenced  in  the  District  Court  of  Wyandotte 
County,  Kansas.  On  the  application  of  the  defendant  it  was  removed  to 
the  United  States  Circuit  Court  for  the  District  of  Kansas.  In  the  petition 
for  the  allowance  of  the  writ  of  certiorari  a  question  was  made  as  to  the 
jurisdiction  of  the  Federal  Court,  as  it  appears  that  at  the  time  of  the  re- 
moval neither  party  was  a  resident  nor  citizen  of  the  Federal  district  to 
which  the  case  was  removed,  and  neither  of  them  a  resident  nor  citizen  of 
the  State  of  Kansas.  But  it  appears  that  no  motion  was  made  to  remand 
for  want  of  jurisdiction  in  the  Federal  Court,  and  no  question  as  to  the  juris- 
diction was  made  until  the  case  came  here.  In  that  state  of  the  record  the 
defect  as  to  the  jurisdiction  being  simply  as  to  the  district  to  which  the  suit 
was  removed,  the  parties  being  citizens  of  different  States,  the  objection  as 
to  the  jurisdiction  might  be,  and,  in  our  opinion,  was  waived  by  making  up 
the  issues  on  the  merits  without  objection  as  to  the  jurisdiction  of  the  court. 
It  is  unnecessary  to  enlarge  upon  this  feature  of  the  case,  as  it  is  controlled 
by  the  recent  cases  of  In  re  Moore,  209  U.  S.  490,  52  L.  ed.  904,  28  Sup.  Ct. 
■ — ;  Western  Loan  &  Savings  Co.  v.  Butte  Mining  Co.,  210  U.  S.  368,  28  Sup. 
Ct.  706,  52  L.  ed.  1101,"  per  Mr.  Justice  Day. 

25  Kirby  v.  American  Soda  Fountain  Co.,  194  U.  S.  141,  48  L.  ed.  911, 
24  Sup.  Ct.  619.    See  Lebenskeger  v.  Schofield,  139  Fed.  384. 

334 


OVER  CORPORATIONS   CONTINUED  §  204 

§  204.  Where  Case  Goes  More  Than  Once  to  Highest 
State  Court— Final  Judgment— Writ  of  Error. 

If  a  case  goes  more  than  once  to  the  highest  court  of  a  State, 
the  last  judgment  is  the  final  one.  Thus  where  the  highest 
court  of  a  State  reverses  an  order  of  an  inferior  State  Court 
removing  a  cause  and  remands  the  case  to  the  State  Court  for 
trial,  and  after  trial  and  verdict  for  plaintiff,  the  judgment  is 
sustained  by  the  highest  court,  the  last  judgment  is  the  only 
final  one  to  which  the  writ  of  error  will  run  from  the  United 
States  Supreme  Court;  the  defendant  cannot  prosecute  a  writ 
of  error  to  the  judgment  remanding  the  cause.^^ 

28  Chesapeake  &  Ohio  Ry.  Co.  v.  McCabe,  213  U.  S.  207,  53  L.  ed.  765, 
29  Sup.  Ct.  430  (Mr.  Justice  McKenna,  dissenting),  citing  Schlosser  v. 
Hemphill,  198  U.  S.  173,  49  L.  ed.  1000,  25  Sup.  Ct.  654.  In  the  principal 
case  an  action  was  brought  by  the  defendant  in  error  in  a  County  Circuit 
Court  of  Kentucky  against  the  Chesapeake  &  Ohio  Ry.  Co.,  a  Virginia  cor- 
poration, and  the  Maysville  &  Big  Sandy  Rd.  Co.  of  Kentucky  to  recover 
damages  for  death  caused  by  neghgence,  as  alleged,  of  the  Chesapeake  & 
Ohio  Ry.  Co.,  in  operating  one  of  its  trains  over  a  railroad  track,  which  had 
been  leased  to  it  by  the  other  company.  Thereafter  the  Chesapeake  &  Ohio 
Ry.  Co.  filed  a  petition  for  removal  to  the  United  States  Circuit  Court  for 
the  Eastern  District  of  Kentucky.  The  petition  was  granted  and  the  record 
was  directed  to  be  made  up  for  transmission  to  said  Federal  Circuit  Court. 
The  plaintiff  in  the  case  excepted  to  the  order  and  subsequently  made  a 
motion  to  set  it  aside,  which  was  denied.  An  appeal  from  the  order  to  the 
Court  of  Appeals  was  immediately  granted  and  that  court  reversed  the 
order  and  remanded  the  case  for  trial,  112  Ky.  186.  The  trial  was  had  and 
the  jury  instructed  by  the  court  to  find  in  favor  of  the  defendant.  This 
judgment  was  reversed  by  the  Court  of  Appeals.  28  Ky.  Law  Rep.  536. 
Another  trial  was  had  resulting  in  a  verdict  for  plaintiff  in  the  sum  of  .$2,500. 
The  judgment  was  sustained  by  the  Court  of  Appeals,  30  Ky.  Law  Rep. 
1009.  To  this  judgment  the  writ  of  error  in  this  case  was  taken.  Instead 
of  taking  the  case  to  the  Federal  Supreme  Court  the  plaintiff  proceeded  in 
the  State  Court,  and  that  court  denied  effect  to  the  Federal  judgment. 

Writs  of  error  to  State  Courts  under  §  709  of  Revised  Statutes  of  United  States 
as  amended: 

"A  final  judgment  or  decree  in  any  suit  in  the  highest  court  of  a  State 
in  which  a  decision  in  the  suit  could  be  had,  where  is  drawn  in  question  the 
validity  of  a  treaty  or  statute  of,  or  an  authority  exercised  under  any  State, 
on  the  ground  of  their  being  repugnant  to  the  Constitution,  treaties  or  laws 
of  the  United  States,  and  the  decision  is  in  favor  of  their  validity;  or  where 
any  title,  right,  privilege  or  immunity  is  claimed  under  the  Constitution,  or 
any  treaty  or  statute  of,  or  commission  held  or  authority  exercised  under, 
the  United  States,  and  the  decision  is  against  the  title,  right,  privilege  or 

335 


§  205  JURISDICTION   OF   COURTS 

A -citizen  of  Alabama  brought  suit  in  an  Alabama  State 
Court  against  a  citizen  of  Maryland  and  a  citizen  of  Alabama, 
whereupon  the  Circuit  Court  for  the  Northern  District  of 
Alabama  ordered  the  removal  of  the  case  on  the  petition  of  the 
citizen  of  Maryland  alleging  prejudice  or  local  influence.  A 
motion  to  remand  was  denied,  and  the  case  went  to  trial  and 
judgment.  That  judgment  was  affirmed  by  the  Circuit  Court  of 
Appeals  and  a  writ  of  error  from  the  Supreme  Court  was  there- 
upon prosecuted.  It  was  held  that  as  the  jurisdiction  of  the  Cir- 
cuit Court  as  exercised  was  dependent  entirely  on  diversity  of 
citizenship,  the  judgment  of  the  Circuit  Court  of  Appeals  was 
final  and  the  writ  of  error  could  not  be  maintained.^^ 

§  205.  Jurisdiction  of  Federal  Circuit  Courts  Under  Ju- 
diciary Act  of  1888 — Removal  of  Suits. 

The  Judiciary  Act  as  amended  in  1888  provides:  "  §  2.  That 
any  suit  of  a  civil  nature,  at  law  or  in  equity,  arising  under  the 
Constitution  or  laws  of  the  United  States,  or  treaties  made, 
or  which  shall  be  made,  under  their  authority,  of  which  the 
Circuit  Courts  of  the  United  States  are  given  original  jurisdic- 
tion by  the  preceding  section,'*  which  may  now  be  pending,  or 
which  may  hereafter  be  brought,  in  any  State  Court,  may  be 
removed  by  the  defendant  or  defendants  therein  to  the  Circuit 

immunity  specially  set  up  or  claimed  by  either  party,  under  such  Constitu- 
tion, treaty,  statute,  commission,  or  authority,  may  be  re-examined  and 
reversed  or  affirmed  in  the  Supreme  Court  upon  a  writ  of  error.  The  writ 
shall  have  the  same  effect  as  if  the  judgment  or  decree  complained  of  had 
been  rendered  or  passed  in  a  court  of  the  United  States. 

"  The  Supreme  Court  may  reverse,  modify,  or  affirm  the  judgment  or  de- 
cree of  such  State  Court,  and  may,  at  their  discretion,  award  execution,  or 
remand  the  same  to  the  court  from  which  it  was  removed  by  the  writ." 
U.  S.  Rev.  Stat.,  §  709,  as  amended  by  act  of  February  18,  1875,  chap.  SO, 
18  Stat.  318,  U.  S.  Comp.  Stat.,  1901,  p.  575.  See  also  U.  S.  Rev.  Stat., 
§  1003,  U.  S.  Comp.  Stat.,  1901,  p.  713,  as  to  manner  of  issue  of  writs  of  error 
to  State  Courts.  Examine  as  to  appellate  jurisdiction  of  Supreme  Court, 
CJ.  S.  Comp.  Stat.  Supplement,  1907,  p.  213.  See  extended  note  to  said 
§  709,  in  4  Fed.  Stat.  Ann.,  pp.  468  et  seq. 

27  Cochran  &  The  Fidelity  &  Deposit  Co.  v.  Montgomery  County,  199  U.  S. 
260,  26  Sup.  Ct.  58,  50  L.  ed.  178,  182. 

28  See  §  161,  herein. 

336 


OVER   CORPORATIONS    CONTINUED  §  205 

Court  of  the  United  States  for  the  proper  district.  Any  other 
suit  of  a  civil  nature,  at  law  or  in  equity,  of  which  the  Circuit 
Courts  of  the  United  States  are  given  jurisdiction  by  the 
preceding  section,  and  which  are  now  pending,  or  which  may 
hereafter  be  brought,  in  any  State  Court,  may  be  removed 
into  the  Circuit  Court  of  the  United  States  for  the  proper 
district  by  the  defendant  or  defendants  therein  being  non- 
residents of  that  State;  and  when  in  any  suit  mentioned  in 
this  section  there  shall  be  a  controversy  which  is  wholly  be- 
tween citizens  of  different  States,  and  which  can  be  fully 
determined  as  between  them,  then  either  one  or  more  of  the 
defendants  actually  interested  in  such  controversy  may  re- 
move said  suit  into  the  Circuit  Court  of  the  United  States  for 
the  proper  district.  And  where  a  suit  is  now  pending,  or  may 
be  hereafter  brought,  in  any  State  Court,  in  which  there  is  a 
controversy  between  a  citizen  of  the  State  in  which  the  suit 
is  brought  and  a  citizen  of  another  State,  any  defendant, 
being  such  citizen  of  another  State,  may  remove  such  suit  into 
the  Circuit  Court  of  the  United  States  for  the  proper  district, 
any  time  before  the  trial  thereof,  when  it  shall  be  made  to 
appear  to  said  Circuit  Court  that  from  prejudice  or  local  in- 
fluence he  will  not  be  able  to  obtain  justice  in  such  State  Court, 
or  in  any  other  State  Court  to  which  the  said  defendant  may, 
under  the  laws  of  the  State,  have  the  right,  on  account  of  such 
prejudice  or  local  influence,  to  remove  said  cause:  Provided, 
That  if  it  further  appear  that  said  suit  can  be  fully  and  justly 
determined  as  to  the  other  defendants  in  the  State  Court, 
without  being  affected  by  such  prejudice  or  local  influence, 
and  that  no  party  to  the  suit  will  be  prejudiced  by  a  separation 
of  the  parties,  said  Circuit  Court  may  direct  the  suit  to  be 
remanded,  so  far  as  relates  to  such  other  defendants,  to  the 
State  Court,  to  be  proceeded  with  therein. 

"At  any  time  before  the  trial  of  any  suit  which  is  now  pend- 
ing in  any  Circuit  Court  or  may  hereafter  be  entered  therein, 
and  which  has  been  removed  to  said  court  from  a  State  Court 
on  the  affidavit  of  any  party  plaintiff  that  he  had  reason  to 
beheve  and  did  believe  that,  from  prejudice  or  local  influence, 
22  337 


§  205  JURISDICTION   OF   COURTS 

he  was  unable  to  obtain  justice  in  said  State  Court,  the  Circuit 
Court  shall,  on  apphcation  of  the  other  party,  examine  into  the 
truth  of  said  affidavit  and  the  grounds  thereof,  and,  unless  it 
shall  appear  to  the  satisfaction  of  said  court  that  said  party 
will  not  be  able  to  obtain  justice  in  such  State  Court,  it  shall 
cause  the  same  to  be  remanded  thereto. 

"Whenever  any  cause  shall  be  removed  from  any  State 
Court  into  any  Circuit  Court  of  the  United  States,  and  the 
Circuit  Court  shall  decide  that  the  cause  was  improperly  re- 
moved, and  order  the  same  to  be  remanded  to  the  State  Court 
from  whence  it  came,  such  remand  shall  be  immediately 
carried  into  execution,  and  no  appeal  or  writ  of  error  from  the 
decision  of  the  Circuit  Court  so  remanding  such  cause  shall 
be  allowed.  ^^ 

"  §  3.  That  whenever  any  party  entitled  to  remove  any 
suit  mentioned  in  the  next  preceding  section,  except  in  such 
cases  as  are  provided  for  in  the  last  clause  of  said  section,  may 
desire  to  remove  such  suit  from  a  State  Court  to  the  Circuit 
Court  of  the  United  States,  he  may  make  and  file  a  petition  in 
such  suit  in  such  State  Court  at  the  time,  or  any  time  before 
the  defendant  is  required  by  the  laws  of  the  State  or  the  rule 
of  the  State  Court  in  which  such  suit  is  brought  to  answer  or 
plead  to  the  declaration  or  complaint  of  the  plaintiff,  for  the 
removal  of  such  suit  into  the  Circuit  Court  to  be  held  in  the 
district  where  such  suit  is  pending,  and  shall  make  and  file 
therewith  a  bond,  with  good  and  sufficient  surety,  for  his  or 
their  entering  in  such  Circuit  Court,  on  the  first  day  of  its  then 
next  session,  a  copy  of  the  record  in  such  suit,  and  for  paying 
all  costs  that  may  be  awarded  by  the  said  Circuit  Court  if  said 
court  shall  hold  that  such  suit  was  wrongfully  or  improperly 
removed  thereto,  and  also  for  their  appearing  and  entering 
special  bail  in  such  suit  if  special  bail  was  originally  requisite 
therein.    It  shall  then  be  the  duty  of  the  State  Court  to  accept 

28  Act  of  August  13,  1888,  chap.  866,  §  2,  25  Stat,  at  L.  434,  435,  U.  S. 
Comp.  Stat.,  1908,  p.  509,  amending  act  of  March  3,  1887,  chap.  373,  §  2, 
24  Stat,  at  L.  552,  amending  act  of  March  3,  1875,  chap.  137,  §  2,  18  Stat. 
at  L.  470. 

338 


OVER   CORPORATIONS   CONTINUED  §  205 

such  petition  and  bond,  and  proceed  no  further  in  such  suit; 
and  the  said  copy  being  entered  as  aforesaid  in  said  Circuit 
Court  of  the  United  States,  the  cause  shall  then  proceed  in  the 
same  manner  as  if  it  had  been  originally  commenced  in  the 
said  Circuit  Court;  and  if  in  any  action  commenced  in  a  State 
Court  the  title  of  land  be  concerned,  and  the  parties  are  citizens 
of  the  same  State;  and  the  matter  in  dispute  exceed  the  sum 
or  value  of  two  thousand  dollars,  exclusive  of  interest  and 
costs,  the  sum  or  value  being  made  to  appear,  one  or  more  of 
the  plaintiffs  or  defendants,  before  the  trial,  may  state  to  the 
court,  and  make  affidavit  if  the  court  require  it,  that  he  or 
they  claim  and  shall  rely  upon  a  right  or  title  to  the  land  under 
a  grant  from  a  State,  and  produce  the  original  grant,  or  an 
exemplification  of  it,  except  where  the  loss  of  public  records 
shall  put  it  out  of  his  or  their  power,  and  shall  move  that  any 
one  or  more  of  the  adverse  party  inform  the  court  whether  he 
or  they  claim  a  right  or  title  to  the  land  under  a  grant  from 
some  other  State,  the  party  or  parties  so  required  shall  give 
such  information,  or  otherwise  not  be  allowed  to  plead  such 
grant  or  give  it  in  evidence  upon  the  trial;  and  if  he  or  they 
inform  that  he  or  they  do  claim  under  such  grant,  any  one  or 
more  of  the  party  moving  for  such  information  may  then,  on 
petition  and  bond,  as  hereinbefore  mentioned  in  this  act,  re- 
move the  cause  for  trial  to  the  Circuit  Court  of  the  United 
States  next  to  be  holden  in  such  district;  and  any  one  of  either 
party  removing  the  cause  shall  not  be  allowed  to  plead  or  give 
evidence  of  any  other  title  than  that  by  him  or  them  stated 
as  aforesaid  as  the  ground  of  his  or  their  claim."  ^" 

30  Act  of  August  13,  1888,  chap.  866,  §  3,  25  Stat,  at  L.  435,  436,  U.  S. 
Comp.  Stat.,  1901,  p.  510,  amending  act  of  March  3,  1887,  chap.  373,  §  3, 
24  Stat,  at  L.  552,  which  amends  act  of  March  3,  1875,  18  Stat,  at  L.  470. 

Rev.  Stat.  U.  S.,  §  640,  providing  for  removal  of  suits  commenced  in  any 
other  than  a  Circuit  or  District  Court  of  the  United  States  against  corpo- 
rations other  than  a  banking  corporation  organized  under  a  law  of  the 
United  States  upon  petition  of  the  defendant  stating  that  it  had  a  defense 
arising  under  or  by  virtue  of  the  Constitution  or  of  any  treaty  or  law  of  the 
United  States  was  repealed  by  act  of  March  3,  1887,  chap.  373,  §  6,  and  by 
act  of  August  13,  1888,  chap.  866,  §  6.  For  construction  of  repealed  statute 
see  Tennessee  v.  Union  &  Planters'  Bank,  152  U.  S  454,  463,  38  L.  ed.  511, 

339 


§  20()  JURISDICTION   OF   COURTS 

§  206.  Removal  of  Suits— What  Record  Must  Show. 

A  case  cannot  be  removed  from  a  State  Court,  as  one  arising 
under  the  Constitution  or  laws  of  the  United  States,  unless  the 
plaintiff's  complaint,  bill  or  declaration  shows  it  to  be  a  case 
of  that  character .^^ 

A  suit  only  arises  under  the  Constitution  and  laws  of  the 
United  States  within  the  meaning  of  the  Judiciary  Act  ^^  con- 
ferring jurisdiction  on  the  Circuit  Court  when  the  plaintiff's 
statement  of  his  own  cause  of  action  shows  that  it  is  based  on 
those  laws  or  that  Constitution,  and  it  is  not  enough  that  de- 
fendant may  base  his  defense  thereon.^^  And  as  a  case  cannot 
be  removed  on  the  ground  that  it  is  one  arising  under  the 

14  Sup.  Ct.  654;  Texas  &  Pacific  Ry.  Co.  v.  Kirk,  115  U.  S.  1,  29  L.  ed.  319, 
5  Sup.  Ct.  1113;  Ames  v.  Kansas,  111  U.  S.  449,  459,  28  L.  ed.  4S2,  4  Sup. 
Ct.  437;  Jones  v.  Oceanic  Steam  Navigation  Co.,  11  Blatchf.  (U.  S.  C.  C.) 
406,  407;  Manufacturers'  Nat.  Bk.  of  Chicago  v.  Baack,  S  Blatchf.  (U.  S. 
C.  C.)  137. 

31  Minnesota  v.  Northern  Securities  Co.,  194  U.  S.  48,  48  L.  ed.  870,  24 
Sup.  Ct.  598. 

32  Section  1  of  the  act  of  August  13,  1888,  chap.  866,  25  Stat.  433. 

33  Winn,  In  re,  213  U.  S.  458,  53  L.  ed.  873,  29  Sup.  Ct.  515;  Louisville  & 
Nashville  Rd.  v.  Mottley,  211  U.  S.  149,  53  L.  ed.  126,  29  Sup.  Ct.  42. 
The  court,  per  Mr.  Justice  Moody  (at  pp.  464,  465),  said:  "The  only  ground 
of  jurisdiction  which  is  or  can  be  suggested  is  that  the  suit  was  one  arising 
under  the  Constitution  and  the  laws  of  the  United  States,  25  Stat.  433,  434. 
It  is  the  settled  interpretation  of  these  words,  as  used  in  this  statute  confer- 
ring jurisdiction,  that  a  suit  arises  under  the  Constitution  and  laws  of  the 
United  States  only  when  the  plaintiff's  statement  of  his  own  cause  of  action 
shows  that  it  is  based  upon  those  laws  or  that  Constitution.  It  is  not  enough, 
as  the  law  now  exists,  that  it  appears  that  the  defendant  may  find  in  the 
Constitution  or  laws  of  the  United  States  some  ground  of  defense.  Louis- 
ville &  Nashville  Railroad  v.  Mottley,  211  U.  S.  149,  53  L.  ed.  126,  29  Sup. 
Ct.  42,  and  cases  cited.  If  the  defendant  has  any  such  defense  to  the  plain- 
tiff's claim  it  may  be  set  up  in  the  State  Courts,  and  if  properly  set  up  and 
denied  by  the  highest  court  of  the  State  may  ultimately  be  brought  to  this 
court  for  decision. 

"Tested  by  these  principles,  the  record,  including  the  petition  for  removal, 
shows  affirmatively  that  the  case  was  not  one  arising  under  the  laws  of  the 
United  States.  In  substance,  the  allegations  of  the  petition  for  removal  are, 
that  the  defendant  was  subject  to  the  Federal  laws  to  regulate  commerce, 
and  that  under  those  laws  the  defendant  had  a  defense  in  whole  or  in  part 
to  the  cause  of  action  stated  in  the  declaration.  But  the  cause  of  action 
itself  is  not  based  upon  the  interstate  commerce  law  or  upon  any  other  law 
of  the  United  States." 

340 


OVER   CORPORATIONS   CONTINUED  §  20fi 

Constitution,  laws  or  treaties  of  tiie  United  States  unless  that 
appears  by  plaintiff's  statement  of  his  own  claim,  if  it  does 
not  so  appear,  the  want  of  it  cannot  be  supplied  by  any  state- 
ment of  the  petition  for  removal  or  in  the  subsequent  plead- 
ings, or  by  taking  judicial  notice  of  facts  not  relied  on  and 
regularly  brought  into  controversy.^^ 

Although  a  defendant  of  the  State  Court  may  set  up  a  de- 
fense based  upon  Federal  rights  which  will,  if  denied,  entitle 
him  ultimately  to  have  the  decision  reviewed  by  the  Supreme 
Court,  if  the  Federal  question  does  not  appear  in  the  plaintiff's 
statement  the  case  is  not  removable  to  the  Circuit  Court  of 
the  United  States.^^  Again,  the  jurisdiction  of  the  Circuit 
Court  must  appear  affirmatively  from  distinct  allegations,  or 
facts  clearly  proven,  and  is  not  to  be  established  argumenta- 
tively  or  by  mere  inference,  and  where  jurisdiction  depends 
upon  diverse  citizenship,  absence  of  sufficient  averments  or  of 
facts  in  the  record  showing  such  diversity  is  fatal  and  the 
defect  cannot  be  waived  by  the  parties.^^  If  the  plaintiffs  are 
citizens  of  the  State  in  which  the  action  is  brought  and  the 
defendant  railway  company  is  a  citizen  of  another  State,  diverse 
citizenship  is  shown  on  the  face  of  the  record,  authorizing  on 
proper  proceedings  taken  to  bring  it  about,  the  removal  of  the 
action  from  the  State  Court  to  the  Federal  Court.^' 

The  right  of  a  defendant  jointly  sued  with  others  to  remove 
the  case  into  the  Federal  Court  also  depends  upon  the  case 
made  in  the  complaint  against  the  defendants  jointly,  and 
that  right,  in  the  absence  of  showing  a  fraudulent  joinder, 
does  not  arise  from  the  failure  of  complainant  to  establish  a 
joint  cause  of  action.^* 


34  Arkansas  v.  Kansas  &  T.  Coal  Co.  &  S.  F.  Ry.  Co.,  183  U.  S.  185,  46 
L.  ed.  144,  22  Sup.  Ct.  47. 

35  Winn,  In  re,  213  U.  S.  458,  53  L.  ed.  873,  29  Sup.  Ct.  515. 

36  Thomas  v.  Board  of  Trustees  of  the  Ohio  State  University,  195  U.  S. 
207,  25  Sup.  Ct.  24,  49  L.  ed.  160. 

37  Missouri,  Kansas  &  T.  Ry.  Co.  v.  Missouri  R.  &  W.  Coram'rs,  183  U.  S. 
53,  46  L.  ed.  78,  22  Sup.  Ct.  18. 

38  Alabama  Great  Southern  Ry.  Co.  v.  Thompson,  200  U.  S.  206,  50  L. 
ed.  441,  26  Sup.  Ct.  161. 

341 


§  207  JURISDICTION   OF   COURTS 

The  Federal  character  of  a  suit  must  appear  in  the  plaintiff's 
own  statement  of  his  claim,  and  where  a  defense  has  been 
interposed,  the  reply  to  which  brings  out  matters  of  a  Federal 
nature,  those  matters  thus  brought  out  by  the  plaintiff  do  not 
form  a  part  of  his  cause  of  action.^^ 

In  an  action  of  tort,  the  cause  of  action  is  whatever  the 
plaintiff  declares  it  to  be  in  his  pleading,  and  matters  of  de- 
fense cannot  be  availed  of  as  ground  of  removal."*"  If  the 
record  does  not  affirmatively  show  jurisdiction  in  the  Circuit 
Court,  the  Federal  Supreme  Court  must,  upon  its  own  motion, 
so  declare,  and  make  such  order  as  will  prevent  the  Circuit 
Court  from  exercising  an  authority  not  conferred  upon  it  by 
statute.**^ 

§  207.  No  Cause  Removable  Unless  It  Is  One  of  Which 
Circuit  Courts  Given  Original  Jurisdiction. 

The  test  of  the  right  to  remove  a  case  from  a  State  Court 
into  the  Circuit  Court  of  the  United  States  under  §  2  of  the  act 
of  March  3,  1887,  as  corrected  by  the  act  of  August  13,  1888, 
is  that  it  must  be  a  case  over  which  the  Circuit  Court  might 
have  exercised  original  jurisdiction  under  §  1  of  that  act.^ 
And  the  rule  is  that  no  cause  can  be  removed  from  the  State 
Court  to  the  Circuit  Court  of  the  United  States  unless  it  could 
have  originally  been  brought  in  the  latter  court.^    And  if  the 

39  Houston  &  T.  C.  C.  R.  Co.  v.  Texas,  177  U.  S.  66,  44  L.  ed.  673,  20  Sup. 
Ct.  545. 

40  Chesapeake  &  Ohio  Ry.  Co.  v.  Dixon,  179  U.  S.  131,  5  L.  ed.  121,  21 
Sup.  Ct.  67. 

41  Minnesota  v.  Northern  Securities  Co.,  194  U.  S.  48,  24  Sup.  Ct.  598,  48 
L.  ed.  870. 

42  Arkansas  v.  Kansas  &  T.  Coal  Co.  &  S.  F.  Ry.  Co.,  183  U.  S.  185,  46  L. 
ed.  144,  22  Sup.  Ct.  47. 

43  Winn,  In  re,  213  U.  S.  458,  53  L.  ed.  873,  29  Sup.  Ct.  515;  Dunn,  Matter 
of,  212  U.  S.  374,  53  L.  ed.  558,  29  Sup.  Ct.  299;  Wisner,  Ex  parte,  203 
U.  S.  449,  51  L.  ed.  264,  27  Sup.  Ct.  150;  Madisonville  Traction  Co.  v.  Saint 
Bernard  Min.  Co.,  196  U.  S.  239,  25  Sup.  Ct.  251,  49  L.  ed.  262;  Boston  Min- 
ing Co.  V.  Montana  Ore  Co.,  188  U.  S.  632,  47  L.  ed.  626,  23  Sup.  Ct.  434. 
In  the  principal  case  the  court,  per  Mr.  Justice  Moody  (at  p.  463),  said: 
"  The  petition  for  removal  alleged  that  the  plaintiff  was  a  citizen  of  Missouri 
and  the  defendant  'a  joint  stock  association  organized  under  the  laws  of 

342 


OVER   CORPORATIONS   CONTINUED  §  207 

suit  as  disclosed  by  the  complaint  could  not  have  been  brought 
originally  in  the  Circuit  Court  then  under  the  acts  of  1887  and 
1888,  it  should  not  be  removed  from  the  State  Court  and  if 
removed  it  should  be  remanded.'*^  Again,  those  suits  only  can 
be  removed  of  which  the  Circuit  Courts  are  given  original  ju- 
risdiction, and  the  right  of  removal  because  of  diversity  of 
citizenship  can  only  be  exercised  by  a  defendant  who  is  a  cit- 
izen, or  by  defendants  who  are  citizens,  of  a  State  other  than 
that  in  which  the  suit  is  pending.^  A  proceeding  brought  by 
a  Kentucky  railroad  company  in  the  County  Court,  under  the 
statutes  of  that  State,'*^  to  condemn  lands  for  a  public  use, 
valued  at  over  two  thousand  dollars,  belonging  to  a  corpo- 
ration which  is  a  citizen  of  another  State,  is  a  suit  involving  a 
controversy  to  which  the  judicial  power  of  the  United  States 
extends  within  the  meaning  of  the  judiciary  clauses  of  the 
Constitution,  and  of  which  the  Circuit  Court  has  original  cog- 
nizance under  the  Judiciary  Act  of  1887;''^  and  may  be  re- 
moved to  the  Circuit  Court  of  the  United  States.^*  But  where 
a  suit  is  brought  in  plaintiff's  State  against  a  citizen  of  the 
same  State  and  a  citizen  of  another  State  it  could  not  have 

the  state  of  New  York,'  but  contained  no  allegation  of  the  citizenship  of 
the  members  of  the  association.  It  wate  agreed  at  the  argument  that  the 
defendant  was  not  a  corporation  but  a  joint  stock  association.  Therefore 
the  diversity  of  citizenship  required  to  warrant  a  removal  on  that  ground 
does  not  appear.  The  petition  for  removal"  (printed  in  the  margin  of 
Vol.  213  U.  S.  463  et  seq.)  "was  not  based  upon  diversity  of  citizenship  but 
upon  the  ground  that  the  suit  was  one  arising  under  the  laws  of  the  United 
States.  It  is  well  settled  that  no  cause  can  be  removed  from  the  State  Court 
to  the  Circuit  Court  of  the  United  States  unless  it  could  originally  have  been 
brought  in  the  latter  court.  *  *  *  The  case  could  not  have  been 
brought  originally  in  the  Circuit  Court  of  the  United  States  and  was  there- 
fore not  removable  thereto.  In  holding  otherwise  we  think  the  learned 
Judge  of  the  Circuit  Court  erred." 

«  Minnesota  v.  Northern  Securities  Co.,  194  U.  S.  48,  24  Sup.  Ct.  598,  48 
L.  ed.  870.    For  statute  see  §§161,  204,  205  herein. 

^5  Cochran  &  The  Fidelity  &  Deposit  Co.  v.  Montgomery  County,  199 
U.  S.  260,  26  Sup.  Ct.  58,  50  L.  ed.  178,  182. 

49  Ky.  Stat.,  §§835-839. 

«.See  §§161,  204,  205,  herein. 

48  Madisonville  Traction  Co.  v.  Saint  Bernard  Min.  Co.,  196  U.  S.  239, 
25  Sup.  Ct.  251,  49  L.  ed.  262. 

343 


§  208  JURISDICTION    OF   COURTS 

been  brought  originally  in  the  Circuit  Court  and  removal  will 
not  be  properly  granted.'*^ 

§  208.  Federal  Question  or  Right— When  Court  Has 
Jurisdiction — Instances. 

When  a  statute  of,  or  authority  exercised  under,  a  State  is 
drawn  in  question,  on  the  ground  of  its  repugnancy  to  the 
Constitution  of  the  United  States,  or  a  right  is  claimed  under 
that  instrument,  the  decision  of  the  State  Court  in  favor  of  the 
validity  of  such  statute  or  authority,  or  adverse  to  the  right 
so  claimed,  can  be  reviewed  in  the  Federal  Supreme  Court.^" 
The  Federal  Supreme  Court  has  jurisdiction  to  review  a  judg- 
ment on  a  writ  of  error  ^^  if  the  opinion  of  the  highest  court  of 
the  State  clearly  shows  that  the  Federal  question  was  assumed 
to  be  in  issue,  was  decided  adversely,  and  the  decision  was 
essential  to  the  judgment  rendered.^^  Again,  the  Federal  Su- 
preme Court  cannot  decline  jurisdiction  when  it  is  plain  that 
the  fair  result  of  a  decision  of  the  State  Court  is  to  deny  a  con- 
stitutional right .^^  Where  the  opinion  of  the  State  Court 
shows  that  it  considered  and  denied  the  validity  of  a  statute 
of  another  State,  and  its  binding  force  to  control  the  right  of 
action  asserted,  a  Federal  right  specially  set  up  is  denied,  and 
the  Supreme  Court  has  jurisdiction  to  review  the  judgment 
under  §  709  of  the  Revised  Statutes  of  the  United  States.^'* 

<9  Cochran  &  The  Fidehty  &  Deposit  Co.  v.  Montgomery  County,  199 
U.  S.  260,  26  Sup.  Ct.  58,  50  L.  ed.  178,  182. 
50  Home  Ins.  Co.  v.  Augusta,  93  U.  S.  116. 

61  Under  §  709,  U.  S.  Rev.  Stat.,  given  in  note  to  §  204,  herein. 

62  Chambers  v.  Baltimore  &  Ohio  Rd.  Co.,  207  U.  S.  142,  28  Sup.  Ct.  34, 
52  L.  ed.  143,  aff 'g  73  Ohio  St.  1 ;  original  action  was  under  State  statute  for 
damages  for  death  caused  by  negligence  of  railroad  corporation. 

53  Smithsonian  Institution  v.  St.  John,  214  U.  S.  19,  53  L.  ed.  892,  29 
Sup.  Ct.  601 ;  Rogers  v.  Alabama,  192  U.  S.  226,  48  L.  ed.  417,  24  Sup.  Ct. 
257. 

54  Atchison,  Topeka  &  Santa  Fe  Ry.  Co.  v.  Sowers,  213  U.  S.  55,  53  L.  ed. 
695,  29  Sup.  Ct.  697,  aff'g  99  S.  W.  190,  a  case  of  writ  of  error  to  Court  of 
Civil  Appeals  of  Texas.  Action  was  to  recover  for  personal  injuries  sus- 
tained by  defendant  in  error  while  employed  as  brakeman  in  the  service  of 
plaintiff. 

For  §  709,  Rev.  Stat.,  see  note  under  §  204,  herein. 

344 


OVER  CORPORATIONS   CONTINUED  §  208 

Where  the  effect  of  the  judgment  of  the  State  Court  is  to  deny 
the  defense  that  a  statute  of  a  Territory  is  a  bar  to  the  action 
a  claim  of  Federal  right  is  denied  and  the  Supreme  Court  has 
jurisdiction  under  §  709  of  the  Revised  Statutes.^^  Where  in 
the  State  Court  defendant  distinctly  claimed  that  a  recovery 
would  be  prevented  if  full  faith  and  credit  were  given  to  a 
judgment  of  the  courts  of  another  State,  and  this  claim  is  ex- 
pressly denied,  the  Supreme  Court  has  j  urisdiction  to  review  un- 
der §  709,  Rev.  Stat.^«  Again,  where  the  State  Court  denied  the 
contention  of  plaintiff  in  error,  defendant  below,  that  a  State 
statute  as  appHed  to  transportation  of  an  article  from  one  State 
to  another  was  in  conflict  with  the  commerce  clause  of  the  Con- 
stitution, a  Federal  question  is  involved  and  the  Supreme  Court 
has  jurisdiction.^^  Where  an  act  of  a  State  legislature  authorized 
the  lease  of  such  portion  of  water  power  as  was  not  required 
by  a  State  institution,  and  the  question  of  legal  title  of  the 
plaintiff  to  the  lands  in  question  was  purely  a  local  issue,  and 
the  question  whether  the  erection  of  a  steam  plant  by  the  de- 
fendant was  an  incident  to  its  contract  with  the  State  institu- 
tion are  not  reviewable  on  writ  of  error  from  the  Federal  Su- 
preme Court  to  a  State  Court.^«  Where  the  bill  of  the  trustee 
of  bondholders  of  a  water  company,  claiming  an  exclusive 
contract  with  a  municipality,  shows  that  an  act  of  the  legis- 
lature and  an  ordinance  of  the  city  have  been  passed  under 
which  the  city  shall  construct  its  own  waterworks,  and  that 
during  the  life  of  the  contract  the  source  of  the  abihty  of  the 
water  company  to  pay  interest  on,  and  principal  of,  its  bonds 
will  be  cut  off,  a  case  is  presented  involving  a  constitutional 

w  El  Paso  &  Northeastern  Ry.  Co.  v.  Gutierrez,  215  U.  S.  87,  54  L.  ed. 

,  30  Sup.  Ct. ,  aff'g  117  S.  W.  426,  and  approving  Hyde  v.  Southern 

Ry.  Co.,  31  App.  D.  C.  . 

For  §  709,  Rev.  Stat.,  see  note  under  §  204,  herein. 

58  American  Express  Co.  v.  MuIHns,  212  U.  S.  311,  53  L.  ed.  525,  29  Sup. 
Ct.  381.    See  §  204,  note  herein  for  §  709,  Rev.  Stat. 

57  Adams  Express  Co.  v.  Kentucky,  214  U.  S.  218,  53  L.  ed.  972,  29  Sup. 
Ct.  633;  Western  Turf  Assoc,  v.  Greenberg,  204  U.  S.  359,  51  L.  ed.  520, 
27  Sup.  Ct.  3S4,  124  Ky.  182,  reversed. 

58  Columbia  Water  Power  C'o.  v.  Columbia  Electric  St.  Ry.  L.  &  P.  Co., 
172  U.  S.  475,  43  L.  ed.  521,  19  Sup.  Ct.  247,  aff'g  43  S.  C.  154,  20  S.  E.  1002. 

345 


§  208  JURISDICTION   OF  COURTS 

question,  and  irrespective  of  diverse  citizenship,  the  Circuit 
Court  of  the  United  States  has  jurisdiction  to  determine  the 
nature  and  vahdity  of  the  original  contract  and  whether  the 
subsequent  legislation  and  ordinance  impaired  its  obhgations 
within  the  meaning  of  the  Federal  Constitution.^^ 

A  State  cannot  inflict  a  penalty  for  the  nondelivery  of  a 
telegram  within  the  limits  of  a  place  under  the  exclusive  juris- 
diction of  the  United  States;  and  it  is  held  that  under  the  stat- 
ute of  Virginia  in  that  regard  the  penalty  cannot  be  collected 
for  the  nondelivery  of  a  telegram  to  an  addressee  within  the 
limits  of  the  Norfolk  Navy  Yard.  Congress  alone  can  prescribe 
penalties  in  such  a  case.  And  where  plaintiff  in  error,  defend- 
ant below,  in  a  suit  for  penalty  under  a  State  law  asks  and  the 
court  refuses  an  instruction  that  if  the  jury  find  that  the  de- 
fault occurred  within  a  navy  yard,  over  which  the  United  States 
had  exclusive  jurisdiction,  the  recovery  could  not  be  had  under 
the  State  law,  the  Federal  Supreme  Court  has  jurisdiction  to 
review  the  judgment .®° 

59  Mercantile  Trust  Co.  v.  Columbus,  203  U.  S.  311,  27  Sup.  Ct.  83,  51 
L.  ed.  198. 

eo  Western  Union  Teleg.  Co.  v.  Chiles,  214  U.  S.  274,  53  L.  ed.  994,  29  Sup 
Ct.  613,  reversing  107  Virginia,  60. 

When  Federal  question  exists  and  court  has  jurisdiction,  see  also  the 
following  cases:  Columbia  Water  Power  Co.  v.  Columbia  Electric  St.  Ry. 
L.  &  P.  Co.,  172  U.  S.  475,  43  L.  ed.  521,  19  Sup.  Ct.  247,  aff'g  43  S.  C.  154, 
20  S.  E.  1002  (impairment  of  obligation  contract  appeared) ;  Chicago,  Bur- 
lington &  Quincy  R.  Co.  v.  Nebraska,  170  U.  S.  57,  42  L.  ed.  948,  18  Sup. 
Ct.  513  (impairment  of  obligation  of  contract);  Central  National  Bk.  v. 
Stevens,  169  U.  S.  432,  18  Sup.  Ct.  403,  42  L.  ed.  807  (Federal  Court  decree 
and  effect  of  in  State  Court) ;  California  Bank  v.  Kennedy,  167  U.  S.  362, 
17  Sup.  Ct.  831,  14  Bkg.  L.  J.  375  (writ  of  error;  State  Court;  decision  hold- 
ing national  bank  liable  as  stockholder  in  savings  bank) ;  Metropolitan  Nat. 
Bk.  V.  Claggett,  141  U.  S.  520,  35  L.  ed.  841,  12  Sup.  Ct.  60,  6  Bkg.  L.  J.  24 
(national  bank;  conversion  of  State  bank);  Cates  v.  Producers  &  C.  Oil 
Co.  (U.  S.  C.  C),  96  Fed.  7  (quieting  title  to  mining  claim);  Chicago,  Rock 
I.  &  P.  R.  Co.  V.  St.  Joseph  Union  Depot  Co.  (U.  S.  C.  C),  92  Fed.  22 
(whether  State  Court  gives  full  faith  and  credit  to  Federal  judgment); 
San  Joaquin  &  K.  R.  Canal  &  I.  Co.  v.  Stanislaus  County  (U.  S.  C.  C),  90 
Fed.  516  (fixing  water  rates  too  low),-  Minnesota  v.  Duluth  &  Iron  Range 
Rd.  (U.  S.  C.  C),  87  Fed.  497  (resumption  of  lands  granted  railroad); 
Florida  C.  &  P.  R.  Co.  v.  Bell  (U.  S.  C.  C.  A.),  87  Fed.  369,  31  C.  C.  A.  9, 
59  U.  S.  App.  189  (action  to  recover  railroad  lands;  construction  of  acts  of 
340 


OVER  CORPORATIONS  CONTINUED  §  209 

§  209.  Federal  Question  or  Right— When  Court  no 
Jurisdiction  — Instances. 

Each  State  may,  subject  to  restrictions  of  the  Federal  Con- 
stitution, determine  the  limit  of  the  jurisdiction  of  its  courts, 
and  the  decision  of  the  highest  court  sustaining  jurisdiction 
although  the  cause  of  action  arose  outside  the  border  of  the 
State  is  final  and  does  not  present  a  Federal  question.^^ 

Although  it  appears  from  plaintiff's  statement  of  his  claim 
that  it  cannot  be  maintained  at  all  because  inconsistent  with 
the  Constitution  or  laws  of  the  United  States,  it  does  not  fol- 
low that  the  case  arises  under  that  Constitution  or  those  laws.^- 

Where  the  validity  of  the  local  statute  under  which  national 
bank  shares  are  assessed  was  not  drawn  in  question,  but  the 
only  objection  in  the  State  Court  was  that  the  assessment  was 
in  excess  of  actual  value,  exorbitant,  unjust  and  not  in  pro- 
portion with  other  like  property,  no  Federal  right  was  set  up 
or  denied  and  the  Supreme  Court  has  no  jurisdiction  to  review 
the  judgment  under  §  709,  Revised  Statutes.^^ 

Congress  involved);  Nashville,  C.  &  St.  L.  R.  Co.  v.  Taylor  (U.  S.  C.  C), 
86  Fed.  168  (bill  against  State  board  of  equalizers  for  injunction;  taxation 
of  railroad  property;  discrimination  under  alleged  unconstitutional  law); 
Consolidated  Water  Co.  v.  San  Diego  (U.  S.  C.  C),  84  Fed.  369  (city  ordi- 
nance fixing  water  rates);  Indianapolis  CJas  Co.  v.  Indianapolis  (U.  S.  C.  C), 
82  Fed.  245  (action  for  relief  against  statute  fixing  rates  for  public  service 
corporation);  Snohomish  County  v.  Puget  Sound  Nat.  Bk.  (U.  S.  C.  C), 
81  Fed.  518  (suit  to  wind  up  affairs  of  insolvent  national  bank);  Crystal 
Springs  Land  &  W.  Co.  v.  Los  Angeles  (U.  S.  C.  C),  76  Fed.  148  (contested 
title  to  water  rights;  State  statute  as  to  transferring  property);  Rutter  v. 
Shoshone  Min.  Co.  (U.  S.  C.  C),  75  Fed.  37  (adverse  claim  to  apphcation 
for  patent  to  mine);  St.  Paul,  M.  &  M.  R.  Co.  v.  St.  Paul  &  N.  P.  R.  Co. 
(U.  S.  C.  C.  A.),  68  Fed.  2  (deeds  of  land  to  railroad;  violation  of  Federal 
grants);  Kentucky  &  I.  Bridge  Co.  v.  Louisville  &  N.  R.  Co.  (U.  S.  C.  C), 
37  Fed.  567,  2  L.  R.  A.  289,  2  Int.  Com.  Rep.  351  (enforcement  of  order 
of  Interstate  Commerce  Commission). 

61  St.  Louis  &  Iron  Mountain  Ry.  Co.  v.  Taylor,  210  U.  S.  281,  52  L.  ed. 
1061,  28  Sup.  Ct.  616. 

62  Arkansas  v.  Kansas  &  T.  Coal  Co.  &  S.  F.  Ry.  Co.,  183  U.  S.  185,  46 
L.  ed.  144,  22  Sup.  Ct.  47. 

63  First  National  Bank  v.  City  Council  of  Estherville,  215  U.  S.  341,  54 
L.  ed.  ,  30  Sup.  Ct.  .  Writ  of  error  to  review  136  Iowa,  203,  dis- 
missed. 

For  §  709,  Rev.  Stat.,  see  note  to  §  204,  herein. 

347 


§  209  JURISDICTION    OF   COURTS 

Where  the  State  Court  decides  that,  under  the  law  of  the 
State  the  constitutionality  whereof  is  not  attacked,  the  action 
of  defendant  in  giving  replevy  bond  and  answering  amounted 
to  a  general  appearance  and  waiver  of  objection  to  jurisdiction 
based  on  a  Federal  ground,  the  ruling  of  general  appearance 
rests  on  a  nonFederal  ground  sufficient  to  sustain  it  and  can- 
not be  reviewed  by  the  Supreme  Court.  And  where  plaintiff  in 
error  did  not  set  up  in  the  State  Court  the  contention  that  the 
contract  of  interstate  shipment  should  be  construed  according 
to  the  act  of  Congress  regulating  interstate  shipments  instead 
of  by  the  law  of  the  State  where  made,  but  on  the  contrary, 
contended  that  it  should  be  construed  by  the  law  of  the  State 
of  destination  and  trial  of  the  case,  the  record  presents  no 
Federal  question  properly  set  up  in  the  court  below  that  can 
be  considered  by  the  Supreme  Court  .*^''  A  suit  brought  by  ship- 
pers to  enjoin  a  railroad  company  from  putting  a  tariff  schedule 
into  effect  on  the  ground  that  it  violates  rights  secured  by  the 
act  to  regulate  commerce  is  a  case  arising  under  the  Constitu- 
tion and  laws  of  the  United  States,  and  the  jurisdiction  of  the 
Circuit  Court  over  the  person  of  the  defendant  must  be  deter- 
mined accordingly.  And  under  the  jurisdictional  act*^-'^  the 
Circuit  Court  in  the  district  of  which  the  defendant  is  not  an 
inhabitant  has  not  jurisdiction  of  a  case  arising  under  the  Con- 
stitution and  laws  of  the  Ignited  States,  even  though  diverse 
citizenship  exist,  the  plaintiff  resides  in  the  district,  and  the 
cause  be  one  alone  cognizable  in  a  Federal  Court  .'^^    A  writ  of 

M  Cincinnati,  New  Orleans  &  Texas  Pac.  Ry.  Co.  v.  Slade,  216  U.  S.  78, 
54  L.  ed. ,  30  Sup.  Ct. .  Writ  of  error  to  review  3  Ga.  App.  400,  dis- 
missed. 

65  Act  of  March  3,  1875,  chap.  137,  18  Stat.  470,  as  amended  by  the  act 
of  March  3,  1887,  chap.  373,  24  Stat.  552,  U.  S.  Comp.  Stat.,  1901,  p.  508, 
corrected  by  act  of  August  13,  1888,  chap.  86G,  25  Stat.  433,  U.  S.  Comp. 
Stat.,  1901,  p.  508,  noted  under  §  161,  herein. 

68  Macon  Grocery  Co.  v.  Atlantic  Coast  Line  Rd.  Co.,  215  U.  S.  501,  54 

L.  ed. ,  30  Sup.  Ct.  — ,  aff'g  166  Fed.  166.    Mr.  Justice  Harlan  dissented. 

The  court,  per  Mr.  Justice  White  (at  p.  507),  said:  "In  cases  of  the  character 
of  the  one  at  bar  the  rulings  of  the  lower  Federal  Courts  have  uniformly 
been  to  the  effect  that  they  arose  under  the  Constitution  and  laws  of  the 
United  States.    Tift  v.  Southern  Railway  Co.,  123  Fed.  789,  793;  Northern 

348 


OVER   COlirUKATlONS    CONTINUED  §  209 

error  will  l)c  dismissed  for  want  of  jurisdiction  wliore  there  is 
a  nonFcderal  ground  on  which  the  judgment  rested  sufiicient 
to  sustain  it  withcnit  regard  to  the  Federal  tiuestion.®'' 

Although  the  State  Court  may  incorrectly  charge  as  to  cer- 
tain i)ro visions  of  a  statute  if  the  jury  finds  that  defendant  has 
violated  those  provisions  and  also  other  provisions  not  involv- 
ing any  Federal  question,  and  only  one  penalty  is  assessed, 
the  judgment  rests  on  a  nonFederal  ground  sufficient  to  sus- 
tain it,  and  the  Supreme  Court  has  not  jurisdiction  to  review 
it  under  §  709,  Revised  Statutes.^^ 

When  a  State  Court  decides  a  case  u])on  a  nonFederal  ground 

Pacific  Ry.  Co.  v.  Pacific,  etc.,  Assn.,  165  Fed.  1;  Memphis  Cotton  Oil  Co.  v. 
Illinois  Central  R.  R.  Co.,  164  Fed.  290,  292;  Imperial  Colliery  Co.  v.  Chesa- 
peake &  O.  Ry.  Co.,  171  Fed.  589.  And  see  Sunderland  Bros.  v.  Chicago, 
R.  I.  &  P.  Ry.  Co.,  158  Fed.  877;  Jewett  Bros.  v.  C,  M.  &  St.  P.  Ry.  Co., 
156  Fed.  160.  We  are  of  opinion  that  the  case  before  us  may  properly  be 
Baid  to  be  one  arising  under  a  law  or  laws  of  the  United  States.  As  said  by 
Taft,  Circuit  Judge,  in  Toledo,  A.  A.  &  N.  M.  Ry.  Co.  v.  Pennsylvania  Co. 
et  al.,  54  Fed.  730: 

"'It  is  immaterial  what  rights  the  complainant  would  have  had  before 
the  passage  of  the  interstate  commerce  law.  It  is  sufficient  that  ('ongress, 
in  the  constitutional  exei'cise  of  power,  has  given  the  positive  sanction  of 
Federal  law  to  the  rights  secured  in  the  statute,  and  any  case  involving  the 
enforcement  of  those  rights  is  a  case  arising  under  the  laws  of  the  United 
States.' 

"The  object  of  the  bill  was  to  enjoin  alleged  unreasonable  rates,  threat- 
ened to  be  exacted  by  carriers  subject  to  the  act  to  regulate  commerce. 
The  right  to  be  exempt  from  such  unlawful  exactions  is  one  protiictcd  by 
the  act  in  question,  and  the  purpose  to  avail  of  the  benefit  of  that  act,  as 
well  as  of  the  anti-trust  act,  is  plainly  indicated  by  the  averments  of  the 
l)ill.  Of  necessity,  in  determining  the  right  to  the  relief  prayed  for,  a  con- 
struction of  the  act  to  regulate  commerce  was  essentially  involved. 

"The  jurisdiction  of  the  Circuit  Court  not  being  invoked  solely  upon  the 
ground  of  diversity  of  citizenship,  it  inevitably  follows  that,  as  there  was  no 
waiver  of  the  exemption  from  being  sued  in  the  court  below,  that  court  was 
without  jurisdiction  of  the  persons  of  the  defendants.  In  re  Keasby  & 
Mattison  Co.,  160  U.  S.  221,  40  L.  ed.  402,  16  Sup.  Ct.  273;  In  re  Moore, 
209  U.  S.  490,  52  L.  ed.  904,  28  Sup.  Ct.  706;  Western  Loan  &  Sav.  Co. 
V.  Butte  &  Boston  Min.  Co.,  210  U.  S.  368,  52  L.  ed.  1101,  2S  Sup.  Ct. 
720." 

67  St.  Louis  Southwestern  Ry.  Co.  v.  Tyler,  212  U.  S.  552,  29  Sup.  Ct.  684, 
53  L.  ed.  649,  writ  of  error  to  review  99  Tex.  491,  dismissed. 

68  Waters-Pierce  Oil  Co.  v.  Texas,  212  U.  S.  86,  53  L.  ed.  417,  29  Sup. 
Ct.  220. 

349 


§  209  JURISDICTION   OF   COURTS 

which  is  sufficient  to  maintain  the  decision  the  Supreme  Court 
will  not  review  the  judgment.^® 

The  denial  by  the  State  Court  to  give  to  a  Federal  statute 
the  construction  insisted  upon  by  a  party  which  would  leatl 
to  a  judgment  in  his  favor  is  a  denial  of  a  right  or  immunit}^ 
under  the  laws  of  the  United  States  and  prevents  a  Federal 
question  reviewable  by  the  Supreme  Court  under  §  709,  of  the 
Revised  Statutes.'^" 

89  Waters-Pierce  Oil  Co.  v.  Texas,  212  U.  S.  86,  53  L.  ed.  417,  29  Sup. 
Ct.  220. 

70  St.  Louis  &  Iron  Mountain  Ry.  v.  Taylor,  210  U.  S.  281,  52  L.  ed.  1061, 
28  Sup.  Ct.  616. 

As  to  nonF'ederal  question  and  nonjurisdiction  of  court,  see  also  the 
following  cases:  Telluride  Power  Transmission  Co.  v.  Rio  Grande  Western 
Ry.  Co.,  175  U.  S.  639,  20  Sup.  Ct.  245,  44  L.  ed.  305,  dismissing  appeal,  16 
Utah,  125,  51  Pac.  146  (questions  of  fact  and  local  law;  mining  water  rights; 
jurisdiction  on  writ  of  error  does  not  extend  to);  Allen  v.  Southern  Pac. 
Rd.  Co.,  173  U.  S.  479,  43  L.  ed.  775,  19  Sup.  Ct.  518,  dismissing  writ  of  error 
in  112  Cal.  455,  44  Pac.  796  (case  decided  by  State  Court  wholly  independ- 
ent of  Federal  question  set  up,  and  adequately  sustained  independent  of 
such  nonFederal  question) ;  Capital  National  Bk.,  Lincoln,  v.  First  Nat. 
Bk.,  Cadiz,  172  U.  S.  425,  43  L.  ed.  502,  19  Sup.  Ct.  202,  dismissing  writ  of 
error  in  49  Neb.  795,  69  N.  W.  1151  (allegation  of  organization  of  national 
bank  under  Banking  Act  and  appointment  of  receiver  who  took  possession 
as  trustee  and  these  averments  were  admitted  but  there  was  a  failure  to 
claim  rights  under  Federal  laws);  Pierce  v.  Somerset  Ry.  Co.,  171  U.  S.  641, 
43  L.  ed.  316,  19  Sup.  Ct.  64  (error  to  State  Court;  judgment  based  on  distinct 
grounds;  decision  of  one  question  sufficient  notwithstanding  Federal  ques- 
tion, to  sustain  judgment;  Supreme  Court  will  not  review);  Galveston,  H. 
&  S.  A.  Ry.  Co.  V.  Texas,  170  U.  S.  226,  18  Sup.  Ct.  603,  42  L.  ed.  1017 
(State  Constitution  prohibiting  land  grants  enforced  against  railroad  com- 
pany involves  no  infraction  of  Federal  Constitution) ;  St.  Louis,  C.  G.  & 
Ft.  Smith  R.  Co.  v.  Merriam,  156  U.  S.  478,  39  L.  ed.  502,  15  Sup.  Ct.  443 
(writ  of  prohibition  directed  to  State  Court  and  to  railroad  receiver,  directing 
him  to  turn  over  property  to  another  receiver  presents  no  Federal  question) ; 
St.  Paul,  M.  &  M.  Ry.  Co.  v.  Todd  County,  142  U.  S.  282,  35  L.  ed.  1014, 
12  Sup.  Ct.  281  (exemption  from  taxation;  railroads;  obligation  of  contract; 
not  subject  to  review  on  error) ;  Peabody  Gold  Min.  Co.  v.  Gold  Hill  Min. 
Co.  (U.  S.  C.  C),  97  Fed.  657  (trespass  upon  mining  claim);  CaUfornia  Oil  & 
Gas  Co.  V.  Miller  (U.  S.  C.  C),  96  Fed.  12  (suit  to  quiet  title;  question  of 
fact  and  not  construction  of  law  of  LTnited  States) ;  Murray  v.  Chicago  & 
N.  W.  R.  Co.  (U.  S.  C.  C.  A.),  92  Fed.  868,  35  C.  C.  A.  62,  13  Am.  &  Eng. 
Rd.  Cas.  (N.  S.)  278,  aff'g  62  Fed.  24  (constitutional  question  not  raised; 
interstate  transportation  charges;  common  as  affecting);  Montana  Ore 
Purchasing  Co.  v.  Boston  &  M.  C.  C.  &  S.  Min.  Co.  (U.  S.  C.  C.  A.),  85  Fed. 

350 


OVER   COKPOKATIONS   CONTINUED  §§210,  LMi 

§  210.  Presentment  of  Federal  Question— Record. 

In  order  to  give  the  United  States  Supreme  Court  jurisdic- 
tion, under  §  709  ^^  of  the  Revised  Statutes,  not  only  must  a 
right  under  the  Constitution  of  the  United  States  be  specially 
set  up,  but  it  must  appear  that  the  right  was  denied  in  fact  or 
that  the  judgment  could  not  have  been  rendered  without  de- 
nying it.  When  the  constitutional  right  was  not  set  up  in  the 
original  plea,  and  the  record  does  not  disclose  the  reasons  of 
the  State  Court  for  refusing  to  allow  a  new  plea  setting  up  the 
constitutional  right,  and  the  record  shows  that  the  refusal 
might  have  been  sufficiently  based  on  nonFederal  grounds,  the 
Supreme  Court  of  the  United  States  cannot  review  the  judg- 
ment under  the  above  section  of  the  Revised  Statutes,  and 
when  it  does  not  appear  in  the  record  that  a  telegraph  message 
between  two  points  in  the  same  State  had  to  be  transmitted 
partly  through  another  State,  except  by  a  plea  which  the 
State  Court  refused,  on  nonFederal  grounds,  to  allow  to  be 
filed,  no  Federal  question  is  involved  and  said  Supreme  Court 

cannot  review  the  judgment  under  §  709  of  the  Revised  Stat- 
utes.^2 

§  211.  Removal  of  Suits — Corporation  Created  by  Con- 
gress— Constitution  and  Laws  of  United  States — Separable 
Controversy. 

A  suit  brought  in  a  State  Court  against  a  corporation  organ- 
ized under  an  act  of  Congress  may  be  removed  to  a  Federal 
Court. ''^  As  a  corporation  created  by  act  of  Congress  derives 
all  its  rights  from  the  law  creating  it,  suits  brought  against  it, 
on  account  of  its  action,  arise  under  the  Constitution  and  laws 
of  the   United  States  and  are  removable  into  the  Federal 

867,  29  C.  C.  A.  462,  57  U.  S.  App.  13  (mining  claim;  right  to  follow  vein; 
question  of  fact) ;  Crystal  Springs  Land  &  Water  Co.  v.  Los  Angeles  (U.  S. 
C.  C),  82  Fed.  114  (quieting  title;  averment  that  certain  State  statutes  so 
attempt  to  transfer  title  defeated  by  denial). 

71  Given  in  note  under  §  204,  herein. 

73  Western  Union  Teleg.  Co.  v.  Wilson,  213  U.  S.  52,  53  L.  ed.  693,  29 
Sup.  Ct.  403. 

73  Supreme  Lodge  Knights  of  P.  v.  Hill  (U.  S.  C.  C.  A.),  76  Fed.  468,  22 
C.  C.  A.  280,  42  U.  S.  App.  200,  5  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  157. 

351 


§  212,  213  JURISDICTION   OF   COURTS 

Courts.'^'*  Wliere  the  Circuit  Court  has  jurisdiction  by  reason 
of  the  fact  that  the  defendant  is  a  corporation  created  by  an 
act  of  Congress  the  joinder  of  other  defendants,  citizens  of 
plaintiff's  State,  does  not  prevent  removal  to  the  Circuit  Court 
if  there  is  no  separable  controversy  and  all  the  defendants 
unite  in  the  petition;  the  Federal  character  permeates  the  en- 
tire case  and  affects  all  parties  defendant.'^ 

§  212.  Removal  of  Suits— Corporations  Created  by  Con- 
gress— National  Banks. 

Neither  a  national  bank  nor  its  receiver  can  remove  a  suit 
into  the  Federal  Court  since  the  act  of  1887  ''^  on  the  ground 
that  it  is  a  Federal  corporation.^' 

§  213.  Removal  of  Suits— Separable  Controversy— Joint 
Action. 

In  determining  whether  a  case  may  be  removed  by  one  de- 
fendant the  question  is  not  what  the  rule  of  the  Federal  Court 
may  be  as  to  whether  or  not  the  action  is  joint,  but  whether 
the  controversy  is  one  made  removable  by  Congress  in  §  2  of 
the  acts  of  March  3,  1887,  and  August  13,  1888.'« 

In  an  action  brought  in  a  State  Court  by  citizens  of  one  State 
against  two  corporations,  citizens  of  another  State,  and  the 

74  Dunn,  Matter  of,  212  U.  S.  374,  53  L.  ed.  558,  29  Sup.  Ct.  299  (holding 
also  that  the  P'ederal  Supreme  Court  will  judicially  notice  that  a  defendant 
corporation  was  incorporated  by  act  of  Congress) ;  Osborn  v.  Bank  of  United 
States,  9  Wheat.  (22  U.  S.)  738,  6  L.  ed.  204. 

75  Dunn,  Matter  of,  212  U.  S.  374,  53  L.  ed.  558,  29  Sup.  Ct.  299,  holding 
also  that  the  application  of  §  10  of  the  act  of  March  11,  1902,  32  Stat.  68, 
chap.  183,  is  not  limited  to  local  actions  described  in  §  8  of  act  of  March  3, 
1875,  chap.  137,  18  Stat.  470. 

78  Act  of  March  3,  1887. 

77  Wichita  National  Bk.  v.  Smith  (U.  S.  C.  C.  A.),  72  Fed.  568,  36  U.  S. 
App.  530,  19  C.  C.  A.  42,  cited  in  Miller  v.  LeMars  Xat.  Bank  (U.  S.  C.  C.) 
116  Fed.  551,  553.  Examine  Continental  Nat.  Bank  v.  Buford,  191  U.  S. 
119,  123,  124,  48  L.  ed.  119,  24  Sup.  Ct.  54;  Petri  v.  Commercial  Nat.  Bank, 
142  U.  S.  644,  35  L.  ed.  1144,  12  Sup.  Ct.  325,  per  Mr.  Chief  Justice  Fuller. 
See  also  note  in  Fed  Stat.  Annot.  pp.  193  et  seq.;  Act  of  Aug.  13,  1888. 

78  Alabama  Great  Southern  Ry.  Co.  v.  Thompson,  200  U.  S.  206,  50  L. 
ed.  441,  26  Sup.  Ct.  161. 

352 


OVER  CORPORATIONS   CONTINUED  §  214 

directors  thereof,  some  of  whom  are  citizens  of  the  same  State 
as  the  plaintiff,  for  the  purpose  of  setting  aside  a  conveyance 
made  by  one  defendant  corporation  to  the  other,  the  action 
may  be  severable  as  to  the  conveying  corporation;  and  if  it  is 
so,  and  as  to  the  cause  of  action  alleged  against  it,  its  directors 
are  not  necessary  parties,  it  may  remove  the  action  as  to  it 
into  the  Circuit  Court  of  the  United  States.'^''  Where  plaintiff 
in  good  faith  insists  on  the  joint  Hability  of  all  defendants  until 
the  close  of  the  trial,  the  dismissal  of  the  complaint  on  the 
merits  as  to  the  defendants  who  are  citizens  of  plaintiff's  State 
does  not  operate  to  make  the  cause  then  removable  as  to  non- 
resident defendants  and  to  prevent  the  plaintiff  from  taking 
a  verdict  against  the  defendants  who  might  have  removed 
the  cause  had  they  been  sued  alone,  or  if  there  had  originally 
been  a  separable  controversy  as  to  them.*" 

§  214.  Removal  of  Suits — Separable  Controversy — Joint 
Action — Torts — Diversity  of  Citizenship. 

A  railroad  cor])oration  sued  jointly  with  its  servant  for  neg- 
ligence of  the  latter  for  which  the  former  is  responsible,  may 
not  remove  the  case  into  the  Federal  Court  unless  diversity  of 
citizenship  also  exists  as  to  the  other  defendants.*^ 

A  railroad  corporation  may  be  jointly  sued  with  the  engineer 

79  Gcer  V.  Mathieson  Alkali  Works,  190  U.  S.  428,  47  L.  ed.  1122,  23  Sup. 
Ct.  .SU7. 

8"  Lathrop,  Shea  &  Henwood  Co.  v.  Interior  Construction  &  Imp.  Co., 

215  U.  S.  246,  53  L.  ed.  ,  29  Sup.  Ct.  — .    The  action  in  this  case  was 

against  defendant  and  a  railroad  company  to  recover  upon  a  contract  by 
plaintiff  with  the  construction  company  and  for  the  materials  and  use  of 
certain  articles  by  the  railroad.  Among  other  matters  it  was  averred  that 
the  construction  company  was  the  agent  and  representative  of  the  railroad 
company,  and  that  the  latter  became  and  was  responsible  and  lialjle  for  the 
acts  and  obligations  of  the  construction  company.  Due  performance  by 
lilaintiff  of  the  contract  was  alleged.  It  was  also  averred  that  the  railroad 
company  was  a  New  York  corporation,  and  the  construction  company  a  New 
Jersey  corporation.  The  case  was  one  of  error  to  the  Federal  Court,  and  the 
facts  involved  the  validity  of  the  removal  of  a  cause  to  the  Federal  Court. 

81  Cincinnati,  N.  O.  &  T.  P.  Ry.  Co.  v.  Bohon,  200  U.  S.  221,  50  L.  ed.  48, 
26  Sup.  Ct.  166;  .Mabama  Southern  Railway  v.  Thompson,  200  U.  S.  206, 
50  L.  ed.  441,  26  Sup.  Ct.  161. 

23  353 


§  214  JURISDICTION   OF   COURTS 

and  (•oiKliictor  of  one  of  its  trains  when  it  is  sought  to  make 
the  corporation  Hable  only  by  reason  of  their  neghgence,  and 
solely  upon  the  ground  of  the  responsibility  cjf  a  principal  for 
the  act  of  his  servant,  though  not  personally  present  or  direct- 
ing and  not  charged  with  any  concurrent  act  of  negligence. 
Such  a  suit  is  not  removable  by  the  corporation,  as  a  separable 
controversy,  even  though  the  amount  involved  exceed  two 
thousand  dollars,  exclusive  of  interests  and  costs,  and  the  requi- 
site diversity  of  citizenship  exists  between  the  said  company 
and  the  plaintiff,  if  the  citizenship  of  the  individual  defendants 
sued  with  the  company  as  joint  tort  feasors  is  identical  with 
that  of  the  plaintiff.*^ 

A  State  has  the  right  by  its  Constitution  and  laws  to  regulate 
actions  for  negligence;  and  where  it  provides,  as  has  been  done 
by  §  241  of  the  Constitution  and  §  6  of  the  statutes  of  Ken- 
tucky, that  a  plaintiff  may  proceed  jointly  or  severally  against 
those  liable  for  the  injury,  nothing  in  the  Federal  removal 
statute  converts  such  an  action  into  a  separable  controversy 
for  the  purposes  of  removal,  because  of  the  presence  of  a  non- 
resident defendant  therein  properly  joined  under  the  law  of 
the  State  wherein  it  is  conducting  operations  and  is  duly  served 
with  process.^^ 

The  following  case  was  an  ordinary  action,  under  a  State 
statute,  for  wrongfuU}'  causing  the  death  of  plaintiff's  intestate, 
in  which  no  Federal  question  was  presented  by  the  pleadings, 
or  litigated  at  the  trial,  and  in  which  the  liability  depended 
upon  principles  of  general  law,  and  not  in  any  way  upon  the 
terms  of  the  order  appointing  receivers;  and  whatever  the 
rights  of  the  receivers  might  have  been  to  remove  the  cause  if 
they  had  been  sued  alone,  the  controversy  was  held  not  a  sep- 
arable controversy  within  the  intent  and  meaning  of  the  act  of 
March  3,  1887,  as  corrected  by  the  act  of  August  13,  1888,  and 
this  being  so,  the  case  came  solely  within  the  first  clause  of  the 

82  Alabama  Great  Southern  Ry.  Co.  v.  Thompson,  200  U.  S.  206,  50  L. 
ed.  441,  26  Sup.  Ct.  161. 

83  Cincinnati,  N.  O.  &  T.  P.  Ry.  Co.  v.  Bohon,  200  U.  S.  221,  50  L.  ed.  48, 
26  Sup.  Ct.  166. 

354 


OVER   CORPORATIONS   CONTINUED  §  215 

section,  and  it  was  not  intended  by  Congress  that,  under  such 
circumstances,  there  should  be  any  difference  between  the 
rule  applied  under  the  first  and  second  clauses  of  the  act.*"* 
When  one  of  several  defendants  in  a  suit  on  a  joint  cause  of  ac- 
tion in  a  State  Court  loses  his  right  to  remove  the  action  into 
a  Circuit  Court  of  the  United  States  by  failing  to  make  th(>  ap- 
phcation  in  time,  the  right  is  lost  as  to  all.*^ 

§  215.  Removal  of  Suits — Separable  Controversy — Joint 
Action — Fraudulent  Joinder. 

While  an  action  conmienccd  in  a  State  Court  against  two 
defendants,  one  of  whom  is  a  resident  and  the  other  a  nonresi- 
dent, may  be  removed  to  the  Circuit  Court  of  the  United  States 
by  the  nonresident  defendant  if  it  can  be  shown  that  the  cause 
of  action  is  separable  and  the  resident  is  joined  fraudulently 
for  the  purpose  of  preventing  the  removal  of  the  cause  to  the 
Federal  Court,  such  removal  cannot  be  had  if  it  does  not  ap- 
pear that  the  resident  defendant  is  fraudulently  joined  for  such 
purpose.  This  rule  will  be  adhered  to  even  if  on  the  trial  of 
the  action  the  lower  court  holds  that  no  evidence  was  given 
by  the  plaintiff  tending  to  show  liability  of  the  resident  de- 
fendant, and  a  second  application  for  removal  from  the  State 
to  the  Federal  Court  has  been  made  and  denied  after  a  trial, 
and  the  trial  court  has  sustained  a  demurrer  to  the  evidence 
as  to  the  resident  defendant,  and  where  it  appears  that  the 
ruling  was  on  the  merits  and  in  invitum.^^ 

84  Chicago,  R.  &  P.  Ry.  Co.  v.  Martin,  178  U.  S.  245,  44  L.  ed.  1053,  20 
Sup.  Ct.  854. 

85  Fletcher  v.  Hamlet,  116  U.  S.  408,  29  L.  ed.  679,  6  Sup.  Ct.  426. 

8«  Kansas  City  Suburban  Belt  &  Ry.  Co.  v.  Herman,  187  U.  S.  63,  23 
Sup.  Ct.  24,  47  L.  ed.  76;  Whitcomb  v.  Smithson,  175  U.  S.  635,  44  L.  ed. 
303,  20  Sup.  Ct.  248;  Powers  v.  Chesapeake  &  Ohio  Railway  Co.,  169  U.  S. 
92,  42  L.  ed.  673,  18  Sup.  Ct.  264. 

In  Illinois  Central  Rd.  Co.  v.  Sheegog,  215  U.  S.  308,  54  L.  ed.  ,  30 

Sup.  Ct.  ,  the  court,  per  Mr.  Justice  Holmes,  said:  "Of  course  if  it  ap- 
pears that  the  joinder  was  fraudulent  as  alleged,  it  will  not  be  allowed  to 
prevent  the  removal.  Wecker  v.  National  EnameHng  &  Stamping  Co., 
204  U.  S.  176,  51  L.  ed.  430,  27  Sup.  Ct.  184.  And  further  there  is  no  doubt 
that  the  allegations  of  fact,  so  far  as  material,  in  a  petition  to  remove,  if 
controverted,  must  be  tried  in  the  court  of  the  United  States,  and  there- 

355 


§  210  JURISDICTION    OF  COURTS 

§  216.  Removal  of  Suits —Separable  Controversy— Joint 
Action— What  Record  Must  Show. 

Where  the  right  of  removal  depends  upon  the  existence  of 
a  separable  controversy,  the  question  is  to  be  determined  by 
the  condition  of  the  record  in  the  State  Court  at  the  time  of 
the  fiUng  of  the  petition  to  remove.  When  concurrent  negli- 
gence is  charged,  the  controversy  is  not  separable,  and  as  the 
complaint  in  this  case,  reasonably  construed,  charged  concur- 
rent negligence,  the  court  declined  to  hold  that  the  State  Courts 
erred  in  retaining  jurisdiction.*''  Again,  whether  or  not  a 
cause  presents  a  separable  controversy  which  authorizes  a  re- 
moval from  a  State  Court  to  a  Circuit  Court  of  the  United  States 
is  to  be  determined  by  the  plaintiff's  own  statement,  made  in 
good  faith  in  the  petition  filed  by  him  in  the  State  Court,  of 
his  cause  of  action  against  the  defendants.  The  plaintiff  has 
the  right  to  prosecute  his  action  to  final  determination  in  his 
own  way,  and  if  in  his  petition  he  states  in  good  faith  a  joint 
cause  of  action  against  two  or  more  defendants,  it  is  not  open 
to  either  or  both  or  all  of  them  by  answering  separately  or 
pleading  separate  defenses  to  make  that  a  several  suit  or  ac- 

fore  must  be  taken  to  be  true  when  they  fail  to  be  considered  in  the  State 
Courts.  Crehore  v.  Ohio  &  Mississippi  Ry.  Co.,  131  U.  S.  240,  244,  33  L. 
ed.  144,  9  Sup.  Ct.  692;  Chesapeake  &  Oliio  Ry.  Co.  v.  McCabe,  213  U.  S. 
207,  53  L.  ed.  765,  29  Sup.  Ct.  430.  On  the  other  hand,  the  mere  epithet 
fraudulent  in  a  petition  does  not  end  the  matter.  In  the  case  of  a  tort  whicli 
gives  rise  to  a  joint  and  several  liability  the  plaintiff  has  an  absolute  right 
to  elect,  and  to  sue  the  tort-feasors  jointly  if  he  sees  fit,  no  matter  what  his 
motive,  and  therefore  an  allegation  that  the  joinder  of  one  of  the  defend- 
ants was  fraudulent,  without  other  groimd  for  the  charge  than  that  its  only 
p\irpose  was  to  prevent  removal,  would  be  bad  on  its  face.  Alabama  Great 
Southern  Ry.  Co.  v.  Thompson,  200  U.  S.  206,  50  L.  ed.  441,  26  Sup.  Ct.  161; 
Cincinnati,  New  Orleans  &  Texas  Pacific  Ry.  Co.  v.  Bohon,  200  U.  S.  221, 
50  L.  ed.  448,  26  Sup.  Ct.  166.  If  the  legal  effect  of  the  declaration  in  this 
case  is  that  the  Illinois  Central  Railroad  Company  was  guilty  of  certain 
acts  and  omissions  by  reason  of  which  a  joint  lialjility  was  imposed  upon, 
it  and  its  lessor,  the  joinder  could  not  be  fraudulent  in  a  legal  sense  on  any 
ground  except  that  the  charge  against  the  alleged  wrongdoer,  the  Illinois 
Central   Railroad   itself,   was  fraudulent  and  false."     Illinois  Central  Ry, 

Co.  V.  Sheegog,  215  U.  S.  308,  316,  54  L.  ed. ,  30  Sup.  Ct. . 

87  Chesapeake  &  Ohio  Ry.  Co.  v.  Dixon,  179  U.  S.  131,  5  L.  ed.  121,  21 
Sup.  Ct.  67. 

356 


OVER   CORPORATIONS   CONTINUED  §§217,  218 

tion  which  the  plaintiff  has  elected  to  make  joint.  But,  if  the 
plaintiff  fails  to  state  any  cause  of  action  against  one  of  the 
defendants,  the  presence  of  that  defendant  as  a  party  to  the 
suit  may  be  disregarded  in  determining  the  right  of  removal.** 

§  217.  Denial  of  Petition  for  Removal— Petitioners' 
Right  to  Elect  Remedy. 

While  a  petitioner,  if  the  State  Court  denies  his  petition  for 
a  removal,  may  remain  in  that  court  and  take  the  case  to  the 
Federal  Supreme  Court  for  review  on  a  writ  of  error  after  final 
judgment,  he  is  not  obliged  so  to  do,  but  may  file  the  record 
in  the  Circuit  Court,  and  that  court  has  jurisdiction  to  deter- 
mine the  question  of  removability,  and,  notwdthstanding  §  720 
of  the  Revised  Statutes,  it  may  protect  its  jurisdiction  by  in- 
junction against  further  proceedings  in  the  State  Court. '*'' 

§  218.  Removal  of  Suit  Denied  in  State  Court— Filing 

88  Reinartson  v.  Chicago  Great  Western  Ry.  Co.  (U.  S.  C.  C),  174  Fed. 
707,  709,  710,  citing  as  settling  the  above  points:  Alabama  Great  Southern 
Ry.  Co.  V.  Thompson,  200  U.  S.  20G,  26  Sup.  Ct.  161,  50  L.  ed.  441.  Com- 
pare Illinois  Central  Rd.  Co.  v.  Sheegog,  215  U.  S.  308,  30  Sup.  Ct. ,  54 

L.  ed.  . 

89  Chesapeake  &  Ohio  Ry.  Co.  v.  McCabe,  213  U.  S.  207,  53  L.  ed.  765, 
29  Sup.  Ct.  430.  The  court,  per  Mr.  Justice  Day,  said:  "  It  is  not  necessary 
to  determine .  whether  the  case  was  removable  or  not.  The  Federal  Court 
was  given  jurisdiction  to  determine  that  question,  it  did  determine  it,  and 
its  judgment  was  conclusive  upon  the  parties  before  it,  until  reversed  by 
a  proper  proceeding  in  this  court.  Instead  of  ]:>ringing  the  case  here  the 
plaintiff  proceeded  in  the  State  Court,  and  tiiat  court  denied  effect  to  the 
Federal  judgment.  The  .plaintii'f  in  error  lost  no  right  when  thus  com- 
pelled to  remain  in  the  State  Court,  notwithstanding  the  Federal  judgment 
in  his  favor,  and  brought  the  suit  here  by  writ  of  error  to  the  final  judg- 
ment of  the  State  Court,  denying  the  right  secured  by  the  Federal  judg- 
ment. It  was  open  to  the  plaintiff  to  bring  the  adverse  decision  of  the 
Federal  Court  on  the  question  of  jurisdiction  to  this  court  for  review.  This 
course  was  not  pursued,  but  the  action  proceeded  in  the  State  Court  evi- 
dently upon  the  theory  that  the  judgment  of  the  Federal  Court  was  a  nul- 
lity if  it  had  erred  in  taking  jurisdiction.  For  the  reasons  stated  we  think 
this  hypothesis  is  not  maintainable.  The  judgment  of  the  Court  of  Appeals 
of  Kentucky  is  reversed  and  the  cause  is  remanded  for  further  proceedings 
not  inconsistent  with  this  opinion,"  Mr.  Justice  McKenna  dissenting.  For 
statement  of  facts  in  this  case  see  note  26  to  §  204,  herein. 

357 


§  'il8  JURISDICTION    OF   COURTS 

Answer  and   Record  —Asserting   Affirmative   Remedy   and 
Denial  of  Jurisdiction. 

The  fact  that  defendant,  after  refusal  of  the  State  Court  to 
grant  the  order  of  removal,  tiled  an  answer,  is  held  not  to  af- 
fect its  right  to  file  the  record  in  the  Circuit  Court  and  obtain 
an  order  of  removal  before  the  time  for  filing  the  answer  as  ex- 
tended had  expired.^*' 

Even  though  a  defendant's  petition  to  remove  is  wrongfully 
denied  by  the  State  Court,  and  in  his  answer  he  protests  against 
the  right  of  the  State  Court  to  retain  jurisdiction,  if  he  asserts 
an  affirmative  remedy  in  the  State  Court,  in  which  he  brought 
in  a  third  party  for  liability  over,  he  submits  his  whole  case 
and  cannot  attack  the  action  of  the  State  Court  in  denying 
his  petition  for  removal  in  the  Federal  Supreme  Court  on  writ 
of  error.®^ 

BoAvent  v.  Deep  River  Lumber  Co.  (U.  S.  C.  C),  174  Fed.  298,  citing 
Dillon  on  Removal,  §  156;  Wilcox  &  Gibbes  Guano  Co.  v.  Phoenix  Ins.  Co. 
(U.  S.  C.  C),  60  Fed.  929  ["whatever  may  have  been  held  in  other  circuits, 
and  whatever  may  be  the  strength  of  the  reasons  upon  which  the  decisions 
to  the  contrary  are  based,  the  Wilcox  case  has  been  uniformly  followed  in 
this  circuit,  and,  in  the  absence  of  any  decision  by  the  Supreme  Court  of 
the  United  States,  is  controlling  authority.  The  opinion  of  Judge  Simon- 
ton  "  (in  the  Wilcox  case,  who  examines  the  decisions  of  the  Federal  Courts 
in  the  several  circuits  and  concludes  that  the  correct  rule  is  that  stated  by 
Judge  Dillon)  "  is  well  considered  and  sustained  by  reason.  It  is  followed 
in  the  Second  Circuit.  Lord  v.  Lehigh  Valley  Rd.  Co.  (U.  S.  C.  C),  104 
Fed.  929,"  per  Connor,  Dist.  J.]. 

As  to  filing  answer  attacking  facts  on  which  the  right  to  remove,  etc.,  de- 
pends, and  determining  issue  in  Federal  Court,  see  Phillips  v.  Western 
Terra  Cotta  Co.  (U.  S.  C.  C),  174  Fed.  873. 

91  Texas  &  Pacific  Ry.  Co.  v.  Eastin  &  Knox,  214  U.  S.  153,  53  L.  ed.  94G, 
29  Sup.  Ct.  564,  aff'g  100  Tex.  556  (this  was  an  action  against  a  railroad 
corporation  and  its  agents  for  wrongfully  billing  and  shipping  cattle  over 
one  road  when  requested  to  ship  over  another  resulting  in  injury  and  dam- 
age to  the  cattle).  In  this  case  Mr.  Justice  McKenna  said:  "The  assign- 
ments of  error  present  the  question  of  the  right  of  the  Texas  and  Pacific 
Company  to  a  removal  of  the  case  to  the  Circuit  Court  of  the  United  States, 
(1)  Because,  being  a  corporation  chartered  under  an  act  of  Congress,  the 
suit  was  one  arising  under  the  laws  of  the  United  States,  and  that  this  char- 
acter was  not  taken  from  it  by  joining  a  local  defendant  when  it  was  an  ac- 
tion to  establish  a  joint  liability.  (2)  Where  the  facts  stated  in  the  petition 
for  removal  show  a  cause  properly  removable  from  a  State  to  a  Federal 
Court,  the  State  Court  has  no  jurisdiction  to  pass  finally  upon  them;  that 
•  j58 


OVER   CORPORATIONS   CONTINUED  §  219 

The  right  of  a  defendant  who  has  petitioned  for  removal  of 
a  case  to  the  Federal  Court  cannot  be  extended  beyond  what  is 
necessary  to  defend  the  case;  he  cannot  deny  the  jurisdiction 
after  invoking  it  for  affirmative  relief.^^ 

§  219.  Federal  Circuit  Court  May  Determine  Remova- 
bility of  Cause  and  Protect  Such  Jurisdiction — Injunction. 

The  United  States  Circuit  Court  has  jurisdiction  to  deter- 
mine for  itself  the  removability  of  a  cause  and  may  take  juris- 
diction thereof  and  protect  such  jurisdiction  even  though  the 
State  Court  refuse  to  make  the  removal  order.^^  So  after  the 
presentation  of  a  sufficient  petition  and  bond  to  the  State 
Court  in  a  removable  case,  it  is  competent  for  the  Circuit  Court, 
by  a  proceeding  ancillary  in  its  nature,  without  violating  the 
Federal  statute  ^'^  forbidding  a  court  of  the  United  States  from 
enjoining  proceedings  in  a  State  Court,  to  restrain  the  party 

right  is  one  for  the  Federal  Court,  it  having  the  exclusive  province  of  pass- 
ing upon  such  questions  of  fact. 

"The  first  proposition  is  sustained  in  the  Matter  of  Dunn,  212  U.  S.  374, 
53  L.  ed.  558,  29  Sup.  Ct.  299;  the  second  proposition  is  sustained  in  Chesa- 
peake &  Ohio  Railway  v.  Emma  R.  McCabe,  Administratrix,  213  U.  S. 
207,  53  L.  ed.  765,  29  Sup.  Ct.  430.  The  latter  case  also  decides  that  if  an 
application  for  removal  be  denied  the  petitioner  loses  no  right  by  being 
compelled  to  stay  in  the  State  Court.  In  other  words,  that  the  petitioner 
may  stay  in  the  State  Court  and  defend  the  action  against  him,  and  if  the 
judgment  go  against  him  bring  the  case  to  this  court  and  have  the  question 
of  removal  determined.  But  plaintiffs  in  error  did  not  defend  only  against 
the  cause  of  action.  They  instituted  a  cause  of  action  against  the  St.  Louis 
&  San  Francisco  Railroad  Company,  in  which  the  defendant  in  error  had 
no  concern,  and  recovered  a  judgment  against  that  company  in  the  sum  of 
•11,800.  By  doing  so  they  invoked  the  jurisdiction  of  the  State  Court  in 
their  own  account  and  for  their  own  purpose,  and  the  case  is  brought  within 
the  ruling  in  Merchants'  Heat  &  L.  Co.  v.  Clow  &  Lens,  204  U.  S.  286,  51 
L.  ed.  488,  27  Sup.  Ct.  285." 

92  Texas  &  Pacific  Ry.  Co.  v.  Eastin  &  Knox,  214  U.  S.  153,  54  L.  ed.  946, 
30  Sup.  Ct.  564,  aff'g  100  Tex.  556. 

83  Chesapeake  &  Ohio  Ry.  Co.  v.  McCabe,  213  U.  S.  207,  29  Sup.  Ct.  430, 
53  L.  ed.  765. 

When  the  Federal  Supreme  Court  is  called  upon  to  exercise  its  own  judg- 
ment it  will  not  be  controlled  by  decisions  of  State  Courts.  Dunn,  Matter  of, 
212  U.  S.  374,  53  L.  ed.  558,  29  Sup.  Ct.  299;  Cochran  &  The  Fidelity  &  De- 
posit Co.  V.  Montgomery,  199  U.  S.  260,  26  Sup.  Ct.  58,  50  L.  ed.  178,  182. 

»4  Rev.  Stat.,  §  720. 

3r)9 


§  220  JURISDICTION   OF   COURTS 

against  whom  a  case  has  been  legally  removed  from  taking 
further  steps  in  the  State  Courts.^^  Where  a  petition  for  re- 
moval is  denied  and  the  petitioner  files  the  record  in  the  Cir- 
cuit Court  and  that  court  determines  for  itself  the  question  of 
removability  and  protects  its  jurisdiction  by  injunction  against 
further  proceedings  in  the  State  Court,  the  judgment  rendered 
by  the  Circuit  Court  under  such  conditions  is  not  void,  even 
if  jurisdiction  be  improperly  assumed  and  retained,  as  the 
jurisdictional  question  can  be  reviewed  by  the  Federal  Supreme 
Court,  and  until  reversed  it  is  binding  on  the  State  Court  and 
cannot  be  treated  as  a  nullity.''^  Where  the  State  Court  re- 
fuses to  remove  a  cause  to  the  Circuit  Court  and  afterwards 
on  filing  the  record  in  the  Circiiit  Court  that  court  remands 
the  cause  to  the  State  Court,  if  there  was  any  error  in  the  rul- 
ing of  the  State  Court  it  becomes  wholly  immaterial.^^ 

§  220.  Effect  Upon  Jurisdiction  of  State  Court  of  Re- 
moval of  Cause. 

When  the  proper  petition  for  removal  accompanied  by  a 
sufficient  bond  is  filed,  the  petitioner  is  entitled  to  an  order  for 
removal,  and  the  jurisdiction  of  the  State  Court  then  ceases 
except  for  the  purpose  of  passing  on  and  making  an  order  for 
removal.^*    And  when  the  petitioner  presents  to  the  State  Court 

95  Madisonville  Traction  Co.  v.  Saint  Bernard  Mining  Co.,  196  U.  S.  239, 
25  Sup.  Ct.  251,  49  L.  ed.  262. 

Injunction  not  granted  to  stay  proceedings  in  State  Courts,  except,  etc., 
"The  writ  of  injunction  shall  not  be  granted  by  any  court  of  the  United 
States  to  stay  proceedings  in  any  court  of  a  State,  except  in  cases  where 
such  injunction  may  be  authorized  by  any  law  relating  to  proceedings  in 
bankruptcy."  U.  S.  Rev.  Stat.,  §  720,  U.  S.  Comp.  Stat.,  1901,  p.  581, 
Act  of  March  2,  1793,  chap.  22,  §  5,  1  Stat.  334. 

86  Chesapeake  &  Ohio  Ry.  Co.  v.  McCabe,  213  U.  S.  207,  29  Sup.  Ct.  430, 
53  L.  ed.  564,  citing  Dowell  v.  Applegate,  152  U.  S.  327,  38  L.  ed.  463,  14 
Sup.  Ct.  611.  For  statement  of  the  facts  in  the  principal  case,  see  note  to 
that  case  in  §  204,  herein. 

97  Telluride  Power  Trans.  Co.  v.  Rio  Grande  Western  Ry.  Co.,  187  U.  S. 
569,  47  L.  ed.  307,  23  Sup.  Ct.  178. 

98  Philhps  V.  Western  Terra  Cotta  Co.  (U.  S.  C.  C),  174  Fed.  873.  The 
court,  per  Phillips,  Dist.  J.,  at  pp.  875,  876,  said:  "The  Supreme  Court,  with 
reiteration,  has  held  that  when  the  defendant  presents  to  the  State  Court 
his  petition  for  removal,  accompanied  with  the  required  bond,  praying  for 
removal  of  cause  into  the  Federal  Court,  if  the  petition  on  its  face  shows 

3fi0 


OVER  CORPORATIONS   CONTINUED  §  220 

a  sufficient  cause  for  removal  it  is  the  duty  of  that  court  to  pro- 
ceed no  further  in  the  suit.  The  jurisdiction  of  the  Circuit 
Court  then  attaches. ^^    In  other  words,  it  is  settled  as  to  re- 

the  facts  essential  to  entitle  the  defendant  to  such  removal,  the  only  ques- 
tion left  for  decision  by  the  State  court  is  whether  or  not,  taking  the  record 
then  before  it,  the  order  should  be  made.  If  the  petition  be  sufficient  and 
the  bond  be  given,  eo  instante  every  other  jurisdiction  of  the  State  Court 
ceases,  and  that  of  the  Federal  Court  attaches  over  the  parties  and  subject- 
matter.  '  The  State  Court  is  only  at  lil^erty  to  inquire  whether,  on  the  face 
of  the  record  (i.  e.,  the  petition  of  the  plaintiff  and  the  petition  for  removal) 
a  case  had  been  made  which  requires  it  to  proceed  no  further.  *  *  * 
With  that  fact  established,  the  necessary  citizenship  for  a  removal  existed. 
Whether  it  was  a  fact  or  not  could  only  be  tried  in  the  Circuit  Court.'  Car- 
son v.  Hyatt,  118  U.  S.  287,  6  Sup.  Ct.  1054,  30  L.  ed.  167.  'Upon  the 
filing  of  the  petition  and  bond,  the  suit  being  removable  under  the  statute, 
the  jurisdiction  of  the  State  Court  absolutely  ceased,  and  that  of  the  Circuit 
Court  of  the  United  States  immediately  attached.  The  duty  of  the  State 
Court  was  to  proceed  no  further  in  the  cause.  Every  order  thereafter  made 
in  that  court  was  coram  non  judice,  unless  its  jurisdiction  was  actually  re- 
stored.' Steamship  Co.  v.  Tugman,  106  U.  S.  122,  1  Sup.  Ct.  60,  27  L.  ed.  87; 
Crehore  v.  Ohio  &  Mississippi  Ry.  Co.,  131  U.  S.  244,  9  Sup.  Ct.  692,  33 
L.  ed.  144;  Stone  v.  South  Carolina,  117  U.  S.  432,  6  Sup.  Ct.  799,  29  L.  ed. 
962.  So  Judge  Sanborn,  in  Boatmen's  Bank  v.  Fritzlein,  135  Fed.  653, 
68  C.  C.  A.  291,  said:  'When  a  petition  for  removal  and  the  bond  required 
by  the  act  of  Congress  are  filed,  and  the  record  on  its  face  shows  the  right 
of  the  petitioner  to  a  removal,  the  jurisdiction  of  the  State  Court  ceases, 
and  that  of  the  Federal  Court  attaches.  If  issues  of  fact  arise  upon  the 
averments  of  the  petition  for  removal,  the  jurisdiction  to  try  them  is  in 
the  Federal  Court,  and  not  in  the  State  Court.'  In  Donovan  v.  Wells, 
Fargo  &  Co.  (U.  S.  C.  C.  A.),  169  Fed.  363,  the  court  again  said:  'On  the 
filing  of  a  removal  petition,  it  becomes  a  part  of  the  record,  and  if,  on  the 
face  of  the  record  as  so  constituted,  the  suit  appears  to  be  a  removable  one, 
the  State  Court  is  bound  to  surrender  jurisdiction.'  The  inevitable  corol- 
lary is  that  no  other  pleadings,  no  other  issues,  are  permissible  in  the  State 
Court  after  the  sufficient  petition  and  bond  are  presented  for  removal."  In 
this  case  the  petition  of  the  plaintiff  in  the  State  Court  was  silent  as  to  the 
citizenship  of  the  parties.  The  petition  of  the  defendant  for  removal,  sup- 
ported by  affidavit,  and  accompanied  with  sufficient  bond,  alleged  that  at 
the  time  of  bringing  suit,  and  since,  the  plaintiff  was  a  citizen  of  the  State 
of  Kansas,  and  the  defendant  was  a  citizen  of  the  State  of  Missouri.  When 
the  transcript  was  filed  in  the  Circuit  Court,  the  record  proper  on  its  face 
showed  the  requisite  jurisdictional  facts  to  authorize  the  Circuit  Court  to 
proceed  to  judgment.  In  this  state  of  the  record  the  plaintiff  filed  a  motion 
to  remand  and  filed  a  motion  to  set  aside  the  order  overruling  the  motion 
to  remand  the  cause  to  the  State  Court  and  for  rehearing,  which  was  denied. 

9a  Railroad  Co.  v.  Koontz,  104  U.  S.  5,  26  L.  ed.  643. 

A  defendant's  right  to  remove  to  the  Federal  Court  is  amply  protected. 

3m 


§  221  JURISDICTION    OF    COURTS 

moval  of  causes,  if  the  cause  be  a  removable  one,  that  is,  if  the 
suit  in  its  nature  be  one  of  which  the  Circuit  Court  could  right- 
fully take  jurisdiction,  then  upon  filing  a  petition  for  removal, 
in  due  time,  with  a  sufficient  bond,  the  case  is,  in  law,  removed, 
and  the  State  Court  in  which  it  is  pending  will  lose  jurisdic- 
tion to  proceed  further  and  all  subsequent  proceedings  in  that 
court  will  be  void.  But  if  upon  the  face  of  the  record,  includ- 
ing the  petition  for  removal,  a  suit  does  not  appear  to  be  a  re- 
movable one,  then  the  State  Court  is  not  bound  to  surrender 
its  jurisdiction,  and  may  proceed  as  if  no  application  for  re- 
moval had  been  made.^  Where  the  Federal  Circuit  Court 
takes  jurisdiction  and  protects  the  same  upon  its  determina- 
tion of  the  removability  of  a  cause,  where  the  State  Court  re- 
fuses to  make  the  removal  order,  a  final  judgment,  rendered 
by  and  under  such  conditions,  by  the  Circuit  Court,  cannot  be 
reviewed  by  the  State  Court  until  reversed  by  the  United 
States  Supreme  Court .^ 

§  221.  Jurisdiction  of  Federal  Supreme  Court  After 
Removal  Ordered  by  Circuit  Court. 

When  a  State  Court  refuses  permission  to  remove  to  a  Fed- 
eral Court  a  case  pending  before  the  State  Court,  and  the  Fed- 
eral Court  orders  its  removal,  the  United  States  Supreme  Court 
has  jurisdiction  to  determine  whether  there  was  error  on  the 
part  of  the  State  Court  in  retaining  the  case.^ 

He  may  file  his  record  in  the  Circuit  Court  and  thereby  completely  take 
jurisdiction  from  the  State  Court.  Texas  &  Pacific  Ry.  Co.  v.  Eastin  & 
Knox,  214  U.  S.  153,  5.3  L.  ed.  946,  29  Sup.  Ct.  564,  aff'd  100  Tex.  556. 

1  Madisonville  Traction  Co.  v.  Saint  Bernard  Mining  Co.,  196  U.  S.  239, 
49  L.  ed.  262,  25  Sup.  Ct.  251. 

2  Chesapeake  &  Ohio  Ry.  Co.  v.  McCabe,  213  U.  S.  207,  53  L.  ed.  765,  29 
Sup.  Ct.  430,  Mr.  Justice  McKenna  dissented.  For  statement  of  facts  in 
this  case,  see  note  89  to  §  217,  herein. 

3  Missouri,  Kansas  &  T.  Ry.  Co.  v.  Missouri  R.  &  W.  Comm'rs,  183  U.  S. 
53,  46  L.  ed.  78,  22  Sup.  Ct.  18. 


362 


PARTIES 


§222 


CHAPTER  XIV 


PARTIES 


226. 


227. 


222.  Preliminary  Statement. 

223.  Powers  of  Corporations  Gen- 

erally. 

224.  Corporation  as  Entity. 

225.  Corporation     as     Entity     — 

Equity. 
Directors  of  One  Corporation, 

Directors  of  Another  Does 

Not    Prevent    Suit    by    or 

Against — Merger. 
Corporations  May  Sue  and  Be 

Sued. 

228.  Corporations  as  Necessary  or 

Indispensable  Parties. 

229.  Same  Subject — Equity. 

230.  Corporation  as  Salvors  May 

Maintain  Suit  for  Salvage. 

231.  Power  of  Corporation  to  Sue 

and  Be  Sued  Includes  Power 
to  Arbitrate. 

232.  State   Bank   Converted    Into 

National    Bank — Right    to 
Sue  in  Former  Name. 

233.  Corporation's  Right  to  Sue — 

Waiver — Foreign   Corpora- 
tion. 


§  234.  When  Corporation  Not  Enti- 
tled to  Equitable  Considera- 
tion of  Courts — Consolida- 
tion to  Prevent  Competition 
— Fraud  on  Public. 

235.  Consolidation — Successor     of 

Corporation — Rights  of. 

236.  Foreign     Corporation  —  Par- 

ties. 

237.  Foreign  Corporation — Parties 

— Presumptions. 

238.  Right  of  Corporation  to  Sue 

as  Affected  by  Dissolution. 

239.  Same  Subject. 

240.  Same  Subject. 

241.  Injuries  to  Persons  in  Execu- 

tion of  Public  Trust — Rule 
as  to  When  Not  Applicable 
to  Private  Corporations. 

242.  Injuries    to    Property    Gen- 

erally. 

243.  Right    of   Consignor    to   Sue 

Corporation. 

244.  Suits  by  and  Against    Con- 

signees. 


§  222.  Preliminary  Statement. 

Logically  the  power  of  corporations  is  the  basis  of  their 
right  to  sue  and  be  sued  and  to  defend.  We  have  treated  of 
their  rights  and  remedies  generally;  and  particularly  under  the 
Constitution  which  is  necessarily  the  foundation  of  all  actions 
and  defenses.  In  what  follows  we  shall  only  treat  of  corpora- 
tions as  parties  in  a  general  way  because  there  are  compara- 
tively few  cases  in  which  corporations  stand  out  distinctively 
and  separate  from  the  general  rules  of  law. 

363 


§  223  PARTIES 

§  223.  Powers  of  Corporations  Generally. 

In  the  United  States  a  corporation  can  only  have  an  ex- 
istence under  the  express  laws  of  the  State  by  which  it  is 
created  and  can  exert  no  power  or  authority  which  is  not 
granted  to  it  by  the  charter  under  which  it  exists  or  by  some 
other  legislative  act.  If  a  corporation  is  organized  through 
articles  of  association  entered  into  under  general  laws,  the 
memorandum  of  association  stands  in  the  place  of  a  legisla- 
tive charter  in  so  far  that  its  powers  cannot  exceed  those 
enumerated  therein,  but  powers  enumerated  and  claimed 
therein  which  are  not  warranted  by  statute  are  void  for  want 
of  authority.^ 

A  corporation  has  only  such  power  as  is  conferred  upon  it 
expressly  or  by  impHcation  to  enable  it  to  carry  out  the  ob- 
jects of  its  creation.^ 

Again,  the  powers  of  a  corporation  are,  strictly  speaking, 
twofold:  those  that  are  derived  from  express  grant,  and  those 
that  are  incident  and  necessarily  appertain  to  it,  whether  ex- 
pressed in  the  grant  or  not.  In  modern  times,  it  has  been 
usual  to  embrace  all  these  incidental  powers  in  the  act  of  in- 
corporation, so  that  it  may  now  be  considered  a  general  rule, 
that  the  powers  of  a  corporation  are  regulated  and  defined  by 
the  act  which  gives  it  existence.  A  corporation  is  strictly 
limited  to  the  exercise  of  the  powers  specifically  conferred  upon 
it;  and  the  exercise  of  the  corporate  franchise  cannot  be  ex- 
tended beyond  the  letter  and  spirit  of  the  act  of  incorpora- 
tion.^ 

In  brief,  corporations  can  possess  and  exercise  only  those 
powers  which  are  expressly  conferred  or  which  are  necessarily 
implied,  essential  to  the  exercise  of  those  expressly  granted, 
incidental  and  necessary  to  carry  into  effect  the  purposes  for 
which  it  was  created.     Powers  incidental  or  supplemental  to 

1  Oregon  Ry.  &  Nav.  Co.  v.  Oregonian  Ry.  Co.,  130  U.  S.  1,  32  L.  ed.  837, 
9  Sup.  Ct.  409,  5  Rd.  &  Corp.  L.  J.  364. 

2  Bankers'  Union  v.  Crawford,  67  Kan.  449,  73  Pac.  79,  100  Am.  St. 
Rep.  465. 

3  Leggett  V.  New  Jersey  Manufacturing  &  Banking  Co.,  1  N.  J.  Eq.  541, 
23  Am.  Dec.  728. 

364 


PARTIES  §  223 

the  very  existence  of  the  corporation  are  such  as  are  best 
calculated  to  effect  the  object  for  which  they  were  granted; 
they  should  be  directly  and  immediately  appropriate  to  the 
execution  of  the  specific  powers  and  not  merely  those  which 
sustain  only  a  slight,  indirect  or  remote  relation  to  the  specific 
purposes  of  the  corporation."* 

4  United  States:  Horn  Silver  Min.  Co.  v.  New  York,  143  U.  S.  305,  36  L.  ed. 
164,  12  Sup.  Ct.  403  ("a  corporation  being  the  mere  creature  of  the  legis- 
lature, its  rights,  powers  and  privileges  are  dependent  solely  upon  the  terms 
of  its  charter."  Id.,  312,  per  Mr.  Justice  Field,  a  case  of  taxation  of  corporate 
franchises);  Thomas  v.  Railroad  Co.,  101  U.  S.  71,  25  L.  ed.  950  [(explained 
in  Oregon  Ry.  &  Nav.  Co.  v.  Oregonian  Ry.  Co.,  130  U.  S.  1,  32  L.  ed.  837, 
9  Sup.  Ct.  409).  The  power  of  a  corporation  organized  under  a  legislative 
charter  are  only  such  as  the  statute  confers;  and  the  enumeration  of  them 
implies  the  exclusion  of  all  others.  "  We  take  the  general  doctrine  to  be  in 
this  country,  though  there  may  be  exceptional  cases  and  some  authorities 
to  the  contrary,  that  the  powers  of  corporations  organized  under  legislative 
statutes  are  such  and  such  only  as  those  statutes  confer.  Conceding  the 
rule  applicable  to  all  statutes,  that  what  is  fairly  implied  is  as  much  granted 
as  what  is  expressed  it  remains  that  the  charter  of  a  corporation  is  the 
measure  of  its  powers,  and  that  the  enumeration  of  these  powers  implies 
the  exclusion  of  all  others."  Id.,  82,  per  Mr.  Justice  Miller];  Dartmouth 
College  V.  Woodward,  4  Wheat.  (17  U.  S.)  518,  4  L.  ed.  629  (a  corporation, 
"being  the  mere  creature  of  the  law,  it  possesses  only  those  properties  which 
the  charter  of  its  creation  confers  upon  it,  either  expressly,  or  as  incidental 
to  its  very  existence.  These  are  such  as  are  supposed  best  calculated  to 
effect  the  object  for  which  it  was  created."  Id.,  635,  per  Mr.  Chief  Jus- 
tice Marshall);  Cumberland  Teleph.  &  Teleg.  Co.  v.  Evanville  (U.  S.  C.  C), 
127  Fed.  187;  New  Albany  Water  Works  v.  Louisville  Bkg.  Co.  (U.  S.  C.  C. 
A.),  122  Fed.  776,  58  C.  C.  A.  576;  Sherman  v.  American  Congregational 
Assn.  (U.  S.  C.  C.  A.),  113  Fed.  609,  51  C.  C.  A.  529. 

Alabama:  Meyer  v.  Johnston,  53  Ala.  237  ("a  corporation,  being  a  creature 
of  the  legislative  enactment,  has  only  such  powers  and  capacity  as  it  is 
endowed  with  by  its  creator."    Id.,  324,  per  Manning,  J.). 

Georgia:  First  M.  E.  Church  v.  Atlanta,  76  Ga.  181. 

Illinois:  People  v.  Ilhnois  Cent.  Rd.  Co.,  233  111.  378,  84  N.  E.  368,  122 
Am.  St.  Rep.  181  (the  general  rule  is  that  corporations  may  exercise  those 
powers  expressly  given  and  such  others  as  are  necessary  to  carry  the  ex- 
press powers  into  effect.  A  power  which  the  law  may  regard  as  existing  by 
implication  must  be  one  in  a  sense  necessary,  needful  and  suitable  to  ac- 
complish the  objects  of  the  grant;  one  that  is  directly  and  immediately 
appropriate  to  the  execution  of  the  specific  powers  and  not  one  that  has 
but  a  slight,  indirect  or  remote  relation  to  the  specific  purposes  of  the 
corporation);  People,  Moloney,  v.  Pullman's  Palace  Car  Co.,  175  III.  125, 
51  N.  E.  664,  64  L.  R.  A.  366  {incidental  or  implied  powers  enable  a  corpora- 

365 


§  223  PARTIES 

Public  corporations'  powers  are  not  coextensive  with  those 
of  individuals  in  resi^ect  to  the  surrender  of  their  franchises  and 

tion  to  carry  in  effect  its  express  powers  to  accomplish  the  objects  for  which 
it  exists  but  cannot  enlarge  stick  express  powers  and  permit  it  to  engage  in 
enterprises  remotely  connected  with  its  specific  objects) ;  Chicago  Municipal 
Gas  Light  &  Fuel  Co.  v.  Town  of  Lake,  130  111.  42,  53,  22  N.  E.  616  (where 
a  private  corporation  is  organized  under  the  general  incorporation  law, 
the  franchises  conferred  by  the  State  when  it  was  organized  are  to  be  ascer- 
tained and  determined  from  the  objects  of  the  incorporation  as  stated  and 
set  forth  in  its  articles  of  incorporation.  And  although  the  statute  under 
which  it  was  organized  vests  it  with,  and  authorizes  it  to  exercise  all  the 
powers  necessary  and  requisite  to  carry  into  effect  the  objects  for  which 
it  was  formed,  nevertheless  the  general  powers  intended  by  the  enactment 
are  such  powers  only  as  are  necessarily  incident  and  supplemental  to  the 
special  powers  granted). 

Louisiana:  Milwaukee  Trust  Co.  v.  Germania  Ins.  Co.,  106  La.  669,  31  So. 
298;  State,  Jackson,  v.  Newman,  51  La.  Ann.  833,  25  So.  408,  10  Am.  & 
Eng.  Corp.  Cas.  (N.  S.)  217. 

Minnesota:  Fuller  Laundry  Co.,  In  re,  79  Minn.  414,  82  N.  W.  673. 

Missouri:  State,  Crow,  v.  Lincoln  Trust  Co.,  144  Mo.  562,  46  S.  W.  593. 

Nebraska:  Herrick  v.  Humphrey  Hardware  Co.,  73  Neb.  809,  103  N.  W. 
685,  119  Am.  St.  Rep.  917  (the  powers  of  a  corporation  in  effecting  its  ob- 
jects are  as  broad  and  comprehensive  as  those  of  an  individual,  unless 
expressly  prohibited) ;  Lees  v.  Atchison  &  N.  R.  Co.,  24  Neb.  143,  38  N.  W.  43. 

New  York:  Brooklyn  Heights  Rd.  Co.  v.  City  of  Brooklyn,  152  N.  Y. 
244  (what  powers  are  implied);  People  ex  rel.  Tiffany  v.  Campbell,  144 
N.  Y.  166  (what  powers  are  implied);  Jemison  v.  Citizens'  Sav.  Bk.,  122 
N.  Y.  135  (as  to  power  foreign  to  charter);  Sistare  v.  Best,  88  N.  Y.  527 
(as  to  contracts  within  apparent  scope  of  powers);  Curtis  v.  Leavett,  15 
N.  Y.  9  ["corporations,  I  admit  also,  can  only  exercise  the  powers  ex- 
pressly or  incidentally  conferred.  It  scarcely  needed  a  statute  of  this  State 
to  declare  a  principle  of  the  common  law  so  familiar;  and  there  is  nothing 
in  the  terms  of  the  statute  (1  Rev.  St.  600,  §  3)  quoted  with  so  much  em- 
phasis to  give  greater  intensity  to  the  doctrine."  Id.,  54,  per  Comstock,  J.]. 
See  McGraw,  In  re,  v.  Cornell  University,  10  N.  Y.  Supp.  495,  45  Hun,  354, 
and  cases  cited. 

Ohio:  Central  Ohio  Natural  Gas  &  F.  Co.  v.  Capital  City  Dairy  Co.,  60 
Ohio  St.  96,  63  N.  E.  711,  41  Ohio  L.  J.  312,  10  Am.  &  Eng.  Corp.  Cas.  (N.  S.) 
228,  64  L.  R.  A.  395. 

Oregon:  Beers  v.  Dallas,  16  Oreg.  334,  18  Pac.  835. 

Texas:  Ft.  Worth  St.  Rd.  Co.  v.  Rosedale  St.  Rd.  Co.,  68  Tex.  169,  4 
S.  W.  434;  Gulf,  Colorado  &  Santa  Fe  R.  Co.  v.  Morris,  67  Tex.  692,  4  S.  W. 
156. 

Utah:  Weyeth  Hardware  &  M.  Co.  v.  James-Spencer-Bateman  Co.,  15 
Utah,  110,  47  Pac.  604. 

Articles  of  incorporation  under  general  laws  have  the  effect  of  a  charter 
when  necessary  to  ascertain  the  extent  of  the  powers  conferred  upon  the 

366 


PARTIES  §  224 

the  delegation  of  their  duties  to  otliers;  an  individual  owns 
property  unaffected  by  a  necessity  to  use  it  in  the  performance 
of  duties  in  which  the  public  has  an  interest,  and  is  not  re- 
strained by  charter  limitations.^ 

§  224.  Corporation  as  Entity. 

A  corporation  is  an  entity  irrespective  of,  and  entirely  dis- 
tinct from,  the  persons  who  own  its  stock,  and  it  is  well  settled 
that  all  the  shares  in  a  corporation  may  be  held  by  a  single 
person  and  yet  the  corporation  continue  to  exist;  nor  does  the 
fact  that  one  person  owns  all  the  stock,  make  him  and  the 
corporation  one  and  the  same  person.  The  corporation  does 
not  lose  its  legally  distinct  and  separate  personaHty  by  reason 
of  the  ownership  of  the  bulk  or  whole  of  its  stock  by  another; 
nor  does  the  fact  that  all  the  shares  of  a  corporation  pass 
into  the  ownership  of  one  person,  operate  to  dissolve  the  cor- 
poration. It  is  also  immaterial  whether  the  sole  owner  of  stock 
is  a  man  or  another  corporation,  and  the  corporation  owning 
such  stock  is  as  distinct  from  the  corporation  whose  stock  is 
owned  as  the  man  is  from  the  corporation  of  which  he  is  the 
sole  member.^ 

corporation  so  organized.  North  Point  Consol.  Irrig.  Co.  v.  Utah  &  S.  L. 
Canal  Co.,  16  Utali,  246,  52  Pac.  168,  4  L.  R.  A.  851,  8  Am.  &  Eng.  Corp. 
Cas.  (N.  S.)  98.  See  also  Detroit  Driving  Club  v.  Fitzgerald,  109  Mich.  670, 
67  N.  W.  899,  4  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  546,  3  Det.  L.  N.  232;  Inter- 
national Boom  Co.  V.  Rainy  Lake  River  Boom  Corp.,  97  Minn.  513,  107 
N.  W.  735. 

Assignment  of  claim  for  damages  not  connected  with  corporation's  purposes 
of  incorporation  and  based  upon  a  claimed  conspiracy  to  defraud  is  not 
within  the  power  of  the  corporation  to  acquire.  John  V.  Farwell  Co.  v. 
Josephson,  96  Wis.  10,  70  N.  W.  289,  37  L.  R.  A.  138,  142,  71  N.  W.  109. 

Railroad  corporations  possess  only  those  rights,  powers  or  properties 
which  the  charters  of  such  corporations  confer  upon  them,  either  expressly 
or  as  incidental  to  their  existence  and  this  applies  to  all  other  corporations. 
St.  Louis,  Iron  Mountain  &  Southern  Ry.  Co.  v.  Paul,  64  Ark.  83,  40  S.  W. 
705,  62  Am.  St.  Rep.  154,  37  L.  R.  A.  504. 

5  Southern  Electric  Securities  Co.  v.  State,  91  Miss.  195,  44  So.  785. 

6  Commonwealth  v.  Monongahela  Bridge  Co.,  216  Pa.  St.  108,  114,  115,  64 
Atl.  909,  per  Potter,  J.,  citing  or  quoting  Exchange  Bank  of  Macon  v. 
Mason  Construction  Co.,  97  Ga.  1,  6,  25  S.  E.  326;  Kendall  v.  Klapperthal 
Co.,  202  Pa.  596,  607,  52  Atl.  92;  Rhawn  v.  Edge  Hill  Furnace  Co.,  201 

367 


§  224  PARTIES 

It  is  also  held  that  a  corporation  is  an  entity,  irrespective 
of  the  persons  who  own  all  of  its  stock;  that  the  fact  that  one 
person  owns  all  the  stock  does  not  make  such  owner  and  the 
corporation  one  and  the  same  person;  and  that  there  is  not  any 
identity  between  the  individual  or  the  corporation  which  owns 
such  stock  in  another  corporation,  and  that  latter  corporation.^ 

Pa.  637,  51  Atl.  360;  Monongahela  Bridge  Co.  v.  Pittsburg  &  Birmingham 
Traction  Co.,  196  Pa.  25,  46  Atl.  99,  10  Cyc.  1277. 

7  Ulmer  v.  Lime  Rock  R.  Co.,  98  Me.  579,  57  Atl.  1001. 

As  to  corporation  being  entity  distinct  from  stockholders,  see  the  following 
cases: 

United  States:  Central  Trust  Co.  of  N.  Y.  v.  Western  North  Carolina  Rd. 
Co.,  89  Fed.  31,  per  Simonton,  Cir.  J.  ("  this  sovereign  power  made  of  several 
persons  a  single  entity  ") ;  M'Cabe  v.  Illinois  Central  Rd.  Co.,  13  Fed.  827, 
828  (is  a  legal  entity,  per  Love,  D.  J.). 

Alabama:  State  v.  Stebbins,  1  Stew.  (Ala.)  209,  306-308  [per  Saffold,  J., 
citing  Bank  of  United  States  v.  Dandridge,  12  Wheat.  (25  U.  S.)  91,  per 
Marshall,  C.  J.,  to  point  that  it  is  one  entire  impersonal  entity]. 

Illinois:  Ford  v.  Chicago  Milk  Shippers'  Assoc,  155  111.  166,  39  N.  E. 
651,  27  L.  R.  A.  298  (while  legal  entity  and  distinct  from  persons  composing 
it,  it  cannot  act  independently  of  natural  persons  constituting  it,  per 
Phillips,  J.). 

Kentucky:  Lewis  v.  Maysville  &  Big  Sandy  Rd.  Co.,  25  Ky.  L.  Rep.  948, 
70  S.  W.  526  (when  statute  refers  to  entity  and  not  to  individual  stock- 
holder's right  of  removal  to  Federal  Court,  cannot  be  defeated  on  ground 
that  corporation  not  a  legal  entity). 

Maryland:  Folsom  v.  Detrick  Fertilizer  &  Chemical  Co.,  85  Md.  52,  69, 
36  Atl.  446  (corporation  is  person  distinct  from  stockholders,  per  Bryan,  J.). 

Nebraska:  Home  Fire  Insurance  Co.  v.  Barber,  67  Neb.  644,  666,  93 
N.  W.  1024  (stating  when  separate  and  distinct  in  law  and  when  not  in 
equity,  per  Pound,  C). 

New  York:  Buffalo  Loan,  Trust  &  Safe  Deposit  Co.  v.  Medina  Gas  & 
Elec.  Light  Co.,  42  N.  Y.  Supp.  781,  788,  12  App.  Div.  199  (word  "entity" 
is  merely  descriptive  but  cannot  act  independently  of  persons  composing 
it,  per  Green,  J.);  People  v.  North  River  Sugar  Refining  Co.,  3  N.  Y.  Supp. 
401,  408,  16  Civ.  Proc.  R.  1,  2  L.  R.  A.  33  (is  not  in  reahty  distinct,  although 
in  one  point  of  view  an  entity,  per  Barrett,  J.) ;  Supervisors  of  Niagara  v. 
People,  7  Hill  (N.  Y.),  504,  507  (individuality  of  natural  persons  is  merged 
in  entity,  per  Bockee,  Senator). 

Pennsylvania:  Rhawn  v.  Edge  Hill  Furnace  Co.,  201  Pa.  637,  51  Atl.  360 
(is  an  entity  irrespective  of  persons  owning  stock) ;  Monongahela  Bridge  Co. 
V.  Pittsburg  &  Birmingham  Traction  Co.,  196  Pa.  St.  25,  46  Atl.  99  (same 
statement  as  last  case). 

South  Carolina:  State  v.  Hood,  15  Rich.  L.  (S.  C.)  177,  188  (corporation 
is  wholly  distinct  from  natural  persons  composing  it,  per  Inghs,  J.). 

368 


PARTIES  §  225 

The  distinction  between  the  conduct  of  a  corporation  and 
of  its  stockholders  is  important  and  controls  as  to  questions 
between  the  corporation  and  its  stockholders,  and  between  the 
corporation,  or  its  stockholders,  and  third  persons.  This  dis- 
tinction, however,  is  introduced  for  convenience  and  to  subserve 
the  ends  of  justice;  but  when  invoked  in  support  of  an  end 
subversive  of  its  poHcy  should  be  and  is  disregarded  by  the 
courts.^ 

Where  a  corporation  is  proceeding  at  law,  or  where  it  is 
asserting  a  title  to  property,  or  the  title  to  property  is  involved 
the  corporation  is  regarded  as  a  person  separate  and  distinct 
from  its  stockholders  or  any  or  all  of  them.  But  where  it  is 
proceeding  in  equity  to  assert  rights  of  an  equitable  nature, 
or  is  seeking  relief,  upon  rules  and  principles  of  equity,  the 
court  of  equity  will  not  forget  that  the  stockholders  are  the 
real  and  substantial  beneficiaries  of  a  recovery,  and  if  the 
stockholders  have  no  standing  in  equity,  and  are  not  equitably 
entitled  to  the  remedy  sought  to  be  enforced  by  the  corpora- 
tion in  their  behalf  and  for  their  advantage,  the  corporation 
will  not  be  permitted  to  recover.^ 

§  225.  Corporation  as  Entity — Equity. 

The  doctrine  of  corporate  entity  is  not  so  sacred  that  a  court 
of  equity,  looking  through  forms  to  the  substance  of  things, 

Tennessee:  City  of  Nashville  v.  Ward,  16  Lea  (84  Tenn.),  27,  30  (is  not 
distinct,  per  Deaderick,  C.  J.). 

8  Southern  Electric  Securities  Co.  v.  State,  91  Miss.  195,  207,  44  So.  785, 
per  Calhoun,  J.,  citing  People  v.  North  River  Refining  Co.,  3  N.  Y.  Supp. 
401,  7  N.  Y.  Supp.  406,  54  Hun,  354,  2  L.  R.  A.  33,  5  L.  R.  A.  386;  State 
V.  Standard  Oil  Co.,  49  Ohio  St.  137,  30  N.  E.  279,  15  L.  R.  A.  145,  34 
Am.  St.  Rep.  541. 

In  Doctor  v.  Harrington,  196  U.  S.  579,  586,  49  L.  ed.  606,  25  Sup.  Ct. 
355,  the  court,  per  McKenna,  J.,  in  discussing  the  question  of  jurisdiction, 
and  diversity  of  citizenship  for  the  purpose  thereof,  makes  a  distinction 
between  the  corporation  as  such  and  its  stockholders,  and  merely  states  in 
this  connection  that  a  corporation  has  rights  and  obligations  separate  from 
the  stockholders  and  can  sue  and  be  sued. 

9  Home  Fire  Ins.  Co.  v.  Barber,  67  Neb.  644,  108  Am.  St.  Rep.  716,  93 
N.  W.  1024,  considering  many  authorities. 

24  369 


§  226  PARTIES 

may  not,  in  a  proper  case,  ignore  it  to  preserve  the  rights  of 
innocent  parties  or  to  circumvent  fraud.^° 

§  226.  Directors  of  One  Corporation,  Directors  of  An- 
other, Does  Not  Prevent  Suit  by  or  Against— Merger. 

Although  there  is  a  comminghng  of  officers  of  two  corpora- 
tions, as  when  some  of  the  directors  of  one  corporation  are 
directors  of  another,  still  it  does  not  prevent  them  from  being 
distinct  corporations,  with  a  right  to  contract  with  each  other 
in  their  corporate  capacities,  and  to  sue  and  be  sued  by  each 
other  in  regard  to  such  contracts,  where  the  relations  of  the 
parties  have  not  been  abused.^^  The  fact  that  the  stockholders 
of  two  separately  chartered  corporations  are  identical,  that 
one  owns  shares  in  another,  and  that  they  have  mutual  deal- 
ings, will  not,  as  a  general  rule,  merge  them  into  one  corpora- 
tion or  prevent  the  enforcement  against  the  insolvent  estate 

10  Rieger.  Kapner  &  Atlmark,  In  re,  157  Fed.  609,  19  Am.  B.  Rep.  622. 
538.  The  court,  per  Sater,  Dist.  J.  (p.  629),  cites  First  National  Bank  of 
Chicago  V.  Trebein  Co.,  59  Ohio  St.  316,  52  N.  E.  834,  and  the  following  is 
a  part  of  the  quotation  in  the  said  case,  given  by  the  court:  "In  contem- 
plation of  law,  a  corporation  is  a  legal  entity,  an  ideal  person,  separate  from 
the  real  persons,  who  compose  it.  This  fiction,  however,  is  limited  to  the 
uses  and  purposes  for  which  it  was  adopted — convenience  in  the  transaction 
of  business,  and  in  suing  and  being  sued  in  its  corporate  name,  and  the 
continuance  of  its  rights  and  liabilities,  unaffected  by  changes  in  its  corporate 
members.  But  the  fiction  cannot  be  abusetl.  A  corporation  cannot  be  formed 
for  the  purpose  of  accomplishing  a  fraud  or  other  illegal  act  under  the  dis- 
guise of  the  fiction."  The  court  in  the  principal  case  cites  also  the  follow- 
ing authorities:  Cincinnati,  Volksblatt  Co.  v.  Hoffmeister,  62  Ohio  St.  189, 
200,  56  N.  E.  1033,  48  L.  R.  A.  732,  78  Am.  St.  Rep.  707;  State  v.  Standard 
Oil  Co.,  49  Ohio  St.  137,  177-179,  30  N.  E.  279,  15  L.  R.  A.  145,  34  Am. 
St.  Rep.  541;  Brundred  v.  Rice,  49  Ohio  St.  640,  32  N.  E.  169,  34  St.  Rep. 
589;  Thompson  on  Corp.,  §  1077p;  Cook  on  Corp.  (4th  ed.)  23;  7  Am.  &  Eng. 
Ency.  of  Law,  633,  634.  See  also  United  States  v.  Milwaukee  Refrigerator 
Co.,  142  Fed.  247  (holding  corporation  a  legal  entity  as  a  general  rule,  but 
will  be  regarded  in  law  as  an  association  of  persons  under  certain  circum- 
stances) . 

11  Pauly  V.  Pauly,  107  Cal.  8,  48  Am.  St.  Rep.  98,  citing  and  quoting 
from  Leavenworth  v.  Chicago,  Rock  Island  &  Pac.  Ry.  Co.,  134  U.  S.  688, 
707,  33  L.  ed.  1064,  10  Sup.  Ct.  708  (a  case  where  a  foreclosure  of  a  mort- 
gage on  a  railroad,  and  its  sale  under  a  decree,  was  held  valid,  in  a  suit 
attacking  them  for  fraud,  because  of  the  trust  relations  of  the  parties,  when 
there  was  no  collusion  or  fraud  in  fact). 

370 


PARTIES  §  227 

of  the  one  of  an  otherwise  vaHd  claim  of  the  other.  It  is  an 
elementary  and  fundamental  principle  ^^  that  a  corporation  is 
an  entity  separate  and  distinct  from  its  stockholders  and  from 
other  corporations  with  which  it  may  be  connccted.^^ 

§  227.  Corporations  May  Sue  and  Be  Sued. 

As  stated  in  a  preceding  section  there  arc,  independently  of 
any  express  powers,  certain  incidental  or  implied  powers 
possessed  by  corporations  the  exercise  of  which  are  necessary 
to  enable  them  to  effect  the  purposes  for  which  they  were 
created,  and  among  these  incidental,  impHed  and  necessary 
powers  is  that  of  the  common-law  right  to  sue  and  be  sued, 
plead  and  be  impleaded,  in  the  absence  of  some  special  statu- 
tory restriction  or  prohibition,  and  in  the  several  States  there 
are  also  provisions  under  Constitutions  and  statutes  empower- 
ing suits  to  be  brought  and  maintained  by  and  against  corpo- 
rations, or  to  sue  and  be  sued  in  their  corporate  name,  or  to 
maintain  and  defend  judicial  proceedings,  etc.^"^    So  a  power 

12  Watertown  Paper  Co.,  In  re,  169  Fed.  (C.  C.  A.)  252. 

13  That  corporation  an  entity,  see  Dec.  Dig.  Corp.,  §  378. 

14  UnUed  States:  Railroad  Co.  v.  Harris,  12  Wall.  (79  U.  S.)  65,  20  L.  ed. 
354  ("a  corporation  is  in  law,  for  civil  purposes,  deemed  a  person.  It  may 
sue  and  be  sued."  Id.,  81,  per  Mr.  Justice  Swayne,  in  discussing  the  right 
to  sue  a  railroad  corporation  in  Virginia,  for  injuries  done  there  said  corpora- 
tion having  been  chartered  in  Maryland  and  thereafter  having  its  charter 
confirmed  in  Virginia);  Bank  of  United  States  v.  Dandridge,  12  Wheat. 
(25  U.  S.)  64,  6  L.  ed.  552  ("to  corporations,  however  erected,  there  may 
be  said  to  be  certain  incidents  attached,  without  any  express  words  or 
authority  for  this  purpose,  such  as  the  power  to  plead  and  be  impleaded." 
Id.,  67,  per  Mr.  Justice  Story,  in  discussing  the  acts  of  aggregate  corpora- 
tions at  the  common  law);  Falconer  v.  Campbell,  2  McLean  (U.  S.  C.  C), 
195,  198  (the  court  declares  that  the  power  "  to  sue  and  be  sued  "  is  among 
"the  ordinary  powers  of  a  corporation,"  but  the  action  was  against  the 
directors  of  a  bank  to  recover  the  amount  of  a  bill  of  exchange  drawn  by 
the  bank,  which  was  incorporated  under  a  statute  giving  it  the  power  to 
sue  and  be  sued,  plead  and  be  impleaded,  etc.). 

Alabama:  Planters'  &  Merchants'  Bk.  of  Mobile  v.  Andrews,  8  Port.  (Ala.) 
404  (the  incidental  power  and  liability  of  suing  and  being  sued  appertains 
to  all  corporations,  even  at  common  law,  unless  taken  away  by  positive 
enactment.  Id.,  425,  per  Collier,  C.  J.,  in  discussing  the  authority  to  per- 
form by  agents,  services  incident  to  the  commencement  and  prosecution  of 
suits). 

371 


§  227  PARTIES 

given  to  a  corporation  "to  receive,  hold  and  manage"  a  fund, 
implies  the  power  to  sue  for  it.^^  It  is  also  well  settled  that  a 
corporation  represents  the  stockholders  in  all  matters  within 

Arkansas:  See  Rogers  v.  Galloway  Female  College,  64  Ark.  627,  44  S.  W. 
454,  39  L.  R.  A.  636  (as  to  college  established  by  church  standing  in  loco 
ecclesire  as  to  right  to  sue). 

Colorado:  Breene  v.  Merchants'  &  Mechanics'  Bk.,  11  Colo.  97,  17  Pac. 
281  (under  the  laws  corporations  may  sue  and  be  sued  as  individuals). 

Illimis:  Marsh  v.  Astoria  Lodge,  27  111.  (Peck.)  421  (if  right  to  sue  is  not 
expressly  granted,  corporation  may  still  exercise  the  faculty,  if  all  the 
powers  incident  to  corporations  are  conferred  upon  it);  Estell  v.  Knights- 
town  &  Middletown  Turnpike  Co.,  41  Ind.  174  (legal  capacity  to  sue  is  one 
of  the  capacities  of  ever\-  corporation). 

Maryland:  McKim  v.  Odom,  3  Bland's  Ch.  (Md.)  407  (is  an  incident  to 
bodies  politic  of  all  descriptions.    Id.,  419,  per  Bland,  Ch.). 

New  Hampshire:  Libbey  v.  Hodgdon,  9  N.  H.  394  ("there  seems  to  be 
nothing  in  the  character  of  a  corporation  to  prevent  its  suing  and  being  sued 
like  a  natural  person.  It  is,  in  legal  contemplation,  a  person,  having  exist- 
ence, invested  with  rights,  and  subjected  to  Habilities;  and  very  properly  a 
party  to  proceedings  in  courts  of  law  or  equity,  whenever  these  rights  and 
liabilities  are  drawn  in  controversy."  Id.,  396,  per  Willcox,  J.,  in  discussing 
right  to  sue  foreign  corporation  in  State). 

New  .Jersey:  M.  B.  Faxon  Co.  v.  Lovett  Co.,  60  N.  J.  L.  128,  30  Atl.  602, 
6  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  497  (foreign  corporations  expressly  authorized 
by  statute  to  sue  in  State  on  contracts  irrespective  of  where  made) ;  Leggett 
V.  New  Jersey  Mfg.  &  Bkg.  Co.,  1  N.  J.  Eq.  541,  23  Am.  Dec.  728  (right  to 
sue  and  be  sued  incident  to  every  corporation). 

New  York:  Thomas  v.  Dakin,  22  Wend.  (N.  Y.)  9  ("the  'franchises  and 
liberties,'  or  in  more  modern  language,  and  as  more  strictly  applicable  to 
private  corporations,  the  powers  and  faculties  which  are  usually  specified  as 
creating  corporate  existence  are:  *  *  *  1.  The  power  to  sue  and  be 
sued.  *  *  *  These  indicia  were  given  by  judges  and  elementary 
writers  at  a  very  early  day.  *  *  *  We  may,  in  short,  conclude  by  say- 
ing, with  the  most  approved  authorities  at  this  day,  that  the  essence  of  a 
corporation  consists  in  a  capacity;  *  *  *  2.  To  *  *  *  sue  and 
be  sued  by  its  corporate  name  as  an  individual."  Id.,  70,  71,  per  Nelson,  C.  J. ; 
Id.,  98,  per  Cowen,  J.  A  case  where  an  action  was  brought  by  plaintiff  as 
president  of  a  bank,  an  association  formed  under  the  general  banking  law 
of  1838  to  recover  in  assumpsit  demands  or  debts  due  the  institution  as  a 
bank  and  not  to  the  members  of  the  association  jointly) ;  Clarrisey  v.  Metro- 
politan Fire  Department,  7  Abb.  Prac.  N.  S.  (N.  Y.)  352  (bodies  created  by 
the  legislature  have  an  incidental  capacity  to  sue  and  be  sued,  independently 
of  any  express  power;  and  for  such  purposes  are  to  be  regarded  as  corpora- 
tions sub  modo). 

Oregon:  Capital  Lumbering  Co.  v.  Learned,  36  Oreg.  544,  50  Pac.  454, 

15  Proprietors  of  White  School  House  v.  Port,  31  Conn.  242. 

872 


PARTIES  §  227 

the  scope  of  its  corporate  powers  transacted  in  good  faith  by 
the  officers  of  the  corporation;  and  this  applies  to  the  con- 
ceded powers  of  corporations  in  bringing  and  defending  ac- 

78  Am.  St.  Rep.  792  ("the  rule  is  well  settled  that,  notwithstanding  a 
corporation  may  have  been  created  for  the  transaction  of  certain  business, 
which  is  specified  in  the  articles  of  incorporation,  it  may  invoke  any  legal 
or  equitable  remedy  which  would  be  available  to  an  individual  under  similar 
circumstances.  1  Morawitz,  Priv.  Corp.  357.  The  right  of  a  corporation 
to  sue  is  a  necessary  incident  to  its  creation,  and  whatever  its  business  may 
be,  any  right  of  action  which  necessarily  arises  therefrom  will  receive  the 
consideration  of  a  court  to  which  it  may  apply  for  relief."  Id.,  549,  per 
Moore,  J.);  Grant  County  v.  Lake  County,  17  Oreg.  453  (creating  a  corpora- 
tion for  any  purpose  impliedly  confers  upon  it  the  incidental  power  to  sue 
and  be  sued.  The  point,  however,  in  this  case  was  that  a  county  could  not 
be  sued  at  law  except  as  provided  by  statute). 

Tennessee:  Jonesboro  v.  M'Kee,  2  Yerg.  (10  Tenn.)  167  (some  powers  are 
incident  to  a  corporation,  although  not  expressly  given,  as  to  sue  and  be 
sued,  etc.). 

"The  power  of  a  corporation  to  sue  is  *  *  *  one  of  its  incidental 
powers,  although  it  is  most  generally  expressly  given  in  charters  to  private 
corporations."  And  "it  is  very  obvious  that  a  corporation  would  be  en- 
tirely incapacitated  to  manage  its  concerns  and  to  carry  into  effect  the 
objects  for  which  it  is  constituted  if  it  had  not  the  capacity  of  protecting  its 
rights  and  enforcing  the  just  claims  in  its  favor  by  ordinary  judicial  process." 
Angell  &  Ames  on  Corp.  (9th  ed.),  §  369.  "A  corporation  is  a  creature  of 
the  charter  that  constitutes  and  gives  it  being,  and  prescribes  bounds  and 
limits  to  its  operations,  beyond  which  it  cannot  regularly  proceed ;  yet  there 
are  some  things,  incident  to  a  corporation,  which  it  may  do  without  any 
express  provision  in  the  act  of  incorporating  "  and  "  it  is  incident  to  sue  and 
be  sued."  2  Bacon's  Abridg.  (ed.  1860),  "Corporations,"  pp.  445,  446  and 
note.  "  After  a  corporation  is  formed  and  named,  it  acquires  many  powers, 
rights,  capacities,  and  incapacities.  *  *  *  Some  of  these  are  neces- 
sarily and  inseparably  incident  to  every  corporation;  which  incidents  as  soon 
as  a  corporation  is  duly  erected,  are  tacitly  annexed  of  course,  *  *  * 
(2)  to  sue  and  be  sued  plead  and  be  impleaded,  *  *  *  by  j^g  corporate 
name."  1  Blackstone,  Comm.  475  (Hammond's  ed.,  830)  (Lewis's  ed., 
bot.  p.  453)  (Wendell's  ed.,  475);  3  Stephens'  Comm.  (ed.  1845),  175. 
"  It  is  usual,  however,  in  the  United  States  by  the  charter  or  act  of  in- 
corporation to  enable  this  body  politic  to  sue  and  be  sued."  1  Dane's 
Abridg.  (ed.  1823),  chap.  22,  p.  460;  5  Id.,  chap.  143,  p.  144.  "Corporations 
have  a  capacity  to  sue  and  be  sued  by  their  corporate  name  "  and  "  private 
moneyed  corporations  are  not  only  liable  to  be  sued  like  private  individuals 
in  assumpsit  for  breaches  of  contract,  but  they  may  be  sued  by  special  action 
on  the  case  for  neglect  and  malfeasance  and  breaches  of  duty,  and  in  actions 
of  trespass  and  trover  for  damages  resulting  from  trespass  and  torts  com- 
mitted by  their  agents  under  their  authority;  and  the  authority  of  such 

373 


§  228  PARTIES 

tions  concerning  the  rights  and  obligations  of  the  corporation.^''' 
A  corporation  must,  however,  be  sued  in  the  mode  prescribed 
by  the  legislature.^^  So  a  corporation  organized  for  the  pur- 
pose and  engaged  in  the  business  of  operating  a  machine  shop 
for  the  construction  and  repair  of  machinery,  clearly  has  ca- 
pacity to  sue  for  work  performed  in  its  capacity  as  a  machin- 
ist.^* But  corporation  rights  and  interest  in  law  and  equity, 
wrongfully  and  injuriously  affected,  must,  unless  some  special 
ground  be  shown,  be  generally  asserted  by  defendant  in  its 
corporate  name.^^ 

A  corporation  cannot  be  sued  without  its  consent  outside 
of  the  parish  of  its  domicile  on  an  implied  promise  to  pay  the 
liabilities  of  a  commercial  firm.^° 

§  228.  Corporations  as  Necessary  or  Indispensable  Parties. 

Corporations  are  indispensable  parties  to  a  bill  which  affects 
corporate  rights  or  liabilities.^^    So  in  an  action  in  a  Federal 

agents  need  not  be  under  seal."  2  Kent's  Comm.  (13th  ed.)  *284,  bot. 
p.  379.  "  When  a  corporation  is  duly  created  all  other  incidents  are  tacitly 
annexed."  "It  is  an  incident  to  sue  and  be  sued,  plead  and  be  impleaded." 
6  Viners'  Abridg.  (2d  ed.,  1792),  "Corporations,"  "g,"  p.  265  and  note. 

16  Singer  v.  Hutchinson,  183  III.  606,  613,  75  Am.  St.  Rep.  132. 

17  Holgate  V.  Oregon  Pac.  R.  Co.,  16  Oreg.  12.3,  17  Pac.  859. 

18  Pacific  Iron  &  Steel  Works  v.  Goerig  (Wash.,  1909),  104  Pac.  151,  In 
this  case  the  contention  that  the  corporation  had  no  legal  capacity  to  sue 
was  founded  on  .the  wording  of  a  statute  authorizing  the  filing  of  liens;  it 
being  thought  that  the  classification  of  the  persons  authorized  to  take 
advantage  of  the  statute  was  not  broad  enough  to  include  the  corporation 
(respondent).  But  whether  or  not  it  could  claim  a  lien  was  declared  not 
to  be  a  material  question.  "In  this  proceeding  it  was  not  allowed  a  lien 
thereunder,"  per  Fullerton,  J.    ' 

19  Bradley  v.  Richardson,  2  Blatchf.  (U.  S.  C.  C.)  343,  Fed.  Cas.  No.  1,786. 

20  Police  Jury  Parish  of  Iberville  v.  Texas  &  Pacific  Ry.  Co.,  122  La.  388, 
47  So.  692.  A  case  of  an  action  to  recover  damages  for  the  destruction  by 
fire  of  a  parish  bridge  alleged  to  have  been  occasioned  by  the  negligence  of 
defendant  railway  and  a  "firm."  A  third  defendant,  an  oil  corporation, 
was  sought  to  be  held  liable  as  having  assumed  the  said  commercial  firm's 
obligations  and  liabilities  by  taking  over  its  property  and  rights.  The  oil 
company  was  a  foreign  corporation  with  a  local  domicile  in  another  parish 
than  that  of  Iberville. 

21  Swan  Land  &  Cattle  Co.  v.  Frank,  148  U.  S.  603,  37  L.  ed.  577,  13  Sup. 
Ct.  691. 

374 


PARTIES  §  229 

Court  in  Pennsylvania,  brought  against  Pennsylvania  stock- 
holders of  an  insolvent  foreign  corporation  under  the  laws  of 
the  foreign  State  the  corporation  is  an  indispensable  party  de- 
fendant .^^ 

§229.  Same  Subject— Equity. 

All  persons  materially  int(;rested  in  the  subject  of  a  suit  in 
chancery,  ought  to  be  made  parties,  either  plaintiffs  or  defend- 
ants; but  this  is  a  rule  established  for  the  convenient  admin- 
istration of  justice,  and  is  more  or  less  within  the  discretion 
of  the  court;  and  it  should  be  restricted  to  parties  whose  in- 
terests are  in  the  issue,  and  to  be  affected  by  the  decree;  the 
relief  granted,  will  always  be  so  modified,  as  not  to  affect  the 
interests  of  others.^^  Again,  persons  or  corporations  interested 
must  be  made  parties  to  a  bill  in  equity  for  an  injunction,  es- 
pecially where  the  object  of  the  bill  cannot  be  attained  without 
seriously  affecting  the  interests  of  such  persons  or  corporations.^^ 

The  proposition,  that  to  a  shareholder's  suit  to  enforce  a 
corporate  right  in  protection  of  their  equitable  interest  in  the 
corporate  assets  the  corporation  is  a  necessary  party,  has  been 
approved  and  followed  in  numerous  cases.  Such  corporation 
is  said  to  be  a  necessary  party  because  its  rights  are  involved 
in  the  litigation  which  would  necessarily  be  fruitless  unless 
the  corporation  and  the  stockholders  represented  by  it  other 
than  the  plaintiffs,  are  bound  thereby .^^ 

Some  text-writers  and  some  cases  go  farther  and  hold  such 
corporation  to  be  an  indispensable  party,  not  simply  on  the 
general  principles  of  equity  pleading,  in  order  that  it  may  be 
bound  by  the  decree,  but  in  order  that  the  relief  when  granted 
may  be  awarded  to  it,  as  a  party  to  the  record,  by  the  decree;  ^^ 

22  Elkhart  Nat.  Bank  v.  Northwestern  Guaranty  Loan  Co.  (U.  S.  C.  C), 
84  Fed.  76,  7  Pa.  Dist.  Rep.  13,  287. 

23  Mechanics'  Bank  v.  Seton,  1  Pet.  (26  U.  S.)  299,  7  L.  ed.  152. 

24  Northern  Indiana  Rd.  Co.  v.  Michigan  Cent.  Rd.,  5  McLean  (U.  S.  C.  C), 
444,  Fed.  Cas.  No.  10,321. 

25  Citing  March  v.  Railroad,  40  N.  H.  548,  568;  Davenport  v.  Dows,  18 
Wall.  626;  Bagshaw  v.  Railway,  7  Hare,  114,  131;  Cook,  Stock  and  Stock- 
holders, §  692. 

28  Citing  3  Pomeroy's  Equity  Jurisprudence,  §  1095. 

375 


§  229  PARTIES 

or,  as  it  is  otherwise  expressed,  because  the  rehef  asked  for 
"must  be  worked  out  by  or  through"  the  corporation.^^ 

If  the  rehef  sought  requires  a  personal  judgment  against 
the  corporation  the  principle  is  well  stated  in  this  manner, 
though  as  thus  broadly  put  it  is  not  sustained  by  all  the  au- 
thorities. The  ground  generally  stated  is  the  necessity  that 
the  corporation  should  be  bound  by  the  judgment. ^^ 

There  is  a  well-defined  distinction  between  necessary  and 
proper  parties  defendant  in  suits  in  equity,  and  in  New  York 
where  a  complete  determination  of  the  controversy  cannot  be 
had  without  the  presence  of  other  parties,  the  court  should  di- 
rect them  to  be  brought  in  pursuant  to  §  452  of  the  Code  of  Civil 
Procedure,  and  it  is  error  for  the  court  to  proceed  to  judgment 
in  the  absence  of  such  necessary  parties  although  no  objection 
has  been  previously  taken.  As  a  corollary  to  the  rule  afore- 
said, where  a  complaint  in  equity  discloses  that  certain  of  the 
defendants  are  proper  parties,  although  possibly  not  necessary 
parties,  the  proper  party  defendant  as  distinguished  from  a  nec- 
essary party  is  not  entitled  to  test  the  complaint  by  the  strict 
rules  of  demurrer .^^ 

Although,  in  general,  a  bill  in  chancery  will  not  be  dismissed 
for  want  of  proper  parties,  the  rule  resting  as  it  does  upon  the 
supposition  that  the  fault  may  be  remedied,  and  the  necessary 
parties  supphed,  does  not  apply  when  this  is  impossible,  and 
whenever  a  decree  cannot  be  made  without  prejudice  to  one 
not  a  party.  In  such  a  case  the  bill  must  be  dismissed.  Hence, 
in  a  case  where,  if  all  the  partners  were  made  parties  to  the 
bill,  the  court  in  which  the  bill  was  filed  would,  from  the  char- 
acter of  its  jurisdiction  (which  was  confined  to  persons  resi- 
dent within  particular  districts,  which  one  of  the  partners 
here  was  not),  be  without  any  jurisdiction  of  the  controversy, 
the  bill  must  be  dismissed.^" 

27  Citing  Black  v.  Huggins,  2  Tenn.  Ch.  780;  1  Morawitz,  Corp.,  §  257. 

28  Kidd  V.  New  Hampshire  Traction  Co.,  72  N.  H.  273,  286,  per  Par- 
sons,  C.  J. 

29  Mawhinney  v.  Bliss,  124  App.  Div.  009,  109  N.  S.  Supp.  .332. 

30  Bank  v.  Carrollton  Railroad,  11  Wall.  (78  U.  S.)  624,  20  L.  ed.  82. 

376 


PARTIES  §  230 

But  it  is  not  indispensable  that  all  the  parties  in  a  suit  in 
equity  should  have  an  interest  in  all  the  matters  contained  in 
the  suit;  it  will  be  sufficient,  in  order  to  avoid  the  objection  of 
multifariousness,  if  each  party  has  an  interest  in  some  ma- 
terial matters  in  the  suit,  and  they  are  connected  with  the 
others.  To  support  the  objection  to  multifariousness  to  a 
bill  in  equity,  because  the  bill  contains  ciifTerent  causes  of  suit 
against  the  same  person,  two  things  must  concur;  first,  the 
grounds  of  suit  must  be  different;  second,  each  ground  must 
be  sufficient,  as  stated,  to  sustain  a  bill.^^ 

A  public  nuisance  may  be  abated  on  a  bill  in  equity,  brought 
by  a  private  party,  who  has  suffered  special  damage,  and  it  is 
necessary  for  the  plaintiff  in  such  a  bill  to  show  that  he  has 
sustained  individual  injury  by  the  nuisance.  In  such  a  case 
the  private  party,  though  nominally  suing  on  his  own  account, 
acts  rather  as  a  public  prosecutor,  on  behalf  of  all  who  are  or 
may  be  injured.  If  he  has  partners  in  the  particular  business 
affected  by  the  nuisance,  he  need  not  join  them  as  plaintiffs, 
any  more  than  he  need  join  other  persons  who  have  suffered 
similar  injuries .^^ 

§  230.  Corporation  as  Salvors  May  Maintain  Suit  for 
Salvage. 

A  corporation  is  not  disqualified,  by  the  simple  fact  of  its 
being  a  corporation,  from  maintaining  a  suit  for  salvage. 
Hence,  where  a  service,  in  its  nature  otherwise  one  of  salvage, 
was  performed  by  a  stock  company,  chartered  to  hire  or  own 
vessels  manned  and  equipped  to  be  employed  in  saving  vessels 
and  their  cargoes  wrecked,  and  to  receive  compensation  in 
like  manner  as  private  persons,  and  where  the  persons  actually 
performing  the  service  had  no  share  in  the  profits  of  the  com- 
pany, but  were  hired  and  paid  under  permanent  and  liberal 
arrangements  and  rates  of  pay — the  net  profits  being  di- 
vided among  stockholders — such  service  was  held  to  be  a 

31  Brown  v.  Guarantee  Trust  &  S.  D.  Co.,  128  U.  S.  403,  32  L.  ed.  468, 
9  Sup.  Ct.  127. 

32  Mississippi  &  Missouri  Ry.  Co.  v.  Ward,  2  Black  (67  U.  S.),  485,  17 
L.  ed.  311. 

377 


§§  231-233  PARTIES 

salvage  service,  and  the  corporation  to  be  entitled  to  pay  as 
salvors  accordingly.^^ 

§231.  Power  of  Corporation  To  Sue  and  Be  Sued  In- 
cludes Power  to  Arbitrate. 

Although  the  charter  of  a  company  does  not,  in  terms,  give 
the  power  to  refer,  yet  a  power  to  sue  and  be  sued  includes  a 
power  of  reference,  that  being  one  of  the  modes  of  prosecuting 
a  suit  to  judgment.  So,  also,  a  power  to  agree  with  a  pro- 
prietor for  the  purchase  or  use  of  land,  includes  a  power  to 
agree  to  pay  a  specified  sum  or  such  sum  as  arbitrators  may 
fix  upon.  But  it  is  immaterial  whether  the  power  of  reference 
is  lodged  in  the  president  and  directors  or  in  the  stockholders 
assembled  in  general  meeting;  for  the  entire  corporation  is 
represented  in  court  by  its  counsel,  whose  acts,  in  conducting 
the  suit,  are  presumed  to  be  authorized  by  the  party .^ 

§  232.  State  Bank  Converted  Into  National  Bank- 
Right  To  Sue  in  Former  Name. 

The  conversion  of  a  State  bank  into  a  national  bank,  with 
a  change  of  name,  under  the  National  Banking  Act,  does  not 
affect  its  identity  or  its  right  to  sue  upon  liabilities  incurred 
to  it  by  its  former  name.^^ 

§  233.  Corporation's  Right  To  Sue — Waiver— Foreign 
Corporation. 

The  want  of  capacity  of  a  foreign  corporation  to  sue  because 
of  noncompliance  with  statutory  conditions  precedent,  such 
as  the  prohibition  against  suing,  etc.,  without  alleging  and 
proving  the  payment  of  its  annual  license  fee  last  due,  may,  it 
is  held,  be  waived  and  is  waived  if  objection  is  not  taken  by 
demurrer  or  answer,  and  the  action  cannot  be  dismissed  for 
failure  to  prove  payment  of  the  fee.^^ 

33Camanche,  The,  8  Wall.  (75  U.  S.)  448,  19  L.  ed.  397,  cited  in  Black- 
wall,  The,  10  Wall.  (77  U.  S.)  1,  11,  19  L.  ed.  870. 

34  Alexandria  Canal  Co.  v.  Swann,  5  How.  (46  U.  S.)  8.3,  12  L.  ed.  60. 

35  Michigan  Ins.  Bank  v.  Eldred,  143  U.  S.  293,  .36  L.  ed.  162,  12  Sup. 
Ct.  450. 

38  Rothchild  Bros.  v.  Mahoney,  51  Wash.  633,  99  Pac.  1031  (three  judges 
dissenting) . 

378 


PARTIES  §§  234-236 

On  a  trial  upon  the  merits,  it  is  too  late  to  take  exception 
to  the  corporate  capacity  of  the  plaintiffs  to  sue;  this  should 
be  done  by  a  plea  in  abatement,  before  the  trial;  and  the 
omission  to  do  this  is  a  waiver  of  the  objection.^^ 

§  234.  When  Corporation  Not  Entitled  to  Equitable 
Consideration  of  Courts— Consolidation  to  Prevent  Com- 
petition—Fraud on  Public. 

The  public  welfare  lies  at  the  basis  of  corporate  privileges. 
The  interests  of  the  stockholders  are  but  secondary.  There- 
fore, if  a  corporation  willfully  frustrates  the  intention  so  under- 
lying its  grant  of  power,  by  an  act  which  is  a  fraud  on  the  pub- 
He,  it  is  not  entitled  to  the  equitable  consideration  of  the 
courts.  This  rule  was  applied  in  a  case  where  the  aid  of  equity 
was  sought  by  an  electric  light  and  heat  company,  to  restrain 
competition  in  furnishing  electric  light.  The  injunction 
sought  was  refused,  it  appearing  that  the  charter  privileges  of 
the  petitioner  had  been  misused,  so  as  to  hinder  the  public 
interests  by  a  combination  with  another  corporation,  so  as  to 
suppress  the  use  of  the  commodity  for  the  supplying  of  which 
the  franchise  was  granted.^* 

§  235.  Consolidation — Successor  of  Corporation— Rights 
of. 

A  successor  of  a  corporation  which  had  been  sued  at  law  on 
a  liability  existing  before  consolidation,  can  assert  all  the 
rights  and  equities  and  defenses  that  the  original  corporation 
could  assert,  it  having  succeeded  to  the  merged  corporations' 
respective  rights,  etc.,  and  become  liable  for  their  debts,  etc.^^ 

§  236.  Foreign  Corporations — Parties. 

In  Florida  it  is  held  that  under  the  law  of  comity  the  courts 
of  Florida  will  entertain  a  suit  in  chancery  brought  by  a  for- 
eign corporation  where  the  question  presented  by  the  bill  is 

37  Conard  v.  Atlantic  Ins.  Co.,  1  Pet.  (26  U.  S.)  3S6,  7  L.  ed.  189. 

38  Scranton  Elec.  L.  &  H.  Co.  v.  Scranton  Ilium.  H.  &  P.  Co.,  122  Pa.  St. 
154,  9  Am.  St.  Rep.  79,  3  Am.  Elec.  Cas.  499,  15  Atl.  446. 

38  Southern  Steel  Co.  v.  Hopkins  et  al.,  157  Ala.  175,  117  So.  274. 

379 


§  236  PARTIES 

the  right  of  such  a  corporation  to  protect  its  real  estate  from 
trespass,  of  which  equity  has  jurisdiction,  inasmuch  as  such  a 
corporation  is  not  forbidden  by  the  statute  law  there  from  hold- 
ing real  estate."*" 

In  Idaho  where  a  foreign  corporation  rightfully  acquired 
title  to  real  property  within  the  State  at  a  time  when  it  had 
in  all  respects  complied  with  the  law  of  the  State  in  respect  to 
foreign  corporations,  but  failed  to  comply  with  a  subsequent 
enactment,  but  no  forfeiture  of  its  title  has  been  judicially  de- 
clared, it  will  be  allowed  a  standing  in  court  to  protect  its 
title  and  right  of  possession  as  against  a  private  party  who 
trespasses  thereon  or  seeks  or  attempts  to  appropriate  the 
same  to  his  own  use  and  benefit.'*^  Under  the  Massachusetts 
statute,  prohibiting  the  maintenance  of  actions  or  a  recovery 
in  the  State  Courts  by  foreign  corporations,  so  long  as  they 
fail  to  comply  with  the  requirements  of  the  statute,  failure  to 
comply  with  the  said  enactment  must  be  pleaded  seasonably  in 
order  to  avail  a  defendant;  and  the  effect  of  the  statute  is, 
when  noncompliance  with  its  terms  is  seasonably  and  prop- 
erly pleaded  to  stay  proceedings  until  the  temporary  disa- 
bility is  removed,  which  can  be  done  at  any  time  after  as  well 
as  before  resort  to  the  courts."*^ 

40  Indian  River  Mfg.  Co.  v.  Wootin,  55  Fla.  745,  46  So.  185. 

«  War  Eagle  Con.  Min.  Co.  v.  Dickie,  14  Idaho,  5.34,  94  Pac.  1034. 

42  National  Fertilizer  Co.  v.  Fall  River  Five  Cent  Sav.  Bk.,  196  Mass. 
458,  82  N.  E.  671  (the  court,  per  Rugg,  J.,  said:  "The  great  weight  of  au- 
thority in  other  jurisdictions  supports  the  conclusion  here  reached);  Buffalo 
Zinc  &  Copper  Co.  v.  Crump,  70  Ark.  525,  534,  69  S.  W.  572,  91  Am.  St. 
Rep.  87;  Woolfort  v.  Dixie  Cotton  Oil  Co.,  77  Ark.  203;  91  S.  W.  .306,  113 
Am.  St.  Rep.  139;  Sutherland-Innes  Co.  v.  Chaney,  72  Ark.  327,  80  S.  W. 
152;  Carson-Rand  Co.  v.  Stern,  129  Mo.  381,  31  S.  W.  772,  32  L.  R.  A.  420; 
State  V.  American  Book  Co.,  69  Kan.  1,  76  Pac.  411,  1  L.  R.  A.  (N.  S.)  1041; 
Deere  v.  Wyland,  69  Kan.  255,  261,  76  Pac.  863;  Hamilton  v.  Reeves,  69 
Kan.  844,  76  Pac.  418;  Ryan  Livestock  &  Feeding  Co.  v.  Kelley,  71  Kan. 
874,  81  Pac.  470;  Cahfornia  Savings  &  Loan  Society  v.  Harris,  111  Cal.  133, 
43  Pac.  525.  There  is  nothing  in  conflict  with  this  view  in  Wood  Co.  v. 
Caldwell,  54  Ind.  270,  or  in  Security  Savings  &  Loan  Association  v.  Elbert, 
153  Ind.  198,  54  N.  E.  753;  Neuchatel  Asplialt  Co.  v.  Mayor  of  New  York, 
155  N.  Y.  37.3,  49  N.  E.  1043,  and  Huttig  Bros.  Manuf.  Co.  v.  Denny  Hotel 
Co.,  6  Wash.  122,  32  Pac.  1073,  were  proceedings  to  enforce  liens  where  the 
statement  was  filed  before  but  the  petition  brought  after  compliance  with 

380 


PARTIES  §  236 

Under  §  15  of  the  General  Corporation  Law  of  New  York,''^' 
providing  that  "no  foreign  stock  corporation  other  than  a 
moneyed  corporation  shall  do  business  in  this  State  without 
having  first  procured  *  *  *  a  certificate  that  it  has  com- 
plied with  all  the  requirements  of  law  *  *  */'  and  that 
''no  foreign  stock  corporation  doing  business  in  this  State 
upon  any  contract  made  by  it  in  this  State,  unless  prior  to  the 
making  of  such  contract  it  shall  have  procured  such  certificate," 
an  action  by  a  foreign  stock  corporation  engaged  in  the  busi- 
ness of  manufacturing  within  the  State,  to  recover  upon  a  policy 
of  fire  insurance  executed  within  the  State,  for  a  loss  occasioned 
by  the  destruction  of  its  property  within  the  State  by  fire,  can- 
not be  maintained,  unless  prior  to  the  making  of  the  contract 
of  insurance  it  had  procured  the  required  certificate.''''  In  cer- 
tain cases  a  foreign  insurance  company  may  maintain  an  ac- 
tion even  though  it  has  failed  to  comply  with  the  State  laws  in 
respect  to  being  authorized  to  do  business  within  its  bound- 
aries.^   Where  it  does  not  appear  anywhere  in  the  pleadings 

the  statute,  and  it  was  held  that  the  proceedings  might  be  maintained. 
See  Blodgett  v.  Lanyon  Zinc  Co.,  120  Fed.  89.3,  897;  Wetzel  &  Tyler  Rail- 
way V.  Tennis  Bros.  Co.,  145  Fed.  458;  Crefeld  Mills  v.  Goddard,  69  Fed. 
141;  Swift  V.  Little,  28  R.  I.  108,  65  Atl.  615;  Hastings  Industrial  Co.  v. 
Moran,  143  Mich.  679,  107  N.  W.  706.  There  are  contrary  authorities. 
Thompson  Co.  v.  Whitehead,  185  111.  454,  56  N.  E.  1106,  76  Am.  St.  Rep. 
51;  United  Lead  Co.  v.  Reedy  Elevator  Manuf.  Co.,  222  111.  199,  78  N.  E. 
567;  Heileman  Brewing  Co.  v.  Peimeise,  85  Minn.  121,  88  N.  W.  441.  These 
cases,  however,  construe  statutes  of  different  phraseology,  and  proceed 
upon  reasoning  respecting  the  effect  of  statutes  as  to  foreign  corporations, 
which  is  not  in  harmony  with  the  trend  of  decisions  in  this  commonwealth 
as  indicated  in  the  cases  cited.  Allen  v.  Milwaukee,  128  Wis.  678,  106  N.  W. 
1099,  5  L.  R.  A.  (N.  S.)  680;  Gary  Lombard  Lumber  Co.  v.  Thomas,  92 
Tenn.  587,  22  S.  W.  743,  and  Halsey  v.  Jewett  Dramatic  Co.,  99  N.  Y.  Supp. 
1122,  114  App.  Div.  420,  deal  with  statutes  so  different  from  our's  that, 
although  apparently  contrary  to  this  decision,  they  throw  no  light  upon 
the  question  here  depending." 

«  L.  1892,  chap.  687,  am'd  L.  1901,  chap.  538,  §  1. 

"  South  Bay  Co.  V.  Howey,  190  N.  Y.  240,  83  N.  E.  26,  rev'g  98  N.  Y.  S. 
909,  113  App.  Div.  382.  Action  by  foreign  corporation;  defense  to  pay 
license  fee ;  facts  must  be  pleaded ;  defense  available  against  assignee.  Halsey 
V.  Jewett  Dramatic  Co.,  190  N.  Y.  231,  rev'g  114  App.  Div.  420. 

■IS  Pittsburgh,  Cincinnati,  Chicago  &  St.  Louis  Ry.  Co.  v.  German  Ins. 
Co.  (Ind.  App,,  1909),  87  N.  E.  995  (citing  Phoenix  Ins.  Co.  v.  Pennsylvania 

381 


§  237  PARTIES 

that  the  cause  of  action  in  any  manner  grew  out  of,  or  was  af- 
fected by,  the  alleged  wrongful  act  of  a  foreign  corporation  in 
doing  business  in  a  State  without  complying  with  its  statute, 
which  in  such  case  makes  it  liable  to  a  fine  and  prohibits  it 
from  suing  in  said  State  either  in  contract  or  tort  but  does  not 
invalidate  its  contracts,  such  corporation  is  not  precluded 
from  suing  in  the  Federal  Courts  within  the  State  upon  a  cause 
of  action  arising  under  a  United  States  statute.'*^ 

§  237.  Foreign  Corporations — Parties — Presumptions. 

All  corporations  and  persons  are  presumed  to  have  complied 
with  the  law  and  to  have  legal  capacity  to  sue;  this  applies  to 
a  foreign  corporation  and  compliance  with  State  statutes  re- 
quiring it  to  appoint  a  resident  agent.^^  But  under  a  New 
York  decision  it  is  held  that  a  foreign  corporation  suing  on  a 
contract  made  in  that  State  must  allege  and  prove  a  com- 
pliance with  the  General  Corporation  Law^^  governing  the 
right  of  foreign  stock  corporations  to  do  business  and  sue  in 
that  State;  and  that  where  the  plaintiff,  suing  on  such  aeon- 
tract,  alleges  that  it  is  a  foreign  corporation,  there  exists  a 
presumption  that  it  is  a  foreign  stock  corporation  and  within 
the  prohibition  contained  in  said  General  Corporation  Law.^" 

Rd.  Co.,  134  Ind.  215,  33  N.  E.  970,  20  L.  R.  A.  405),  an  action  by  the  insur- 
ance company  against  the  railway  company  to  recover  damages  on  account 
of  insurance  on  property  burned  by  fire  negligently  set  to  other  property 
and  spreading;  by  payment  of  the  insurance  the  company  became  sub- 
rogated to  the  rights  of  the  insured  and  brought  suit  in  that  capacity.  It 
was  also  declared  in  the  case  that  an  answer,  which  does  not  amount  to  a 
plea  that  a  party  is  not  a  corporation  or  deny  its  corporate  existence,  and 
at  the  most  denies  its  right  to  do  business  in  the  State,  falls  short  of  deny- 
ing the  corporation's  right  to  prosecute  an  action  sounding  in  tort. 

*"  Vitagraph  Co.  of  America  v.  Twentieth  Century  Optiscope  Co.  (U.  S. 
C.  C),  157  Fed.  699. 

«F.  H.  Rogers  Lumber  Co.  v.  McRea  (Ind.  Ty.  Ct.  App.,  1907),  104 
S.  W.  803. 

*s  Section  15.    See  next  following  note. 

«  Portland  Company  v.  Hall  &  Grant  Construction  Co.,  108  N.  Y.  Supp. 
821,  123  App.  Div.  495,  granting  rehearing  in  106  N.  Y.  Supp.  641,  121 
App.  Div.  779;  §  15,  Gen.  Corp.  Law  (Laws  1892,  chap.  687).  See  Laws 
1909,  chap.  28,  §  15;  2  Birdseye's  Gumming  &  Gilbert's  Consol.  Laws  N.  Y. 
Annot.,  p.  1979.    See  Groton  Bridge  &  Mfg.  Co.  v.  American  Bridge  Co., 

382 


PARTIES  §§  238,  2,39 

§  238.  Right  of  Corporation  To  Sue  as  Affected  by  Dis- 
solution. 

In  a  large  majority  of  the  States  there  are  statutory  pro- 
visions which  either  expressly  or  impliedly  extend  the  corpo- 
rate existence  for  the  purpose  of  prosecuting  or  defending 
suits  or  other  specified  purposes  so  that  the  decisions  in  re- 
lation to  the  right  of  a  corporation  to  sue  or  be  sued  must  be 
considered  in  the  light  of  these  statutes. 

§  239.  Same  Subject. 

Although  a  corporation  is  insolvent  and  a  creditor's  suit 
pending,  and  even  though  a  receiver  of  its  assets  has  been 
appointed  and  a  decree  rendered  for  the  sale  of  the  same  cor- 
porate existence  is  held  not  to  be  thereby  affected  or  the 
corporation  prevented  from  acting  as  such  and  incurring  in- 
debtedness.^" In  a  Federal  case  it  appeared  that  there  were  pro- 
ceedings under  the  statutes  of  a  State,  brought  at  the  instance 
of  the  bank  commissioners,  to  wind  up  a  banking  corporation 
and  the  property  and  assets  were  transferred  and  vested  in 
a  duly  appointed  and  qualified  assignee  to  be  converted  into 
money  and  distributed  by  decrees  of  the  State  Court  as  pro- 
vided by  statute;  a  commissioner  was  also  appointed  in  ac- 
cordance with  the  statute  to  examine  and  allow  claims,  against 
the  corporation,  of  depositors  and  other  creditors.  It  was 
held  that  the  corporation  was  not  at  once  dissolved  by  the 
proceedings  so  that  a  judgment  could  not  be  rendered  against  it 
by  the  Federal  Court  .^^    Under  an  Alabama  case  after  the  char- 

151  Fed.  871,  as  to  noncompliance  with  said  section  not  preventing  action 
in  Federal  Courts. 

50  Atlas  Ry.  Supply  Co.  v.  Lake  &  River  Ry.  Co.,  134  Fed.  503. 

61  Anglo-American  Land,  Mortgage  &  Agency  Co.  v.  Cheshire  Prov.  Inst. 
(U.  S.  C.  C),  124  Fed.  464,  aff'd  in  Cheshire  Provident  Inst.  v.  Anglo- 
American  Land  Mortgage  &  Agency  Co.  (U.  S.  C.  C.  A.),  132  Fed.  968;  8.  c, 
134  Fed.  152.  In  this  case  in  132  Fed.  968,  affirming  the  case  in  the  lower 
court,  it  was  said,  per  Brown,  Dist.  J.:  "Upon  an  examination  of  chap.  162, 
Pub.  St.  N.  H.,  1901,  §§  12  to  24,  inclusive,  in  connection  with  the  plea  and 
stipulation,  it  is  clear  that  the  Circuit  Court  was  right  in  holding  that  the 
corporation  had  not  been  dissolved.  *  *  *  The  argument  that,  be- 
cause the  assets  of  the  corporation  are  in  the  hands  of  an  assignee,  a  creditor 
should  not  be  permitted  to  pursue  to  judgment  an  action  against  the  corpo- 

383 


§  239  PARTIES 

ter  of  a  corporation  is  declared  forfeited,  it  can  do  no  act  by 
which  rights  can  be  acquired,  nor  can  it  maintain  a  suit  to  en- 
force those  acquired  during  the  continuance  of  the  charter, 
unless  its  power  and  capacity  for  that  purpose  is  continued  by 
statute,  after  its  existence  as  a  corporation  is  ended .^^  Under 
another  case  in  the  same  State  a  bank  has  no  power,  after  a  judg- 
ment declaring  its  charter  forfeited,  to  make  a  contract,  except 
so  far  as  it  may  be  authorized  to  act  by  a  statute  providing 
for  the  ascertainment  of  the  fact,  whether  its  charter  was 
forfeited  or  not.^^  In  Colorado  the  dissolution  of  a  corporation 
cannot  be  pleaded  in  bar  of  an  action  against  it  where  the 
cause  of  action  arose  before  the  dissolution.^^  And  in  that 
State  it  is  held  that  no  action  lies  against  a  corporation  as  such 
after  its  dissolution.  But  before  dissolution  and  until  some 
action  is  taken  in  court,  which,  in  its  nature  and  effect,  may 
operate  to  restrain  or  defeat  the  right  so  to  do,  creditors  are  at 
liberty  and  have  the  right  to  pursue  the  remedies  provided  by 
law  for  the  collection  of  demands  justly  due  to  them  from  such 
corporation,  unless  they  have  in  some  way  deprived  themselves 
of  such  right .^^     In  a  Connecticut  case  an  adjudication,  on  quo 

ration,  is  disposed  of  by  the  case  of  Parsons  v.  Eureka  Powder  Works,  48 
N.  H.  66.  See  also  Moran  v.  Sturges,  154  U.  S.  256,  274,  275,  14  Sup.  Ct. 
1019,  38  L.  ed.  981.  Furthermore,  in  chap.  148,  Pub.  St.  N.  H.,  1901,  §§  18, 
19,  are  provisions  similar  to  those  of  other  States,  continuing  as  a  body 
corporate,  for  the  purpose  of  prosecuting  and  defending  suits,  a  corporation 
whose  corporate  existence  has  been  terminated  in  any  way,  and  providing 
that  the  repeal  or  amendment  of  a  charter  or  laws  under  which  it  was  estab- 
lished shall  not  impair  a  liability  previously  incurred.  There  was  no  legal 
obstacle  to  a  judgment  of  the  Circuit  Court  against  the  corporation  to  deter- 
mine the  question  of  debt  or  no  debt.  Chemical  Bank  v.  Hartford  Deposit 
Co.,  161  U.  S.  1,  16  Sup.  Ct.  439,  40  L.  ed.  595;  Hess  v.  Reynolds,  113  U.  S. 
73,  77,  5  Sup.  Ct.  377,  28  L.  ed.  927;  Clark  v.  Bever,  139  U.  S.  103,  11  Sup. 
Ct.  468,  35  L.  ed.  88;  Byers  v.  McAuley,  149  U.  S.  620,  13  Sup.  Ct.  906, 
37  L.  ed.  867;  Yonley  v.  Lavender,  21  Wall.  276,  22  L.  ed.  536;  Kittredge 
V.  Race,  92  U.  S.  116,  121,  23  L.  ed.  488;  Edwards  v.  Hill,  59  Fed.  723,  8 
C.  C.  A.  233;  Walker  v.  Brown,  63  Fed.  204,  11  C.  C.  A.  135." 

52  Saltmarsh  v.  Planters'  &  Merchants'  Bk.,  17  Ala.  761. 

53  Saltmarsh  v.  Planters'  &  Merchants'  Bk.,  14  Ala.  668. 
54Steinhauer  v.  Colmar,  11  Colo.  App.  494. 

55  Breene  v.  Merchants'  &  Mechanics'  Bk.,  11  Colo.  97,  100,  17  Pac.  280, 
per  De  France,  C. 

384 


PARTIES  §  239 

warranto  proceedings,  that  a  corporation  had  no  legal  existence 
after  a  certain  date,  does  not  destroy  such  rights  of  proj)erty 
as  it  then  held.  Its  effect  is  to  transf(>r  the  custody  of  the 
property  of  the  supposed  corporation  from  the  directors,  as 
such,  to  them  as  trustees  for  those  interested  in  the  succession, 
in  order  to  satisfy  such  indebtedness  as  may  exist  and  to  trans- 
fer the  balance,  if  any,  to  the  stockholders  pro  rata?^ 

In  the  same  State  creditors  of  a  corporation  who  had  no 
knowledge  of  the  pendency  of  proceedings  for  its  dissolution, 
and  were  intentionally  prevented  from  receiving  notice  thereof 
by  those  who  were  conducting  the  winding-up  suit,  are  ag- 
grieved by  a  judgment  dissolving  such  corporation  while  it 
has  outstanding  liabilities  and  owns  property  or  rights  of  ac- 
tion which  are  applicable  to  their  payment.     And  notwith- 
standing the  dissolution  of  a  corporation  by  judicial  decree, 
those  really  interested  in  it — its  members  or  its  creditors — 
can  always  rely  upon  obtaining  adequate  protection  from  the 
courts.    So  long  as  the  control  of  the  court  over  the  winding-up 
proceedings  continues  according  to   the  ordinary  course  of 
judicial  procedure,  so  long  it  may  open  and  set  aside  the  judg- 
ment of  dissolution  for  sufficient  cause  duly  shown,  and  at  the 
same  time  revive  the  corporation  for  the  purpose  of  enabling 
it  to  be  wound  up  properly.     So  one  corporation  which  has 
transferred  all  its  assets  to  another,  upon  the  agreement  of  the 
second  to  pay  the  debts  of  the  first,  can  proceed  in  equity  to 
compel  the  performance  of  the  agreement;  and  that  right 
constitutes  an  asset  which  its  creditors  can  pursue  in  equity. 
If  it  has  been  improperly  dissolved,  the  reopening  of  the  judg- 
ment of  dissolution,  so  that  the  company  or  its  receiver  may 
enforce  the  agreement  for  the  benefit  of  its  creditors,  is  an 
appropriate  remedy.    And,  while  a  surety  cannot  sue  the  j^rin- 
cipal  debtor,  at  law,  until  he  has  been  damnified,  if  he  has,  as 

58  New  York,  Bridgeport  &  Eastern  Ry.  Co.  v.  Motil,  81  Conn.  466,  71 
Atl.  563.  But  what  powers  the  directors,  as  such  trustees,  would  have  in 
the  disposition  of  such  property,  in  the  absence  of  the  appointment  of  a 
receiver,  qucere.  The  case  was  an  action  under  the  General  Statutes,  §  4053, 
to  settle  title  to  land. 

25  385 


§  239  PARTIES 

part  of  the  contract  of  suretyship,  put  all  his  property  in  the 
principal's  hands,  he  may  have  relief  in  equity,  should  the 
latter,  while  retaining  the  property,  avoid  payment  of  the 
debt  in  violation  of  the  rights  of  the  creditor." 

"The  analogy  between  the  death  of  a  natural  person  and 
the  dissolution  of  an  artificial  person  is  an  imperfect  one. 
Behind  the  artificial  person  stand  and  survive  the  other  per- 
sons, natural  or  artificial,  who  really  composed  it. 

"The  artificial  person  known  as  the  Connecticut  River 
Manufacturing  Company  never  existed  save  in  contemplation 
of  law.  When  it  sought  dissolution  by  means  of  a  judicial 
action,  and  assumed  the  position  of  an  ordinary  suitor,  it  be- 
came entitled  to  all  the  benefits  and  subject  to  all  the  burdens 
that  are  incident  to  that  position.  A  corporation  which  re- 
sists unsuccessfully  a  stockholder's  application  for  its  dissolu- 
tion could  not  be  precluded  by  the  judgment  from  appealing 
for  errors  in  law,  notwithstanding  the  judgment  pronounced 
its  existence  at  an  end.  It  would  remain  in  existence  for  the 
purpose  of  protecting  itself  against  that  judgment,  the  op- 
eration of  which  the  appeal  would  meanwhile  suspend .^^  So 
if  it  procure  a  judgment  of  dissolution,  third  parties  ought  not 
to  lose  a  remedy  against  it,  or  one  which  can  only  be  enforced 
through  it,  if,  as  to  them,  that  judgment  is  one  that,  in  equity, 
cannot  stand,  and  to  open  it  and  reinstate  the  corporation  in 
life  would  smooth  the  way  towards  making  that  remedy  ef- 
fectual. 

"A  corporation  is  called  into  existence  and  invested  with 
the  attribute  of  personality  by  the  sovereign  power  of  the  State. 
If  created  for  a  limited  term,  and  for  that  only,  or  if  consti- 
tuted subject  to  conditions  the  performance  of  which  becomes 
impossible,  a  franchise  thus  expiring  may  be  extended  in  du- 
ration or  renewed  by  subsequent  action  on  the  part  of  the 
sovereign,  even  if  that  be  had  after  a  dissolution  has  occurred.^* 

57  Sullivan  County  Railroad  v.  Connecticut  River  Lumber  Co.,  76  Conn. 
464,  465. 

58  Giles  V.  Stanton,  86  Tex.  620. 

59  Colchester  v.  Seaber,  3  Burr,   1866:  Rex  v.  Passmore,  3  T.  R.  199; 

386 


PARTIES  §  239 

This  does  not  create  a  new  artificial  person.  It  is  a  revival  of 
the  original  corporation,  and  a  revival  after  it  had  once  ceased 
to  exist.  The  harsh  doctrine  of  the  common  law,  that  the 
absolute  and  unqualified  dissolution  of  a  corporation  extin- 
guished ipso  facto  alike  all  its  property  rights  and  all  its  obli- 
gations was  never  received  in  equity.  Those  really  interested 
in  them — its  members  or  its  creditors — can  always  rely  on 
obtaining  adequate  protection  from  the  courts.  Every  mon- 
eyed corporation  is,  in  a  sense,  a  trustee  for  those  who  own 
its  capital  or  have  a  right  to  look  to  it  for  security.  A  trust 
never  fails  for  want  of  a  trustee,  and  whenever  necessary  the 
State,  in  some  form  of  proceeding,  can  and  will  supply  one. 

"It  follows  from  these  principles  that  when  the  legislative 
power  has  committed  to  the  judicial  power  jurisdiction  to 
dissolve  corporations  by  judgments  rendered  in  winding-up 
proceedings,  so  long  as  the  control  of  the  court  over  those 
proceedings  continues  according  to  the  ordinary  course  of 
judicial  procedure,  so  long  may  it  open  and  set  aside  such  a 
judgment,  for  sufficient  cause  duly  shown,  and  at  the  same 
time  reinstate  the  corporation  in  life  foi-  the  purpose  of  enabling 
that  to  be  done  properly  which  had  been  undone  because  done 
improperly.  The  Superior  Court  opened  the  judgment  be- 
cause the  affairs  of  the  manufacturing  company  had  not  been 
properly  wound  up.  That  they  might  now  be  properly  wound 
up,  it  was  within  its  power  to  revive  the  company  and  thus 
facilitate  at  once  resistance  to  any  unjust  demands  against 
it,  and  the  enforcement  of  all  just  demands  in  its  favor."  ^° 

Again,  in  that  State  receivers  of  corporations  are  author- 
ized by  statute  to  bring  suits  in  their  own  names,  or  in  the 
names  of  the  corporations,  to  defend  all  suits  brought  against 
either,  and  to  do  in  their  own  names,  or  in  the  names  of  the 
corporations,  all  things  necessary  or  proper  in  the  execution 
of  their  trusts.    It  is  held  not  to  be  a  legislative  recognition  of 

Bleakney  v.  Farmers'  &  Mechanics'  Bank,  17  S.  &  R.  (Pa.)  64.  See  Wilcox 
V.  Continental  Life  Ins.  Co.,  56  Conn.  468,  477. 

80  Sullivan  County  Railroad  V.  Connecticut  River  Lumber  Co.,  76  Conn. 
464,  473,  474,  per  Baldwin,  J. 

387 


§  240  PARTIES 

the  capacity  of  such  corporations  to  sue  and  be  sued  after  a 
decree  annulling  their  charters.*^^  So  where  by  decree  of  court 
receivers  were  appointed  for  a  life  insurance  company  and  the 
company's  property  was  vested  in  them  and  its  charter  an- 
nulled; and  a  suit  was  pending  at  the  time  against  the  company 
in  which  its  property  had  been  attached,  it  was  held  that  the 
suit  was  abated  and  the  attachment  lien  destroyed  by  the  dis- 
solution of  the  company .*^2 

The  legal  existence  of  a  corporation  is  not  cut  short  by  its 
insolvency  and  the  consequent  appointment  of  a  receiver,  and 
there  is  nothing  in  the  statutes  relating  to  national  banks 
which  takes  them  out  of  the  operation  of  this  general  rule.^^ 

§  240.  Same  Subject. 

In  Michigan  a  corporation  is  dissolved  with  the  expiration 
of  its  charter,  and,  except  as  given  the  right  to  wind  up  its 
business  after  such  expiration,  within  a  time  hmited  by  stat- 
ute, its  subsequent  transactions  are  void.*^"*  So  a  corporation 
chartered  by  a  special  act  of  the  legislature  to  exist  for  a  cer- 
tain period  of  time  and  which  subsequently  has  by  statute  an 
additional  period  of  time  given  it  for  the  purpose  of  winding 
up  its  affairs  cannot  sue  thereafter  under  a  claim  that  its  char- 
ter is  extended  by  another  statute  where  such  statute  is  un- 
constitutional.®^ 

Under  a  Kansas  decision  in  1892  the  First  State  Bank 
of  Jetmore  was  chartered  for  all  the  purposes  then  permitted 
by  law  to  banking  corporations.  It  commenced  business  and 
continued  to  operate  as  a  banking  corporation  until  1897.  It 
then  went  into  voluntary  liquidation,  paid  off  its  depositors, 

61  Wilcox  V.  Continental  Life  Ins.  Co.,  56  Conn.  469,  16  Atl.  249. 

62  Wilcox  V.  Continental  Life  Ins.  Co.,  56  Conn.  468,  16  Atl.  249. 

63  Chemical  Nat.  Bank  v.  Hartford  Deposit  Co.,  161  U.  S.  1,  16  Sup.  Ct. 
439,  40  L.  ed.  595. 

84  Clark  V.  American  Cannel  Coal  Co.,  165  Ind.  21.3,  73  N.  E.  1083.  Time 
is  limited  to  three  years  under  Indiana  statute,  §  3429;  Burns,  1901;  §  3006, 
Rev.  Stat.,  1881,  and  Horner,  1901. 

65  Clark  V.  American  Cannel  Coal  Co.,  165  Ind.  213,  73  N.  E.  1083,  112 
Am.  St.  Rep.  217. 

388 


PARTIES  §  240 

surrendered  to  the  bank  commissioner  the  certificate  of  au- 
thority to  transact  business  which  it  had  obtained  from  him, 
and  ceased  to  transact  any  })usiness  except  to  collect  what  it 
could  of  the  debts  owing  to  it  and  to  distribute  the  proceeds 
among  its  stockholders  by  way  of  closing  up  its  affairs.  In 
1905  it  brought  a  suit  upon  a  promissory  note  given  to  it  in 
1896.  It  was  held  (1)  that  the  bank  continued  to  be  a  bank- 
ing corporation  after  the  steps  taken  in  1897,  as  before;  (2)  that 
the  period  for  which  the  bank  was  chartered  not  having  ex- 
pired, no  forfeiture  having  been  suffered,  and  no  judgment 
of  dissolution  having  been  rendered  against  it,  the  corporation 
is  still  in  existence;  (3)  that  the  bank  had  capacity  to  sue  as  a 
banking  corporation  when  the  action  referred  to  was  insti- 
tuted; (4)  that  after  the  bank  had  paid  its  depositors  and  had 
surrendered  its  certificate  of  authority  to  do  business  it  was  no 
longer  subject  to  the  provisions  of  the  banking  act  requiring 
reports  of  its  financial  condition  to  be  made  to  the  bank  com- 
missioner; (5)  that  after  the  steps  taken  in  1897  the  bank  was 
not  "doing  business"  within  the  meaning  of  §1283  of  the 
General  Statutes  of  1901,  requiring  financial  statements  to  be 
filed  with  the' Secretary  of  State  as  a  condition  precedent  to 
the  maintenance  of  an  action  or  the  recovery  of  a  judgment; 
(6)  that  the  bringing  of  the  suit  referred  to  did  not  constitute 
"doing  business"  within  the  meaning  of  the  statute  just 
cited  ."'^ 

In  another  case  in  the  same  State  it  is  held  that  after  a  cor- 
poration is  dissolved  and  has  ceased  to  exist  it  cannot  main- 
tain an  action  in  its  former  name  as  a  corporation  against  one 
of  its  own  members  who  had  received  property  from  the  com- 
pany, or  who  had  received  more  than  his  share  thereof,  or 
who  owed  the  company.  The  only  proper  remedy,  in  such  a 
case,  would  be  an  action  by  one  or  more  of  the  members 
against  the  others  for  an  accounting,  and  to  settle  and  close 
up  all  the  affairs  of  the  company .^^ 

In  Louisiana  although  a  corporation  had  expired  by  limi- 

««  Wilson  V.  First  State  Bank  of  Jetmore,  77  Kan.  589,  95  Pac.  404. 
«7  Kurtz  V.  Paola  Town  Co.,  20  Kan.  397. 

389 


§  240  PARTIES 

tation,  and  judgment  of  forfeiture  of  charter  had  also  been 
pronounced  against  it  on  behalf  of  the  State,  yet,  where,  from 
the  nature  and  objects  of  the  institution,  a  power  to  liquidate 
its  affairs,  after  the  expiration  of  its  charter,  might  have  been 
foreseen  as  absolutely  necessary,  the  power  to  accept  from  the 
State  an  extension  of  the  charter,  for  the  purposes  of  liqui- 
dation, will  be  implied;  and  this  extension  enabled  it  to  sue 
a  defaulting  stockholder,  notwithstanding  the  enabling  stat- 
ute was  passed  subsequent  both  to  the  decree  of  forfeiture, 
and  the  expiration  of  the  charter  by  limitation.^^ 

The  Compiled  Laws  of  Michigan,'''^  in  relation  to  the  volun- 
tary dissolution  of  corporations,  provide  that,  on  entry  of  a 
decree  dissolving  the  corporation  and  appointing  a  receiver, 
the  corporation  shall  cease.  Section  10,887,  provides  that, 
whenever  a  receiver  of  a  corporation  has  been  appointed,  new 
suits  may  be  brought  and  carried  on  by  the  receivers  in  their 
own  names  or  in  the  name  of  the  corporation;  and  §  8,  chap. 
230,  p.  2627,  provides  that  corporations  whose  charters  shall 
have  been  annulled  by  forfeiture,  or  otherwise,  shall  continue 
to  be  bodies  corporate  for  the  term  of  three  years  after  the  time 
when  they  would  have  been  so  dissolved,  for  the  purpose  of 
prosecuting  or  defending  suits  by  or  against  them.  After  the 
rendition  of  a  judgment  in  a  court  of  Illinois  against  a  Michigan 
corporation,  the  voluntary  dissolution  of  the  defendant  was  had 
and  a  receiver  appointed,  but  the  Circuit  Court  in  which  the  re- 
ceivership proceedings  were  had  made  an  order  authorizing  the 
receiver  to  sue  out  a  writ  of  error  in  the  Supreme  Court  of  Illi- 
nois, to  review  the  judgment  in  question.  Held,  that  the  re- 
ceiver had  a  right  to  sue  out  the  writ  of  error  in  the  name  of 
the  corporation.'^" 

In  Nebraska  after  the  dissolution  of  a  corporation  by  the 
expiration  of  its  franchise,  or  otherwise,  an  action  may  be 

68  Consolidated  Assoc,  of  the  Planters  of  Louisiana  v.  Claiborne,  7  La. 
Ann.  318. 

69  Comp.  Laws  Mich.,  Art.  10,  859. 

70  Syllabus  in  Eau  Claire  Canning  Co.  v.  Western  Brokerage  Co.,  213  111. 
561,  73  N.  E.  430. 

390 


PARTIES  §  240 

maintained  in  the  corporate  name  on  a  cause  of  action  which 
accrued  to  the  corporation^^ 

In  New  Hampshire  even  though  a  corporate  franchise  has 
been  practically  abandoned  by  those  possessing  control  over 
it  nevertheless  its  stockholders  may  maintain  a  suit  in  equity 
in  another  State  for  the  recovery  of  property  of  said  foreign 
corporation  found  within  its  jurisdiction.'^ 

Under  a  New  York  decision  an  action  brought  against  the 
directors  of  a  stock  corporation  after  voluntary  dissolution  to 
recover  damages  for  a  negligent  injury  for  which  the  corpora- 
tion is  answerable  cannot  be  maintained  as  it  is  not  governed 
by  the  general  corporation  law  but  by  the  stock  corporation 
law  which  makes  specific  provision  for  the  enforcement  of  de- 
mands against  a  stock  corporation  after  voluntary  dissolution, 
and,  therefore,  the  cause  of  action  is  one  which  continues 
against  the  corporation.'^ 

71  Lincoln  Butter  Co.  v.  The  Edwards-Bradford  Lumber  Co.,  76  Neb. 
477,  107  N.  W.  797. 

72  Kidd  V.  New  Hampshire  Traction  Co.,  72  N.  H.  273,  56  Atl.  465. 

73  Cunningham  v.  Glauber,  115  N.  Y.  Supp.  259,  61  Misc.  443.  Genl, 
Corp.  Law  (Laws,  1892,  p.  1811,  chap.  687),  §  30,  controlled  by  §  57  of 
Stock  Corporation  Law  (Laws,  1896,  p.  994,  chap.  932),  providing  that 
"said  corporation  shall  nevertheless  continue  in  existence  for  the  purpose 
of  paying  *  *  *  any  existing  debts  *  *  *  and  may  sue  and  be 
sued  for  the  purpose  of  enforcing  such  debts  and  obligations."  Marstaller 
V.  Ogden  Mills,  143  N.  Y.  398,  38  N.  E.  370  (held  not  an  authority  in  point 
as  the  case  was  that  of  a  business  corporation  and  arose  prior  to  the  above 
§  57  of  the  stock  corporation  law);  O'Reilly  v.  Greene,  41  N.  Y.  Supp.  1056, 
18  Misc.  423,  426,  is  cited;  Bank  of  Louisiana  v.  Wilson,  19  La.  Ann.  1 
(holding  that  an  insolvent,  after  his  surrender,  cannot  maintain  an  action 
against  a  faithless  agent  or  mandatory;  such  action  and  the  right  to  main- 
tain revocatory  actions,  pass  to  the  syndic,  and  can  be  maintained  by  him 
alone  for  the  benefit  of  the  creditors;  by  the  forfeiture  decree,  the  corpora- 
tion loses  the  faculty  of  suing  in  its  corporate  name);  Miami  Exporting  Co. 
V.  Gano,  13  Ohio,  269  (corporation  adjudged  forfeited  and  receiver  appointed 
cannot  prosecute  suit  after  such  dissolution.  The  corporate  name  can  only 
be  used  to  prosecute  a  suit  by  the  receivers,  and  suit  will  be  dismissed  unless 
receivers  set  forth  sufficient  to  show  character  in  which  they  sue).  See 
Renick  v.  Bank  of  West  Union,  13  Ohio,  298  (holding  that  a  writ  of  error 
will  not  lie  upon  a  judgment  in  favor  of  a  defunct  corporation;  that  a  writ 
directed  to  a  defunct  corporation  is  a  nullity;  and  that  the  trustees  of  such 
corporation  must  be  brought  before  the  court). 

391 


§§  241,  242  PARTIES 

§241.  Injuries  to  Persons  in  Execution  of  Public  Trust 
— Rule  as  to,  When  Not  Applicable  to  Private  Corporations. 

It  is  a  rule  that  no  action  can  be  maintained  for  injuries  re- 
sulting to  individuals  from  acts  done  by  persons  in  the  execu- 
tion of  a  public  trust  and  for  the  public  benefit,  acting  with 
due  skill  and  caution  and  within  the  scope  of  their  authorit5% 
but  this  rule  does  not  apply  to  a  private  corporation  author- 
ized to  construct  works  of  public  improvement,  by  private 
capital  for  private  emolument.'^ 

§  242.  Injury  to  Property  Generally. 

An  action  on  the  case  may  be  maintained  by  a  railroad  com- 
pany, as  a  bailee  for  hire,  for  an  injury  to  property,  or  cars  in 
its  possession  belonging  to  another  corporation.'^  So  a  person 
having  a  special  or  absolute  ownership  in  or  possession  of  stock 
which  is  injured  or  killed  by  a  locomotive  engine  or  train  of  a 
railroad  company  may  maintain  an  action  for  such  injury  or 
loss.'^ 

To  entitle  a  property  owner  to  recover  for  injury  to  his 
property  by  reason  of  the  location  of  a  railroad  on  a  public 
street,  road,  or  alley,  it  is  not  necessary,  where  the  statute 
permits  such  a  remedy,  that  the  property  should  be  situated 
upon  the  street  so  occupied,  but  it  is  sufficient  that  the  prop- 
erty should  be  situated  near  enough  to  it  to  be  injured  by  the 
location  and  occupation.'^' 

An  abutting  owner  cannot  maintain  an  action  to  restrain 
an  electric   street   railway   company,   or  telegraph  or  other 

74  Downing  v.  Indiana  State  Board  of  Agriculture,  129  Ind.  443,  28  N.  E. 
123,  12  L.  R.  A.  664. 

75  Montgomery  Gas  Light  Co.  v.  Montgomery  &  E.  R.  Co.,  86  Ala.  372, 
5  So.  735. 

76  St.  Louis,  I.  M.  &  S.  R.  Co.  v.  Biggs,  50  Ark.  169,  6  S.  W.  724,  under 
Mansfield's  Ark.  Dig.,  §  5540. 

77  Shepherd  v.  Baltimore  &  Ohio  Rd.  Co.,  130  U.  S.  426,  32  L.  ed.  970, 
9  Sup.  Ct.  598,  5  Rd.  &  Corp.  L.  J.  580,  17  Wash.  L.  Rep.  406,  21  Ohio 
L.  J.  343,  under  Rev.  Stat.  Ohio,  §  3283. 

As  to  nhutting  owners'  rights  compare  Joyce  on  Electric  Law  (2d  ed.), 
§  1022.    See  also  §§  295-348. 

392 


PARTIES  §  242 

electric  company  from  constructing  its  line  on  the  ground  that 
it  has  not  complied  with  certain  conditions  or  requirements 
imposed  by  statute  or  ordinance  or  that  it  is  a  public  nuisance, 
but  he  must,  in  order  to  obtain  such  relief,  show  some  special 
or  particular  injury  to  his  individual  rights.  This  is  the  gen- 
eral rule  since,  in  case  of  a  public  injury,  the  action  must  be  in 
the  name  of  the  State.'* 

78  Illinois:  Chicago  Teleph.  Co.  v.  Northwestern  Tel.  Co.,  100  111.  App.  57, 
aff'd  in  199  111.  324,  65  N.  E.  329. 

Maine:  Taylor  v.  Portsmouth,  K.  &  Y.  St.  Ry.  Co.,  91  Me.  193,  39  Atl. 
560. 

New  Jersey:  Halsey  v.  Rapid  Transit  St.  Ry.  Co.,  47  N.  J.  Eq.  380,  20 
Atl.  859,  3  Am.  Elec.  Cas.  283;  Borden  v.  Atlantic  Highlands,  R.  B.  &  L. 
B.  E.  R.  Co.  (N.  J.  Ch.),  33  Atl.  276,  28  Chic.  L.  News,  69,  5  Am.  Elec.  Cas. 
179.  See  Stockton  v.  Atlantic  Highlands,  R.  B.  &  L.  B.  E.  R.  Co.,  53  N.  J. 
Eq.  418,  32  Atl.  680  (holding  that  abutting  owners  and  attorney-general 
are  entitled  to  injunction  to  restrain  construction  of  street  railway  where 
it  does  not  comply  with  conditions  precedent  imposed  by  statute). 

New  York:  Black  v.  Brooklyn  H.  R.  Co.,  53  N.  Y.  Supp.  312,  32  App. 
Div.  468. 

Ohio:  Dietz  v.  Cincinnati  &  M.  V.  Tract.  Co.  (C.  P.),  6  Ohio  Dec.  513, 
4  Ohio  N.  P.  399;  Sells  v.  Columbus  St.  Ry.  Co.  (Ohio),  28  Week.  L.  Bull. 
172,  4  Am.  Elec.  Cas.  163. 

Pennsylvania:  Philadelphia  &  T.  R.  Co.  v.  Philadelphia  &  B.  Pass.  R. 
Co.,  6  Pa.  Dist.  Rep.  269. 

Rhode  Island:  Taggart  v.  Newport  St.  Ry.  Co.,  16  R.  I.  668,  19  Atl.  326, 
3  Am.  Elec.  Cas.  306. 

Wisconsin:  Linden  Land  Co.  v.  Milwaukee  Elec.  Ry.  &  L.  Co.,  107  Wis. 
493,  83  N.  W.  851. 

Compare,  however,  the  following  cases: 

United  States:  Beeson  v.  Chicago  (U.  S.  C.  C),  75  Fed.  880,  12  Nat.  Corp. 
Rep.  608,  28  Chic.  L.  News,  367. 

Connecticut:  Canastota  Knife  Co.  v.  Newington  Tramway  Co.,  69  Conn. 
146,  36  Atl.  1107  (holding  that  owner  of  the  fee  in  the  highway  may,  by 
action,  enjoin  a  street  railway  from  laying  its  tracks  where  the  location  is 
not  part  of  the  route  authorized  under  the  company's  charter). 

Ohio:  McMaken  v.  Cincinnati  &  H.  Elec.  St.  R.  Co.,  5  Ohio  N.  P.  367; 
Denver  v.  United  States  Tel.  Co.,  10  Ohio  S.  &  C.  P.  Dec.  273. 

Pennsylvania:  Thomas  v.  Inter-County  St.  Ry.  Co.,  167  Pa.  St.  120,  31 
Atl.  476,  5  Am.  Elec.  Cas.  175  (abutting  owner  may  have  street  railway 
enjoined  when  local  authorities  have  not  consented  to  construction) ;  Penn- 
sylvania R.  Co.  V.  Montgomery  Pass.  Ry.  Co.,  167  Pa.  St.  62,  31  Atl.  468, 
40  Am.  St.  Rep.  468  (injunction  to  prevent  construction  of  electric  railway 
until  compensation  made,  but  operation  will  not  be  enjoined  if  constructed 
without  opposition);    Russ  v.  Pennsylvania  Teleph.  Co.,   15   Pa.  Co.  Ct. 

393 


§  243  PARTIES 

§  243.  Right  of  Consignor  to  Sue  Corporation. 

In  Illinois  the  consignor  for  a  breach  of  duty,  be  he  but  a  bailee, 
may  sue,  as  he  has  such  a  special  property  in  the  goods  as  to 
give  him  the  right  of  action.  The  company  cannot  excuse 
itself,  in  a  suit  by  the  consignor  for  negligence,  on  the  ground 
that  the  real  title  was  in  his  bailor,  unless  they  can  show  that 
the  property  has  been  taken  out  of  their  possession  by  him 
without  any  injury  to  the  lender  or  bailor;  and  even  in  the 
action  of  assumpsit  the  rule  is  not  modified;  nor  does  any  dis- 
tinction exist  between  the  right  of  a  consignor  to  bring  suit 
against  common  carriers  or  against  warehousemen,  either  in 
the  action  of  tort  or  ex  contractu;  and  a  consignee  may  sue  the 
carrier  in  tort  for  loss  of  goods  even  though  they  were  shipped 
to  him  to  be  sold  on  commission.^^  The  court,  however,  per 
Carter,  J.,*"  said:  "The  decisions  in  the  various  jurisdictions 
on  this  question"  as  to  the  right  of  a  person  without  property 
or  interest  in  the  goods  to  sue  in  an  action  ex  delicto  for  a 
breach  of  duty  by  the  carrier  "cannot  be  harmonized,  and  the 
distinctions  between  the  rights  of  parties  when  the  action  is 
in  assumpsit  and  when  in  tort  are  not  always  clearly  de- 
fined." 

Under  a  Pennsylvania  decision  it  is  held  that  the  right  of 
action  against  a  common  carrier  for  goods  lost  or  damaged 
while  in  the  carrier's  custody  follows  ownership  of  the  goods, 
and  anyone  having  a  beneficial  interest  in  them  may  maintain 
the  action.  If  the  action  is  in  tort  it  should  be  brought  by  the 
owner  of  the  goods,  whether  he  be  consignor,  consignee  or  a 
third  person;  anyone  having  a  beneficial  interest  in  the  goods 
may  maintain  an  action  for  damages  thereto;  that  it  is  a  mat- 
ter of  no  consequence  at  whose  hands  a  common  carrier  may 

Rep.  26,  3  Dist.  Rep.  654  (case  of  injunction  allowed  to  stand  to  restrain 
planting  pole  in  front  of  door  or  window  of  plaintiff). 

West  Virginia:  Maxwell  v.  Central  District  &  Printing  Teleg.  Co.,  51 
W.  Va.  121,  41  S.  E.  125,  8  Am.  Elec.  Cas.  209. 

79  Edgerton  v.  Chicago,  Rock  Island  &  Pac.  Ry.  Co.,  240  111.  311,  88 
N.  E.  808.  The  case  of  Great  Western  Rd.  Co.  v.  Comas,  33  111.  185,  is 
followed. 

so  At  pp.  314,  315. 

394 


PARTIES  §  243 

have  received  goods  for  transportation,  and  it  does  not  con- 
cern him  to  know  who  is  the  real  owner  of  the  goods.*^ 

In  Texas  it  is  held  that  the  shipper  is  entitled  to  recover  for 
injuries  to  the  property  covered  by  his  contract  with  the  car- 
rier, for  which  the  latter  is  liable,  notwithstanding  the  shipper 
did  not  own  the  property. ^^ 

But  in  a  case  in  the  Appellate  Division  of  the  Supreme 
Court  of  New  York  it  is  held  that  the  presumption  is  that  the 
consignee  is  the  owner  of  goods  shipped,  but  the  presumption 
may  be  rebutted  by  the  consignor.  It  was  shown  that  the 
goods  were  ordered  of  a  traveling  salesman  on  samples  and 
were  made  up  on  such  orders  by  the  consignor;  that  there  was 
no  memorandum  signed  by  the  consignee;  that  each  package 
of  goods  was  upwards  of  fifty  dollars  in  value;  that  no  part 
of  the  price  had  been  paid,  and  that  the  goods  were  sent  sub- 
ject to  inspection  and  approval,  with  the  understanding  that 
if  the  vendees  were  satisfied  upon  such  inspection,  and  ap- 
proved the  style,  quality,  material  and  price,  the  goods  were 
to  be  considered  as  bought;  it  was  held  that  the  title  remained 
in  the  consignor  so  as  to  entitle  him  to  sue  the  carrier  for  con- 
version, and  that  delivery  to  the  carrier  was  not  an  acceptance 
by  the  consignee.*^    Where,  under  the  averments  of  the  peti- 

81  Lloyd  V.  Haugh  &  Keenan  Storage  &  Transfer  Co.,  223  Pa.  St.  148, 
72  Atl.  516. 

82  Chicago,  Rock  Island  &  Gulf  Ry.  Co.  v.  Jones  (Tex.  Civ.  App.,  1909), 
118  S.  W.  759,  citing  Railway  Co.  v.  Smith,  84  Tex.  348,  19  S.  W.  509; 
Parks  V.  Railway  Co.  (Tex.  Civ.  App.),  30  S.  W.  708;  Railway  Co.  v.  Barnett 
(Tex.  Civ.  App.),  26  S.  W.  783;  Railway  Co.  v.  Klepper  (Tex.  Civ.  App.), 
24  S.  W.  568. 

83  Fein  v.  Weir,  114  N.  Y.  Supp.  426,  129  App.  Div.  299.  In  this  case  the 
court,  per  Clarke,  J.,  said:  "The  right  to  recover  damages  against  a  common 
carrier  is  determined  by  the  answer  to  the  question  of  where  the  title  to  the 
goods  delivered  to  it  for  carriage  remains.  The  presumption  is  ordinarily 
that  the  consignee  is  the  owner  of  the  goods,  but  this  presumption  is  re- 
buttable," citing  and  considering  Angell  on  Carriers  (5th  ed.),  §§  495,  496, 
498;  Schouler  on  Bailments  and  Carriers  (3d  ed.),  §  565;  Krulder  v.  Ellison, 
47  N.  Y.  36;  Sweet  v.  Barney,  23  N.  Y.  335;  Green  v.  Clarke,  12  N.  Y.  343; 
Price  V.  Powell,  3  N.  Y.  322.  The  court  then  adds:  "I  am  satisfied  in  the 
case  at  bar  that  no  title  passed  to  the  vendee;  that  the  vendor  had  no  cause 
of  action  against  the  vendee  for  the  purchase  price  of  the  goods  in  question." 

395 


§  244  PARTIES 

tion,  it  appeared  that  the  plaintiff  had  agreed  to  furnish  to 
parties  named  certain  car  loads  of  coal  at  a  stated  place,  on 
board  of  cars,  payment  therefor  to  be  made  on  receipt  of  the 
same  at  the  places  of  destination;  that  the  plaintiff  had  de- 
livered the  coal  to  the  railroad  company,  on  its  cars,  to  be 
transported  accordingly,  and  that  the  company  refused  to 
deliver  the  coal  to  the  consignees,  but  wrongfully  confiscated 
and  converted  it  to  its  own  use;  that  thirty  days  had  elapsed 
and  the  defendant  had  failed  and  refused  to  pay  for  the  coal 
so  taken,  although  duly  demanded  in  writing,  and  the  petition 
prayed  judgment,  etc.,  it  was  held  that  the  action  could  be 
maintained  by  the  plaintiff  upon  the  causes  of  action  so  stated; 
upon  rehearing  the  court,  per  Benson,  J.,  said:  "It  has  also 
been  held  by  many  courts  in  this  country  that  the  consignor 
with  whom  the  contract  of  shipment  is  made  may  maintain 
an  action  in  such  a  case  for  injury  to  the  goods,  although  he 
has  no  property  therein,"  and  the  motion  for  a  rehearing  was 
denied.** 

§  244.  Suits  by  and  Against  Consignees. 

The  rule  is  well  established  that  a  consignee  may  sue  in  a 
court  of  admiralty  either  in  his  own  name,  as  agent,  or  in  the 
name  of  his  principal  as  he  thinks  best.^ 

A  vessel  with  a  perishable  cargo,  driven  by  stress  of  weather 

See  also  as  to  presumption  of  title  in  consignee  and  rebuttal  thereof, 
Wertheimer  v.  Wells,  Fargo  &  Co.,  112  N.  Y.  Supp.  1062. 

Goods  on  approval  and  rejection  by  consignee,  the  consignor  has  right  of 
action  for  negligence  in  transporting.  Chicago  &  E.  I.  R.  Co.  v.  Boggs,  134 
111.  App.  348. 

84  St.  Louis  &  San  Francisco  Rd.  Co.  v.  Stone,  78  Kan.  505,  510,  97  Pac. 
471,  104  Pac.  1067.  The  court  cites  Blanchard  v.  Page,  74  Mass.  281; 
Spence  v.  Norfolk,  etc.,  Rd.  Co.,  92  Va.  102,  29  L.  R.  A.  578;  1  Hutchinson 
on  Carriers  (.3d  ed.),  197,  3  Id.,  §§  1307-1312,  1320.  It  was  further  decided 
in  the  principal  case:  That  upon  an  objection  to  the  evidence  under  the 
petition  the  court  committed  no  error  prejudicial  to  the  defendant  in  hold- 
ing that  the  action  could  be  proceeded  with  on  the  theory  that  it  was  an 
action  on  an  implied  contract,  and  that  the  measure  of  recovery  if  the  plain- 
tiff should  show  a  right  to  recover  was  the  reasonable  value  of  the  property 
at  the  time  of  such  appropriation. 

85  McKinlay  v.  Morrish,  21  How.  (62  U.  S.)  34.3,  16  L.  ed.  100. 

396 


PARTIES  §  244 

out  of  her  course  and  into  a  strange  port  for  repairs,  is  not 
liable  for  such  injuries  to  the  cargo  as  are  caused  merely  by  the 
delay  of  the  voyage  and  the  consignee  cannot  recover  against 
the  vessel  for  the  loss  thus  occasioned  to  the  cargo  without 
showing  some  fault,  misbehavior,  or  negligence  of  the  master 
or  crew.  If  the  master  was  justified  in  putting  into  port  for 
repairs— if  he  used  proper  diligence  in  getting  the  repairs 
made — if  he  exerted  himself  to  preserve  the  cargo  under  the 
best  advice  he  could  get — and  if  he  was  unable  to  send  the 
cargo  forward  by  another  vessel— his  conduct  is  blameless, 
and  the  consignee  has  no  claim  against  the  vessel.^ 

It  is  held  in  a  case  in  the  Federal  Court  that  a  consignee  may 
be  charged  with  violating  the  Elkins  Law,*'  as  well  as  could 
the  consignor,  where  concessions  or  rebates  are  received  by 
him  from  an  interstate  carrier's  published  tariffs,  where  ter- 
minal charges  are  canceled  at  the  point  of  destination  forming 
a  part  of  such  published  tariffs.** 

80  Collenberg,  The,  1  Black  (66  U.  S.),  170,  17  L.  ed.  89. 

87  Of  February  19,  1903,  chap.  708,  §  1,  32  Stat.  847;  U.  S.  Comp.  Stat., 
Supp.  1905,  p.  599. 

88  United  States  v.  Standard  Oil  Co.  (U.  S.  D.  C),  148  Fed.  719. 


397 


§245 


PARTIES   CONTINUED 


CHAPTER  XV 


PARTIES   CONTINUED 


245.  Corporation   De   Facto   May 

Sue  and  Be  Sued. 

246.  What  Constitutes  a  Corpora- 

tion De  Facto  Generally — 
Legislative  Power  to  Cure 
Defective  Organization. 

247.  Collateral  Attack— De  Facto 

Corporation — Estoppel  to 
Deny  Legal  Corporate  Ex- 
istence. 

248.  Same  Subject — Instances. 

249.  Collateral    Attack — State    or 

Public  Officials  as  Parties — 
De  Facto  Corporation — In- 
stances. 

250.  State  or  State  Officers  as  In- 

dispensable or  Proper  Par- 
ties Defendant  in  Suits  by 
Corporation. 

251.  State    or    State    Officers    as 


Parties  Plaintiff  in  Suits 
Against  Corporation. 
§  252.  United  States  as  Plaintiff- 
Right  to  Recover  from 
Bank — Forgery  of  Payee's 
Name  on  Pension  Checks — 
Internal  Revenue  Taxes — 
Action  Against  Railroads. 

253.  Reorganized  or  Successor  Cor- 

poration. 

254.  Same  Subject. 

255.  Same  Subject. 

256.  Levee     Districts     or     Levee 

Boards  Whether  Public  or 
Private  Corporations  May 
Sue  and  Be  Sued. 

257.  Banks  as  Parties  Generally. 

258.  Suit  by  Corporation  as  Tax- 

payer— Suit  by  Taxpayer 
Against  Corporation. 


§  245.  Corporation  De  Facto  May  Sue  and  Be  Sued. 

A  corporation  must  exist  as  a  corporation  de  jure  or  de  facto 
or  it  has  no  legal  capacity  to  sue  or  be  sued  nor  any  capacity 
of  any  kind.  ^  But  a  de  facto  corporation  may  sue,^  and  this 
applies  to  an  undertaking  entered  into  with  one  who  has 

1  Oroville  &  Virginia  Rd.  Co.  v.  Plumas  County,  37  Cal.  354,  360,  per 
Rhodes,  J.,  cited  in  Martin  v.  Deetz,  102  Cal.  55,  41  Am.  St.  Rep.  151. 
See  Evenson  v.  Ellington,  63  Wis.  734. 

2  Baltimore  &  Potomac  Rd.  Co.  v.  Fifth  Baptist  Church,  137  U.  S.  568, 
34  L.  ed.  784,  11  Sup.  Ct.  185  (actions  in  the  nature  of  actions  on  the  case 
for  the  continuance  of  a  nuisance  to  the  plaintiff's  use  and  enjoyment  of 
its  house  of  public  worship,  by  the  noise,  .smoke,  cinders,  ashes  and  vapors 
from  the  defendant's  adjoining  engine  house,  repair  shop  and  locomotive 
engines  and  by  the  obstruction  of  access  to  the  plaintiff's  building  by  the 
defendant's  unlawful  use  of  its  side  track  in  front  of  it). 

398 


PARTIES  CONTINUED  §  246 

dealt  with  it  as  such.^  And  where  a  corporation  exists  as  one 
(k  facto,  and  common  honesty  demands  that  its  debts  should 
be  paid  it  will  be  held  liable  therefor  and  cannot  escape  lia- 
bility on  the  ground  that  it  was  never  legally  organized  as  a 
corf)oration.'^ 

A  contract  may  validly  exist  by  the  loan  of  money  to  a  de 
facto  corporation  where  it  is  believed  at  the  time  by  all  the 
parties  that  it  was  legally  incorporated  even  though  it  was  not 
a  corporation  de  jure  and  in  such  case  the  lender  cannot  main- 
tain an  action  for  such  loan  against  the  members  as  unincor- 
porated persons.^ 

§  246.  What  Constitutes  a  Corporation  De  Facto  Gen- 
erally— Legislative  Power  to  Cure  Defective  Organization. 

While  persons  cannot  organize  as  a  corporation  de  facto 
when  they  cannot  become  one  de  jure,^  still  a  defect  in  the 
organization  of  a  corporation  does  not  prevent  it  from  being 
a  corporation  defactoJ 

But  an  unconstitutional  act  of  the  legislature  is  not  a  suffi- 
cient basis  for  a  corporation  de  facto.  That  can  exist  only  in 
case  of  a  law  under  which  it  might  have  been  created  de  jure.^ 

In  order  to  create  a  corporation  de  facto  it  is  held  that  sub- 
stantial compliance  with  the  statutory  requirements  as  to 
organization  is  not  necessary  since  a  colorable  compliance 
therewith  is  sufficient.^    A  corporation  may  also  be  a  cfe  facto 

3  Riemann  v.  Tyroler  &  Vorarlberger  Verein,  104  111.  App.  413. 

4  Tulare  Irrigation  District  v.  Shepard,  185  U.  S.  1,  22  Sup.  Ct.  531, 
46  L.  ed.  773. 

6  Lamed  v.  Beal,  65  N.  H.  184,  23  Atl.  189. 

6  Evenson  v.  Ellington,  63  Wis.  734. 

7  New  York,  Bridgeport  &  Eastern  Ry.  Co.  v.  Motil,  81  Conn.  466,  71 
Atl.  563. 

8  Huber  v.  Martin,  127  Wis.  412,  105  N.  W.  1031,  1135,  3  L.  R.  A.  (N.  S.) 
653,  115  Am.  St.  Rep.  1023. 

8  Johnson  v.  Schulin,  70  Minn.  303,  73  N.  W.  147. 

Examine  Finnegan  v.  Noerenberg,  52  Minn.  239,  18  L.  R.  A.  778;  Bibb 
V.  Hall,  101  Ala.  79;  Central  Agric.  &  M.  Assoc,  v.  Alabama  Gold  Life  Ins. 
Co.,  70  Ala.  120. 

"Counsel  for  the  defendants  argue  with  much  force  and  persuasiveness 
that  they  escape  liability  because  they  became  a  corporation  de  jure,  and 

390 


§  246  PARTIES   CONTINUED 

corporation  although  it  has  not  fully  complied  in  all  respects 
with  the  requirements  of  the  statute  under  which  it  is  or- 
ganized.^" 

in  support  of  this  position  they  cite,  among  other  cases:  Wells  Co.  v.  Gastonia 
Cotton  Mfg.  Co.,  198  U.  S.  177,  25  Sup.  Ct.  640,  49  L.  ed.  1003;  Andes  v. 
Ely,  158  U.  S.  312,  322,  15  Sup.  Ct.  954,  39  L.  ed.  996;  New  Orleans  De- 
benture Redemption  Co.  v.  Louisiana,  180  U.  S.  320,  327,  21  Sup.  Ct,  378, 
45  L.  ed.  550;  Gartside  Coal  Co.  v.  Maxwell  (C.  C),  22  Fed.  197;  Johnson 
V.  Okerstrom,  70  Minn.  303,  73  N.  W.  147;  Tennessee  Automatic  Lighting 
Co.  V.  Massey  (Tenn.  Ch.  App.),  56  S.  W.  35;  Finnegan  v.  Noerenberg,  52 
Minn.  239,  53  N.  W.  1150,  18  L.  R.  A.  778,  38  Am.  St.  Rep.  552;  Doty  v. 
Patterson,  155  Ind.  60,  56  N.  E.  668;  Merchants'  National  Bank  v.  Stone, 
38  Mich.  779;  Gow  v.  Collin  Lumber  Co.,  109  Mich.  45,  66  N.  W.  676,  678; 
Eaton  V.  Aspinwall,  19  N.  Y.  119;  Leonardsville  Bank  v.  Willard,  25  N.  Y. 
574;  Cahall  v.  Citizens'  Mutual  Bldg.  Assn.,  61  Ala.  232;  Fay  v.  Noble,  7 
Cush.  (Mass.)  188,  192,  193;  Snider  Sons'  Co.  v.  Troy,  91  Ala.  224,  8  So. 
658,  11  L.  R.  A.  515,  24  Am.  St.  Rep.  887;  Cochran  v.  Arnold,  58  Pa.  399, 
404;  Lafflin  &  Rand  Powder  Co.  v.  Sinsheimer,  46  Md.  315,  321,  24  Am.  St. 
Rep.  522;  Rutherford  v.  Hill,  22  Oreg.  218,  99  Pac.  946,  17  L.  R.  A.  549, 
29  Am.  St.  Rep.  596.  But  in  every  one  of  these  authorities  articles  of  in- 
corporation had  been  filed  under  a  general  enabling  act,  or  a  charter  had 
been  issued  and  there  had  been  a  user  of  the  franchise  of  the  supposed 
corporation  which  had  been  colorably  created  by  the  filing  of  the  articles  or 
the  issue  of  the  charter  before  the  indebtedness  in  question  was  created, 
while  nothing  of  this  nature  had  been  done  before  the  debt  for  the  $4,700 
which  we  are  now  considering  was  incurred.  The  authorities  which  have 
been  recited  rest  upon  the  proposition  that  where  parties  procure  a  charter 
or  file  articles  of  association  under  a  general  law,  thereby  secure  the  color 
of  a  legal  incorporation,  believe  that  they  are  a  corporation  and  use  the 
supposed  franchise  of  the  corporation  in  good  faith,  and  third  parties  deal 
with  them  as  a  corporation,  they  become  a  corporation  de  facto  and  exempt 
from  individual  liability  to  such  third  parties,  although  there  are  unknown 
defects  in  the  proceedings  for  their  incorporation."  Harrill  v.  Davis  (U.  S. 
C.  C.  A.),  168  Fed.  187,  191,  per  Sanborn,  Cir.  J. 

10  Marsh  v.  Mathias,  19  Utah,  350,  56  Pac.  1074,  11  Am.  &  Eng.  Corp. 
Cas.  (N.  S.)  532. 

When  corporation  is  one  de  facto;  what  constitutes,  see  the  following  cases: 
United  States:  Baltimore  &  Potomac  Rd.  Co.  v.  Fifth  Baptist  Church, 
137  U.  S.  568,  34  L.  ed.  784,  11  Sup.  Ct.  185  (holding  that  at  the  trial  of  an 
action  of  tort  upon  a  plea  of  nul  tiel  corporation,  evidence  that  the  plaintiff, 
after  filing  a  defective  certificate  of  incorporation  under  a  general  corpora- 
tion law,  acted  for  years  as  a  corporation,  and  recovered  a  judgment  as 
such  in  a  similar  action  against  the  defendant  without  anj^  objection  made 
to  its  capacity  to  sue,  is  sufficient  and  competent  to  prove  it  a  corporation 
de  facto  and  entitled  to  maintain  the  action);  Continental  Trust  Co.  v. 
Toledo,  St.  Louis  &  K.  C.  R.  Co.  (U.  S.  C.  C),  82  Fed.  642  (when  con- 
solidated corporation  of  several  States  is  one  de  facto). 

400 


PARTIES   CONTINUED  §  240 

The  right  to  sue  a  raih'oad  corporation  is  held  not  to  rest  as 
a  condition  precedent  upon  compUance  with  statutory  require- 
ments as  to  obtaining  the  certificate  of  railroad  commissioners 
and  the  prepayment  of  an  organization  tax,  even  though 
specified  as  prerequisites  to  the  exercise  of  corporate  powers.^^ 

When  a  legislature  has  full  power  to  create  corporations,  its 
act  recognizing  as  valid  a  cfe  facto  corjooration,  whether  private 
or  municipal,  operates  to  cure  all  defects  in  steps  leading  up 
to  an  organization,-  and  make  a  de  jure  out  of  what  was  before 
only  a  de  facto  corporation.^^    Again,  even  if  a  defect  exists  in 

Alabama:  Owensboro  Wagon  Co.  v.  Bliss,  132  Ala.  253,  31  So.  81,  90  Am, 
St.  Rep.  907;  Harris  v.  Gateway  Land  Co.,  128  Ala.  652,  29  So.  611. 

Connecticut:  Mackay  v.  New  York,  New  Haven  &  Hartford  R.  R.  Co., 
82  Conn.  73,  72  Atl.  583,  586. 

Dakota:  Caledonia  Gold  Min.  Co.  v.  Noonan,  3  Dak.  189  (evidence  held 
sufficient  to  establish  a  corporation  de  facto). 

Georgia:  Brown  v.  Atlanta  Ry.  &  Power  Co.,  113  Ga.  462,  468,  39  S.  E. 
71,  per  Cobb,  J. 

Illinois:  Imperial  Bldg.  Co.  v.  Chicago  Open  Board  of  Trade,  238  111. 
100,  87  N.  E.  167;  Lincoln  Park  Chapter,  R.  A.  M.  No.  177,  v.  Swatek,  105 
111.  App.  604,  aff'd  in  204  111.  228,  68  N.  E.  429;  Joliet,  The,  v.  Frances, 
85  111.  App.  243;  Edwards  v.  Cleveland  Dryer  Co.,  83  111.  App.  643. 

New  Jersey:  McCarter  v.  Ketcham,  72  N.  J.  L.  247,  62  Atl.  693. 

Ohio:  State  v.  Toledo  &  Lucas  County  Burial  Assoc,  28  Ohio  Cir.  Ct.  R. 
397;  Shawnee  &  Sav.  Bank  Co.  v.  Miller,  24  Ohio  Cir.  Ct.  R.  198. 

Oregon:  United  States  Mortgage  Co.  v.  McClure,  42  Oreg.  190,  70  Pac. 
543  (what  is  prima  facie  of  existence). 

South  Dakota:  Mason  v.  Stevens,  16  S.  Dak.  320,  92  N.  W.  424. 

Tennessee:  Tennessee  Automatic  Lighting  Co.  v.  Massey  (Tenn.  Ch. 
App.,  1899),  56  S.  W.  35. 

Wisconsin:  Oilman  v.  Druse,  111  Wis.  400,  87  N.  W.  557;  Slocum  v.  Head, 
105  Wis.  431,  81  N.  W.  673,  50  L.  R.  A.  324. 

When  corporation  is  not  one  de  facto,  see  Duke  v.  Taylor,  37  Fla.  64,  19 
So.  172,  3  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  261,  31  L.  R.  A.  484;  Middle  Branch 
Mut.  Telephone  Co.  v.  Jones,  137  Iowa,  396,  115  N.  W.  3;  Louisiana  Nat. 
Bank  v.  Henderson,  116  La.  413,  40  So.  779;  Card  v.  Moore,  74  N.  Y.  Supp. 
18,  68  App.  Div.  327,  aff'd  m  173  N.  Y.  598,  66  N.  E.  1105;  Whaley  v. 
Bankers'  Union  (Tex.  Civ.  App.,  1905),  88  S.  W.  259. 

Essentials  to  constitute  corporation  de  facto,  see  Stanwood  v.  Sterling  Metal 
Co.,  107  111.  App.  569. 

11  Muehlenbeck  v.  Babylon  &  N.  S.  R.  Co.,  55  N.  Y.  Supp.  1023,  26  Misc. 
136. 

12  Commanche  County  v.  Lewis,  133  U.  S.  198,  33  L.  ed.  604,  10  Sup. 
Ct. . 

26  401 


§  247  PARTIES    CONTINUED 

proceedings  for  an  incorporation,  the  defect  may  be  cured  by 
subsequent  legislation.^^ 

§  247.  Collateral  Attack — De  Facto  Corporation — Es- 
toppel to  Deny  Legal  Corporate  Existence. 

It  may  be  generally  stated  here  that  a  de  facto  corporation 
cannot  be  made  the  subject  of  a  collateral  attack  in  a  private 
suit,  and  can  only  be  questioned  in  a  direct  proceeding  brought 
for  that  purpose.^'* 

13  Smith  V.  Haven's  Relief  Fund  Society,  103  N.  Y.  Supp.  770,  118  App. 
Div.  67S,  afl'd  in  (mem.)  190  N.  Y.  557,  83  N.  E.  1132.  See  also  Brown  v. 
Atlanta  Railway  &  Power  Co.,  113  Ga.  642,  .39  S.  E.  71. 

14  United  States:  Miller  v.  Perris  Irrig.  Dist.  (U.  S.  C.  C),  85  Fed.  693; 
Louisville  Trust  v.  Louisville,  Nashville,  A.  &  C.  R.  Co.  (U.  S.  C.  C.  A.), 
84  Fed.  539,  56  U.  S.  App.  208,  28  C.  C.  A.  202;  Continental  Trust  Co.  v. 
Toledo,  St.  Louis  &  K.  C.  R.  Co.  (U.  S.  C.  C),  82  Fed.  642.  See  Harrill  v. 
Davis  (U.  S.  C.  C.  A.),  168  Fed.  187. 

Alabama:  First  Nat.  Bank  v.  Henry  (Ala.,  1906),  49  So.  97;  Owensboro 
Wagon  Co.  v.  Bliss,  132  Ala.  253,  31  So.  81,  90  Am.  St.  Rep.  907;  Harris  v. 
Gateway  Land  Co.,  128  Ala.  652,  29  So.  611. 

California:  California  Cured  Fruit  Ass'n  v.  Stellings,  141  Cal.  713,  75 
Pac.  320;  Raphael  Weill  &  Co.  v.  Crittenden,  139  Cal.  488,  73  Pac.  238; 
People  V.  Linda  Vista  Irrig.  Dist.,  128  Cal.  477,  61  Pac.  86;  Los  Angeles 
Holiness  Band  v.  Spires,  126  Cal.  541,  58  Pac.  1049. 

Connecticut:  Fish  v.  Smith,  73  Conn.  377,  47  Atl.  711. 

Delaware:  Wilmington,  City  of,  v.  Addicks,  7  Del.  Ch.  56,  8  Del.  Ch.  310, 
43  Atl.  297. 

Illinois:  Gillette  v.  Aurora  Ry.'s  Co.,  228  111.  261,  81  N.  E.  1005  (rule 
stated  but  qualified  in  the  case  of  the  power  of  a  railroad  corporation  to 
condemn  land);  Stanwood  v.  Sterling  Metal  Co.,  107  111.  App.  569;  Lincoln 
Park  Chapter,  R.  A.  M.  No.  177,  v.  Swatek,  105  111.  App.  604,  aff'd  in  204 
111.  228,  68  N.  E.  429. 

Indiana:  Clark  v.  American  Cannel  Coal  Co.,  165  Ind.  213,  73  N.  E.  1083; 
Baker  v.  Neff,  73  Ind.  68;  Cleveland,  C.  C.  &  St.  Louis  Ry.  Co.  v.  Feight,  41 
Ind.  App.  416,  84  N.  E.  15. 

Kansas:  Short,  In  re,  47  Kan.  250,  27  Pac.  1005. 

Maine:  Seven  Star  Grange,  Patrons  of  Husbandry  No.  73,  v.  Ferguson, 
98  Me.  176,  56  Atl.  648.  See  Taylor  v.  Portsmouth,  K.  &  Y.  St.  Ry.  Co., 
91  Me.  193,  39  Atl.  560,  64  Am.  St.  Rep.  216. 

Nebraska:  Otoe  County  Fair  &  Driving  Assoc,  v.  Doman,  1  Neb.  Unofif. 
179,  95  N.  W.  .327. 

New  Jersey:  Bell  v.  Pennsylvania,  S.  &  N.  E.  R.  Co.,  10  N.  J.  L.  336. 

New  York:  Geneva  Mineral  Springs  Co.  v.  Coursey,  61  N.  Y.  Supp.  98. 

Pennsylvania:  Monongahela  Bridge  Co.  v.  Pittsburgh  &  B.  Traction  Co., 
196  Pa.  St.  25,  46  Atl.  99,  79  Am.  St.  Rep.  685. 

402 


PARTIES   CONTINUED  §  247 

The  facts  necessary  to  constitute  a  corporation  de  facto  may, 
however,  be  required  to  be  shown.^^ 

And  as  there  cannot  be  a  de  facto  corporation  where  there 
cannot  be  one  de  jure,  then,  if  there  is  no  law  under  which  a 
corporation  de  jure  can  exist,  there  may  be  a  collateral  attack 
upon  the  existence  of  a  de  facto  corporation.^^ 

Again,  the  law  that  corporate  existence  cannot  be  inquired 
into,  except  by  judicial  proceedings  in  the  name  of  the  State,  does 
not  apply  to  a  pretended  but  not  even  a  de  facto  corporation.^^ 

The  rule  which  precludes  a  collateral  attack  upon  corporate 
existence  is  founded  in  public  policy  and  is  not  to  be  so  applied 
as  to  defeat  the  assertion  of  just  legal  rights  by  parties  in  the 
courts.  It  is  said  that  it  is  essential  to  the  doctrine  that  there 
be  in  existence  a  law  by  virtue  of  which  a  corporation  might 
legally  exist  and  "that  the  rule  is  the  same  where  there  is  only 
an  unconstitutional  law."  Even  this  qualification  of  the  rule 
seems  to  be  subject  to  the  exceptions  apphcable  in  cases 
where  the  attacking  party  sustains  certain  relations  to  the  al- 
leged corporation  or  has  no  right  of  his  own  to  be  protected 
by  allowing  the  inquiry.^* 

Although  the  doctrine  precluding  a  collateral  attack  upon 

W'i^consin:  Oilman  v.  Druse,  111  Wis.  400,  87  N.  W.  557. 

15  Stanwood  v.  Sterling  Metal  Co.,  107  111.  App.  569. 

18  Clark  V.  American  Cannel  Coal  Co.,  165  Ind.  213,  73  N.  E.  1083.  See 
also  Imperial  Building  Co.  v.  Chicago  Open  Board  of  Trade,  238  111.  100, 
87  N.  E.  167,  distinguishing  Patterson  v.  Northern  Trust  Co.,  230  111.  341, 
82  N.  E.  837,  and  231  111.  28,  82  N.  E.  840,  121  Am.  St.  Rep.  299. 

See  as  to  first  point  in  text  the  following  cases: 

UnUed  States:  Davis  v.  Stevens  (U.  S.  D.  C),  104  Fed.  235. 

Colorado:  Jones  v.  Aspen  Hardware  Co.,  21  Colo.  263,  40  Pac.  457,  29 
L.  R.  A.  143. 

Georgia:  Brown  v.  Atlanta  Ry.  &  Power  Co.,  113  Ga.  462,  468,  39  S.  E. 
71,  per  Cobb,  J. 

Michigan:  Eaton  v.  Walker,  76  Mich.  579,  43  N.  W.  638,  6  L.  R.  A.  102. 

Texas:  McLeary  v.  Dawson,  87  Tex.  524,  29  S.  W.  1044. 

17  Huber  v.  Martin,  127  Wis.  412,  105  N.  W.  1031,  1135,  115  Am.  St.  Rep. 
1023,  3  L.  R.  A.  (N.  S.)  653. 

18  Parks  V.  West  (Tex.,  1908),  111  S.  W.  726.  The  court,  per  Williams,  J., 
said :  "  But  it  is  urged  that  the  attack  of  plaintiffs  is  upon  the  corporate  exist- 
ence of  the  Mertins  school  district  in  a  collateral  proceeding,  and  that  the 
validity  of  such  incorporation  can  be  questioned  only  by  the  State  in  a 

403 


§  247  PARTIES   CONTINUED 

corporate  existence  is  often  applied  to  de  facto  corporations, 
or  is  usually  applied  by  reason  of  some  defect  or  irregularity 
in  organization,  still  the  circumstances  surrounding  the  deal- 
ing or  contracting  with  a  corporation  may  be  such,  or  the  at- 
tacking party  may  sustain  such  a  relation  to  the  corporation 
as  to  create  an  estoppel  and  preclude,  in  a  suit  between  the 
corporation  and  a  private  party,  the  denial  of  corporate  ex- 
istence, or  the  setting  up  an  irregularity  or  defect  in  corporate 
organization.^^ 

direct  proceeding.  Such  a  proposition  is  often  applied  in  favor  of  de  facto 
corporations,  and  it  is  sometimes  difficult  to  determine  its  exact  scope  and 
application.  El  Paso  v.  Ruckman,  92  Tex.  86,  46  S.  W.  25;  Brennan  v. 
City  of  Weatherford,  53  Tex.  331,  37  Am.  St.  Rep.  758;  Graham  v.  City  of 
Greenville,  67  Tex.  62,  2  S.  W.  742.  Usually  it  is  applied  where  the  attack 
is  because  of  some  defect  in  organization  under  a  law  by  virtue  of  which 
such  a  corporation  could  lawfully  exist.  Sometimes  the  attacking  party 
sustains  such  relation  to  the  corporation  as  to  estop  him  from  questioning 
its  corporate  existence  and  there  are  other  cases  in  which  it  is  not  essential 
to  the  protection  of  any  right  of  his  that  inquiry  should  be  made  into  the 
validity  of  the  incorporation." 

19  United  States:  Chubb  v.  Upton,  95  U.  S.  665,  24  L.  ed.  523  (cited  in 
Bailey  v.  Tillinghast,  99  Fed.  808;  First  Nat.  Bank  of  Concord  v.  Hawkins, 
79  Fed.  52;  Laredo  Imp.  Co.  v.  Stevenson,  66  Fed.  636),  compare  McCormick 
V.  Market  Bank,  165  U.  S.  538,  17  Sup.  Ct.  433,  995,  41  L.  ed.  817  [a  case  of 
absence  of  authority  of  a  national  bank  to  commence  banking  business  and 
the  invalidity  of  a  lease;  not  made  good  by  estoppel  (cited  in  Seeberger  v. 
McCormick,  175  U.  S.  274,  278,  44  L.  ed.  161,  20  Sup.  Ct.  128;  De  la  Vergne 
Refrigerating  M.  Co.  v.  German  Sav.  Inst.,  175  U.  S.  40,  59,  20  Sup.  Ct.  20, 
44  L.  ed.  65;  Concord  First  Nat.  Bank  v.  Hawkins,  174  U.  S.  364,  371,  19 
Sup.  Ct.  739,  43  L.  ed.  1007;  California  Bank  v.  Kennedy,  167  U.  S.  362, 
367,  42  L.  ed.  198,  17  Sup.  Ct.  831;  East  St.  Louis  Connecting  Ry.  Co.  v. 
Jarvis,  92  Fed.  744)J;  Western  Bank  &  Trust  Co.,  In  re  (U.  S.  D.  C),  163 
Fed.  713;  Rannels  v.  Rowe,  145  Fed.  296;  Old  Colony  Trust  Co.  v.  Wichita, 
123  Fed.  762,  aff'd  132  Fed.  641;  W.  L.  Wells  Co.  v.  Avon  Mills,  118  Fed. 
190,  atf'd  148  Fed.  1018,  s.  c,  198  U.  S.  177,  40  L.  ed.  1003,  25  Sup.  Ct.  640; 
Deitch  V.  Staub,  115  Fed.  309;  American  AlkaH  Co.  v.  Campbell,  113  Fed. 
398;  Manship  v.  New  South  Bldg.  &  Loan  Assoc,  110  Fed.  845;  Cunning- 
ham V.  City  of  Cleveland,  98  Fed.  657,  39  C.  C.  A.  211,  s.  c,  127  Fed.  667, 
s.  c,  152  Fed.  908;  Millar  v.  Ferris  Irrig.  District,  85  Fed.  693. 

Alabama:  Greenville,  City  of,  v.  Greenville  Waterworks  Co.,  125  Ala. 
625,  27  So.  764. 

California:  Truckee  &  Tahoe  Turnpike  R.  Co.  v.  Campbell,  44  Cal.  89. 

Colorado:  Plummer  v.  Struby-Estabrooke  Mercantile  Co.,  23  Colo.  190, 
47  Pac.  294. 

Georgia:  Collins  v.  Citizens'  Bank  &  Trust  Co.,  121  Ga.  513,  49  S.  E.  594; 

404 


PARTIES   CONTINUED  §  247 

The  fact,  however,  that  a  plaintiff  has,  in  a  previous  suit, 
recognized  defendants  as  forming  a  company,  without  any 
reference  to  its  having  been  regularly  incorporated,  is  not 

Etowah  Milling  Co.  v.  Crenshaw,  116  Ga.  406,  42  S.  E.  709;  Petty  v.  Bruns- 
wick &  Western  Ry.  Co.,  109  Ga.  666,  35  S.  E.  82. 

Illinois:  Dubs  v.  Egli,  167  111.  514,  47  N.  E.  766;  Smith  v.  Mayfield,  16:} 
111.  447,  45  N.  E.  157;  Eggert  v.  Cleveland,  138  111.  App.  434;  Spreyne  v. 
Garfield  Lodge  of  United  Slavonian  Benev.  Soc.  No.  1,  117  111.  App.  253. 

Iowa:  State  Security  Bank  v.  Hoskins,  130  Iowa,  339,  100  N.  W.  764; 
Seaton  v.  Grimm,  110  Iowa,  145,  81  N.  W.  225;  Grand  Lodge  Ancient  Order 
U.  W.  v.  Graham,  96  Iowa,  592,  65  N.  W.  837,  31  L.  R.  A.  133. 

Kentucky:  Tanner  v.  Nichols,  25  Ky.  L.  Rep.  2191,  80  S.  W.  225.  See 
Calor  Oil  &  Gas  Co.  v.  Franzell,  33  Ky.  L.  Rep.  98,  109  S.  W.  328. 

Louisiana:  Pattison  v.  Gulf  Bag  Co.,  116  La.  963,  41  So.  224. 

Maine:  Seven  Star  Grange,  Patrons  of  Husbandry  No.  73,  v.  Ferguson, 
98  Me.  176,  56  Atl.  648;  Taylor  v.  Portsmouth,  K.  &  Y.  Street  R.  Co.,  91 
Me.  193,  39  Atl.  560. 

Michigan:  Niles,  City  of,  v.  Benton  Harbor,  St.  Joe  Ry.  &  Light  Co.,  154 
Mich.  378,  15  Det.  Leg.  N.  757,  117  N.  W.  937;  Gow  v.  Collin  &  P.  Lumber 
Co.,  109  Mich.  45,  66  N.  W.  676,  3  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  615,  2  Det. 
L.  N.  1007.  See  Wyandotte  Electric  Light  Co.  v.  City  of  Wyandotte,  124 
Mich.  43,  7  Det.  Leg.  N.  1111,  82  N.  W.  821. 

Minnesota:  Hause  v.  Mannheimer,  67  Minn.  194,  69  N.  W.  810,  5  Am.  & 
Eng.  Corp.  Cas.  (N.  S.)  619. 

Mississippi:  Johnston  v.  Gumbel  (Miss.),  19  So.  100. 

Missouri:  West  Missouri  Land  Co.  v.  Kansas  City  S.  B.  Co.,  161  Mo.  595, 
61  S.  W.  847.    See  School  District  v.  Hodgin,  180  Mo.  70,  79  S.  W.  148. 

Nebraska:  Crete  Building  &  Loan  Assoc,  v.  Patz  (Neb.,  1901),  95  N.  W. 
793;  Otoe  County  Fair  &  Driving  Park  Assoc,  v.  Doman,  1  Neb.  Unoff.  179, 
95  N.  W.  327;  Livingston  Loan  &  Bldg.  Assoc,  v.  Drummond,  49  Neb.  200, 
68  N.  W.  375;  Nebraska  Nat.  Bank  v.  Ferguson,  49  Neb.  109,  68  N.  W.  370. 

New  Jersey:  Campbell  v.  Perth  Amboy  Ship-Building  &  Engineering  Co., 
70  N.  J.  Eq.  40,  62  Atl.  319,  aff'd  in  71  N.  J.  Eq.  302;  Bell  v.  Pennsylvania, 
S.  &  N.  E.  R.  Co.  (N.  J.),  10  Atl.  741. 

New  Mexico:  Palatine  Ins.  Co.,  Ltd.,  of  Manchester,  Eng.,  v.  Santa  Fe 
Mercantile  Co.  (N.  M.,  1905),  82  Pac.  363. 

New  York:  Green  v.  Grigg,  90  N.  Y.  Supp.  565,  98  App.  Div.  445;  United 
Growers  Co.  v.  Eisner,  47  N.  Y.  Supp.  906,  22  App.  Div.  1,  15  Nat.  Corp. 
Rep.  661. 

Ohio:  Hatry  v.  Painesville  &  Y.  Ry.  Co.,  1  Ohio  C.  D.  238;  Lattimer  v. 
Mosaic  Glass  Co.,  13  Ohio  C.  C.  163. 

Oregon:  Hackett  v.  Wilson,  12  Oreg.  25,  6  Pac.  652. 

Pennsylvania:  Monongahela  Bridge  Co.  v.  Pittsburg  &  Birmingham 
Traction  Co.,  196  Pa.  St.  25,  46  Atl.  99;  Commonwealth  v.  Philadelphia 
County,  193  Pa.  St.  236,  44  Atl.  336;  Twelfth  St.  Market  Co.  v.  Philadelphia 
&  Reading  R.  Co.,  142  Pa.  St.  580,  581,  21  Atl.  989;  Goodbread  v.  Philadel- 
phia, B.  &  B.  M.  Tump.  Co.,  15  Mont.  Co.  L.  Rep.  21;  Olyphant  Sewage- 

405 


§  247  PARTIES   CONTINUED 

such  an  admission  as  will  estop  him  from  showing  that  the 
company  has  no  legal  existence  as  a  corporation.  In  order  to 
estop  him  there  should  at  least  be  an  admission  that  the  com- 
pany was  entitled  to  exercise  corporate  rights  and  privileges.^" 
Again,  while  the  forfeiture  of  a  corporate  franchise  cannot 
be  collaterally  taken  advantage  of  in  a  private  action,  still  one 
sued  for  bridge  tolls  by  a  corporation  may  defend  on  the  ground 
that  the  period  of  assent  b}^  the  supervisors  to  the  exercise  by 
the  corporation  of  the  franchise  of  taking  tolls  has  expired; 
for  this  is  not  a  question  of  corporate  existence.  The  franchise 
of  being  a  corporation  may  continue  to  exist  although  any  par- 
ticular franchise  annexed  to  it  may  have  been  surrendered  or 
forfeited.^^ 

Drainage  Co.  v.  Borough  of  Olyphant,  5  Lack.  Leg.  N.  346.  Compare 
Windsor  Glass  Co.  v.  Carnegie  Co.,  204  Pa.  St.  459,  54  Atl.  329. 

Wisconsin:  Clausen  v.  Head,  110  Wis.  405,  85  N.  W.  1028. 

What  is  not  evidence  of  want  of  legal  corporate  existence;  fraud  of  third  party 
in  wrecking  corporation.  See  Boatmen's  Bank  v.  Gillespie,  209  Mo.  217, 
108  S.  W.  74. 

20  Spencer  Field  &  Co.  v.  Cooks,  16  La.  Ann.  153. 

21  Grand  Rapids  Bridge  Co.  v.  Prange,  35  Mich.  400,  404,  24  Am.  St.  Rep. 
585. 

When  no  estoppel  to  deny  corporate  existence  or  to  set  up  irregularity  of 
organization,  see  the  following  cases: 

United  States:  Harrill  v.  Davis  (U.  S.  C.  C.  A.),  168  Fed.  187,  195. 

Delaware:  Wilmington  City  Ry.  Co.  v.  Wilmington  &  B.  S.  Ry.  Co.  (Del. 
Ch.,  1900),  46  Atl.  12. 

Illinois:  Kanawha  Dispatch  Line  v.  Fish,  219  111.  236,  76  N.  E.  352, 
rev'g  Fish  v.  Kanawha  Dispatch  Line,  118  111.  284. 

Louisiana:  Louisiana  Nat.  Bank  v.  Henderson,  116  La.  413,  40  So.  779; 
Provident  Bank  &  Trust  Co.  v.  Saxon,  116  La.  408,  40  So.  778. 

Maryland:  Maryland  Tube  &  Iron  Works  v.  West  End  Improv.  Co.,  87 
Md.  207,  39  L.  R.  A.  810,  39  Atl.  620  (holding  that  the  valid  existence  of  a 
corporation  may  be  raised  collaterally,  and  its  legal  existence  may  alwayf^ 
be  made  the  subject  of  inquiry). 

Minnesota:  Byronville  Creamery  Assoc,  v.  Ivers,  93  Minn.  8,  100  N.  W.  387. 

Missouri:  Florscheim  &  Co.  v.  Fry,  109  Mo.  App.  487,  84  S.  W.  1023. 

New  York:  Card  v.  Moore,  74  N.  Y.  Supp.  18,  68  App.  Div.  327,  aff'd  in 
173  N.  Y.  598,  66  N.  E.  1105. 

Pennsylvania:  See  Windsor  Glass  Co.  v.  Carnegie  Co.,  204  Pa.  St.  459,  54 
Atl.  329. 

When  corporate  existence  subject  to  collateral  attack,  see  Christian  & 
Craft  Grocery  Co.  v.  Fruitdale  Lumber  Co.,  121  Ala.  340,  25  So.  566. 

406 


PARTIES   CONTINUED  §  248 

§  248.  Same  Subject — Instances. 

One  who  contracts  with  a  corporation  as  such  is  estopped  to 
afterwards  avoid  the  obhgations  so  assumed  by  him  on  the 
ground  that  the  supposed  corporation  was  not  one  de  jure?'^ 

And  where  a  raih'oad  company  has  been  a  corporation  (k 
facto  from  the  date  of  its  organization,  its  existence  and  its 
abihty  to  contract  cannot  be  called  in  question  in  a  suit 
brought  upon  evidence  of  debt  given  to  it.^^ 

So  where  the  required  number  of  individuals  attempt  in 
good  faith  to  organize  a  corporation,  and  for  that  purpose 
sign  articles  of  incorporation  which  contain  substantially  the 
provisions  required  by  the  statute,  and  file  the  same  with  the 
county  clerk  of  the  proper  county  and  proceed  to  do  business 
as  a  corporation  in  the  name  adopted  by  the  articles,  one  who 
transacts  business  with  such  company  in  its  corporate  name 
will  not  be  allowed  to  deny  its  existence  as  a  corporation  de 
facto;  and  if,  in  an  action  against  the  company  in  its  corpo- 
rate name  he  attaches  its  property  upon  a  claim  arising  from 
business  so  transacted,  he  will  not  be  allowed  to  deny  that  the 
business  of  the  company  was  conducted  by  it  in  its  corporate 
capacity.^'* 

If  a  party  does  business  with  a  corporation  in  its  corporate 
name,  and  the  contract  is  executed  on  its  behalf,  such  party 
is  estopped  from  denying  the  incorporation  of  the  company .^^ 

Again,  where  a  bank,  prior  to  its  failure,  had  taken  steps  to 
extend  its  corporate  existence  under  a  statute  ^^  authorizing 
the  extension  of  Hfe  of  corporations,  and  had  thereafter  op- 
erated and  been  treated  as  a  banking  association  legally  or- 
ganized, both  by  the  pubhc  and  the  State  government,  a  bor- 

22  Andes  v.  Ely,  158  U.  S.  312,  39  L.  ed.  996,  15  Sup.  Ct.  954. 

23  Douglas  County  v.  Bolles,  94  U.  S.  104,  24  L.  ed.  146.  See  Toledo 
St.  Louis  &  K.  C.  R.  Co.  v.  Continental  Trust  Co.,  95  Fed.  507. 

24  Lincoln  Butter  Co.  v.  Edwards-Bradford  Lumber  Co.,  76  Neb.  477, 
107  N.  W.  797. 

25  Toledo  Computing  Scale  Co.  v.  Young,  16  Idaho,  187,  101  Pac.  257, 
citing  Bank  of  Shasta  v.  Boyd,  99  Cal.  604,  34  Pac.  337;  First  Congregational 
Church  V.  Grand  Rapids  Fur  Co.,  15  Colo.  App.  46,  60  Pac.  948;  Grande 
Ronde  Lumber  Co.  v.  Cotton,  12  Colo.  App.  375,  55  Pac.  610. 

28  1  Gen.  Stat.  N.  J.  972,  §  302. 

407 


§  249  PARTIES   CONTINUED 

rower,  was  estopped,  in  an  action  by  the  bank's  receiver  to 
foreclose  certain  mortgages  securing  certain  loans,  to  allege 
that  at  the  time  the  loans  were  made  the  bank  had  no  legal 
corporate  existence.^^ 

In  another  case  the  defendant  was  a  member  of  one  of  three 
informal  mutual  telephone  associations,  a  portion  of  whose 
members  agreed  upon  consolidation  and  the  adoption  of  ar- 
ticles of  incorporation,  and  elected  officers  and  directors. 
Prior  to  incorporation  the  proposed  directors  contracted  with 
an  existing  telephone  company  for  joint  operation  of  their 
lines,  but  upon  subsequent  disagreements  the  defendant  and 
another  proposed  director  refused  to  act  further  and  the  board 
attempted  to  fill  their  places.  The  reorganized  board  levied 
an  assessment  for  incorporation  and  other  expenses  which  de- 
fendant and  others  refused  to  pay.  Afterwards  articles  of 
incorporation  were  signed  and  filed  by  one  member  from  each 
of  two  of  the  original  associations  and  two  from  the  third,  but 
the  articles  did  not  include  or  recognize  as  members  all  who 
previously  attempted  to  act  as  directors,  and  did  not  ratify 
their  action.  It  was  held  that  the  attempted  assessment 
could  not  be  enforced  against  the  defendant  on  the  theory  that 
there  was  a  de  facto  corporation;  and  never  having  partici- 
pated in  the  levy  of  the  assessment,  the  work  of  incorporation 
or  its  benefits,  he  was  not  estopped  to  question  the  validity 
of  the  organization  or  the  assessment.^* 

§  249.  Collateral  Attack— State  or  Public  Officials  as 
Parties — De  Facto  Corporation — Instances. 

A  railroad  corporation  cannot  question  the  right  of  another 
railroad  company  to  exercise  the  powers  conferred  upon  it  by 
statute  as  only  the  State  can  test  such  corporate  authority .^^ 
So  the  invalidity  of  the  charter  of  a  street  railroad  company  is 
a  question  which  can  be  raised  only  by  the  State,  as  a  private 

27  Campbell  v.  Perth  Amboy  Shipbuilding  &  Engineering  Co.,  70  N.  J.  Eq. 
40,  62  Atl.  319,  aff'd  in  71  N.  J.  Eq.  302,  71  Atl.  1133. 

28  Middle  Branch  Mut.  Telephone  Co.  v.  Jones,  137  Iowa,  396,  115  N.  W.  3. 

29  Terre  Haute  &  I.  R.  Co.  v.  Peoria  &  P.  U.  R.  Co.,  167  111.  296,  47  N.  E. 
513,  aff'g  61  111.  App.  405. 

408 


PARTIES   CONTINUED  §  249 

person  cannot  set  up  such  a  claim .^"  If  a  railroad  company 
fails  to  complete  its  road  within  the'  time  required  by  statute, 
the  suit  for  the  breach  of  such  duty  or  the  right  to  enforce  the 
same  must  be  exercised  by  the  State  alone  .^^ 

Again,  on  a  bill  by  a  toll-road  company  to  restrain  unlawful 
interference  by  the  toll-road  commissioner  with  its  exercise  of 
its  franchises,  a  claim  by  defendant  that  complainant  does 
not  come  into  court  with  clean  hands,  for  the  reason  that  it 
did  not  complete  its  road,  keep  it  in  repair,  nor  file  its  annual 
report,  as  required  by  the  statute,  is  untenable  since  only  the 
State,  in  some  proper  proceeding,  can  question  complainant's 
right  to  exercise  its  franchises.^^  So  the  power  of  a  corporation 
under  the  law  by  which  it  is  created  to  purchase  a  particular 
character  of  property  cannot  be  questioned  in  an  action  be- 
tween it  and  another  corporation  or  person.  It  is  a  question 
between  the  corporation  and  the  State,  to  be  determined  in  a 
proceeding  by  the  latter  for  a  forfeiture  .^^ 

The  validity  of  corporate  existence  cannot  be  attacked  col- 
laterally in  an  action  by  a  testimentary  trustee  holding  a  trust 
estate  for  the  benefit  of  that  institution  asking  a  determina- 
tion of  the  validity  of  the  trust  and  for  a  settlement  of  his 
accounts.  The  question  of  the  legal  existence  of  the  corpora- 
tion can  only  be  raised  by  the  sovereign  power  to  which  the 
corporation  owes  its  life  in  some  proceeding  for  that  purpose 
brought  by  and  on  behalf  of  the  sovereignty  itself.^"* 

Where  a  corporation  exists  de  facto  it  may  exercise  the 
powers  assumed,  and  the  question  of  its  having  a  right  to  ex- 
ercise them  is  one  which  can  only  be  raised  by  the  State.^^ 

But  although  the  statute  of  a  State  makes  certain  provisions 

30  Taylor  v.  Portsmouth,  K.  &  Y.  Street  R.  Co.,  91  Me.  193,  39  Atl.  560. 

31  Cincinnati,  H.  &  I.  R.  Co.  v.  Clifford,  113  Ind.  460,  15  N.  E.  524. 

32  Gravel  Road  Co.  v.  Hogadone,  150  Mich.  638,  14  Det.  Leg.  N.  851, 
114  N.  W.  917;  Besson  v.  Crapo,  150  Mich.  655,  14  Det.  Leg.  N.  858,  114 
N.  W.  924. 

3:*  California  State  Teleg.  Co.  v.  Alta  Teleg.  Co.,  22  Cal.  398,  per  Cope,  C.  J. 

34  Smith  V.  Haven's  Relief  Fund  Society,  103  N.  Y.  Supp.  770,  118  App. 
Div.  678,  aff'd  in  (mem.)  190  N.  Y.  557,  83  N.  E.  1132. 

35  Board  of  Education  v.  Berry,  62  W.  Va.  433,  125  Am.  St.  Rep.  975, 
59  S.  E.  169. 

409 


§  250  PARTIES   CONTINUED 

whereby  the  attorney-general  is  to  bring  actions  against  ben- 
efit societies  such  enactments  will  not  be  exclusive  where  it 
does  not  preclude  controversies  between  officers  and  members 
in  relation  to  the  fundamental  law  of  the  society .^^ 

§  250.  State  or  State  Officers  as  Indispensable  or  Proper 
Parties  Defendant  in  Suits  by  Corporation. 

A  State  is  an  indispensable  party  to  any  proceeding  in  equity 
in  which  its  property  is  sought  to  be  taken  and  subjected  to 
the  payment  of  its  obligations.  Thus,  a  State  subscribed  for 
capital  stock  in  a  railway  company  which  had  been  incorpo- 
rated by  its  legislature,  issued  its  bonds  with  thirty  years  to 
run,  sold  them,  and  with  the  proceeds  paid  its  subscription, 
and  received  certificates  of  stock  therefor,  which  certificates 
it  never  parted  with  and  held  at  the  time  of  the  suit.  In  the 
act  incorporating  the  company  and  authorizing  the  issue  of 
the  bonds,  it  was  provided  that  as  security  for  their  redemp- 
tion ''the  pubhc  faith  of  the  State"  "is  hereby  pledged  to  the 
holders,"  "and  in  addition  thereto  all  the  stock  held  by  the 
State"  in  the  railroad  company  "shall  be  pledged  for  that 
purpose"  and  that  "any  dividend"  on  the  stock  "shall  be  ap- 
phed  to  the  payment  of  the  interest  accruing  on  said  coupon 
bonds."  The  State  being  in  default  in  the  payment  of  the  in- 
terest due  on  bonds  for  twenty  years,  a  bondholder  who  was  a 
citizen  of  another  State,  brought  suit  in  the  Circuit  Court  of 
the  United  States  in  the  State  issuing  said  bonds  against  the 
railroad  company,  its  president  and  directors,  the  person 
holding  the  proxy  of  the  State  upon  the  stock  held  by  it,  and 
the  treasurer  of  the  State,  praying  to  have  the  complainant's 
bonds  decreed  to  be  a  hen  upon  the  stock  owned  by  the  State 
and  upon  any  dividends  that  might  be  declared  thereon,  and 
that  such  dividends  might  be  paid  to  complainant  and  to  such 
bondholders  as  might  join  in  the  suit,  and  for  the  sale  of  the 
stock  if  the  dividends  should  prove  insuflficient,  and  for  an  ac- 
count, and  for  the  appointment  of  a  receiver,  and  for  an  in- 

38  Bastian  v.  Modern  Woodmen  of  America,  166  111.  595,  46  N.  E.  1090, 
rev'g  68  111.  App.  :37S, 
410 


PARTIES   CONTINUED  §  250 

junction.  It  was  held  that  as  the  State  was  an  indispensable 
party  to  the  suit  the  bill  must  be  dismissed. ^^  And  where  a 
corporation  seeks  to  establish  the  lease  of  a  railroad  to  it  the 
governor  and  attorney-general  of  a  State  are  proper  parties  to 
the  suit,  where  their  adverse  acts  are  an  endeavor  to  use  the 
name  of  the  State  as  stockholders  in  a  private  corporation 
to  set  aside  its  acts  and  they  are  the  owners  of  a  majority  of 
the  stock  of  the  lessor  railroad  and  have  appointed  a  majority 
of  its  directors.  In  such  a  case  their  acts  are  not  an  exercise 
of  the  functions  of  sovereignty.^^  So  where  a  bill  was  brought 
by  the  Bank  of  the  United  States,  for  the  purpose  of  protecting 
it  in  the  exercise  of  its  franchises  which  were  threatened  to  be 
invaded,  under  unconstitutional  laws  of  a  State,  it  was  held 
that  as  the  State  itself  could  not,  under  the  Eleventh  Amend- 
ment of  the  Federal  Constitution,  be  made  a  party  defendant 
to  the  suit,  it  could  be  maintained  against  the  officers  and 
agents  of  the  State,  who  were  intrusted  with  the  execution  of 
such  laws.^^ 

A  suit  may  be  brought  by  a  foreign  corporation  doing  busi- 
ness both  interstate  and  intrastate  against  a  Secretary  of  State 
to  obtain  a  decree  that  a  statute  of  such  State,  to  permit  for- 
eign corporations  to  do  business  therein  and  fixing  fees  to  be 
paid  by  all  corporations,  is  unconstitutional  and  void  and  also 
to  enjoin  the  defendant  in  his  official  capacity  from  attempting 
to  revoke  the  authority  of  the  plaintiff  corporation  to  do 
business  in  the  State  or  from  proclaiming  through  official  news- 
paper pubHcations  that  he  had  revoked  such  authority.  Such 
a  statute  is  unconstitutional  and  such  an  injunction  will  be 
granted  and  the  suit  is  not  an  action  against  the  State  within 
the  meaning  of  the  Eleventh  Amendment.'*" 

Whenever  it  is  clearly  seen  that  the  State  is  an  indispen- 

37  Christian  v.  Atlantic  &  N.  C.  Rd.  Co.,  133  U.  S.  233,  33  L.  ed.  589, 
10  Sup.  Ct.  260. 

38  Southern  R.  Co.  v.  North  Carohna  Rd.  Co.  (U.  S.  C.  C),  81  Fed.  595. 

39  Osbom  V.  United  States  Bank,  9  Wheat.  (22  U.  S.)  738,  6  L.  ed.  204. 
40Ludwig  V.  Western  Union  Teleg.  Co.,  216  U.  S.  146,  30  Sup.  Ct.  , 

54  L.  ed.  .    See  also  Western  Union  Teleg.  Co.  v.  Andrews,  216  U.  S. 

165,  54  L.  ed. ,  30  Sup.  Ct. . 

411 


§  251  PARTIES   CONTINUED 

sable  party  to  enable  the  court,  according  to  the  rules  which 
govern  its  procedure,  to  grant  the  relief  sought,  it  will  refuse 
to  take  jurisdiction;  and  where  the  facts  in  the  bill  show  that 
the  State  is  so  interested  in  the  property  that  final  relief  can- 
not be  granted  without  making  it  a  party  the  court  is  without 
jurisdiction.  This  applies  to  the  following  facts:  The  State 
of  Georgia  indorsed  the  bonds  of  a  railroad  company,  taking 
a  hen  upon  the  railroad  as  security.  The  company  faihng  to 
pay  interest  upon  the  indorsed  bonds,  the  governor  of  the  State 
took  possession  of  the  road,  and  put  it  into  the  hands  of  a  re- 
ceiver, who  made  a  sale  of  it  to  the  State.  The  State  then 
took  possession  of  it,  and  took  up  the  indorsed  bonds,  substi- 
tuting the  bonds  of  the  State  in  their  place.  The  holders  of 
an  issue  of  mortgage  bonds  issued  by  the  railroad  company 
subsequently  to  those  indorsed  by  the  State,  but  before  the 
default  in  payment  of  interest,  filed  a  bill  in  equity  to  fore- 
close their  own  mortgage  and  to  set  aside  the  said  sale  and  to 
be  let  in  as  prior  in  hen,  and  for  other  relief  affecting  the  prop- 
erty, and  set  forth  the  above  facts,  and  made  the  governor 
and  the  treasurer  of  the  State  parties,  and  those  officers  de- 
murred.^^ 

§  251.  State  or  State  Officers  as  Parties  Plaintiff  in  Suits 
Against  Corporation. 

A  petition  for  mandamus  to  compel  a  railroad  corporation 
to  perform  a  definite  duty  to  the  public,  which  it  has  distinctly 
manifested  an  intention  not  to  perform,  is  rightly  presented 
in  the  name  of  the  State,  at  the  relation  of  its  prosecuting  at- 
torney, and  without  previous  demand.''' 

As  to  suit  against  State  officers  not  being  suit  against  State,  see  §  155, 
herein. 

«  Cunningham  v.  Macon  &  Brunswick  Rd.  Co.,  109  U.  S.  446,  27  L.  ed. 
992,  .3  Sup.  Ct.  292,  609.  In  this  case  the  cases  at  law  in  which  the  court 
has  taken  jurisdiction,  where  the  objection  has  been  interposed  that  a  State 
was  a  necessary  party  to  enable  the  court  to  grant  relief  are  examined  and 
classified.  The  case  of  United  States  v.  Lee,  106  U.  S.  196,  27  L.  ed.  171, 
1  Sup.  Ct.  240,  is  examined  and  the  limits  of  the  decision  defined  and  the 
case  of  Davis  v.  Gray,  16  Wall.  (83  U.  S.)  203,  21  L.  ed.  447,  is  questioned. 

42  Northern  Pacific  Rd.  Co.  v.  Dustin,  142  U.  S.  492,  12  Sup.  Ct.  283, 

412  . 


PARTIES   CONTINUED  §  251 

An  action  to  restrain  a  corporation  from  doing  business  in 
a  State  must  be  brought  by  the  attorney-general  where  the 
provisions  of  the  statute  so  require  even  though  under  another 
provision  he  is  vested  with  a  discretion  as  to  bringing  suit.^^ 
And  where  a  statute  requires  a  certified  statement  of  bonds 
issued  and  a  corporation  neglects  or  refuses  to  comply  there- 
with a  civil  suit  may  be  brought  in  the  governor's  name  against 
such  corporation.**  So  the  attorney-general  may,  in  the  name 
of  the  State,  institute  an  action,  in  behalf  of  the  people  directly 
involving  their  rights  and  interests,  to  quiet  title  to  land,  as 
where  there  exist  adverse  claims  to  a  water  front  claimed  by 
the  State  .■*^  So  abutting  owners  and  the  attorney-general  are 
entitled  to  an  injunction  to  restrain  the  construction  of  a 
street  railway  where  the  company  has  not  compHed  with  con- 
ditions precedent  imposed  by  statute.'^ 

For  the  purpose  of  procuring  a  decree  enjoining  a  corporation 
from  acting  as  such  on  the  ground  of  the  nullity  of  its  or- 
ganization, it  is  not  necessary  that  the  individual  corporators 
or  officers  of  the  company  be  made  defendants,  and  process  be 
served  upon  them  as  such,  but  the  State  by  which  the  cor- 
porate authority  was  granted  is  the  proper  party  to  bring  such 
an  action  through  its  proper  officer,  and  it  is  well  brought  when 
brought  against  the  corporation  alone.^^ 

Where  a  statute  provides  that  an  action,  in  addition  to  other 
remedies,  may  be  brought  in  the  name  of  the  State,  to  recover 
taxes  assessed  against  a  telegraph  company,  when  it  has  failed 
or  refused  to  pay  the  same,  such  action  may  be  brought  in  be- 
half of  the  State,  even  though  an  injunction  has  issued  re- 
straining the  county  auditor  aud  county  treasurer  from  main- 

35  L.  ed.  1092  (a  case  of  mandamus  to  compel  a  railroad  company  to  build 
a  station  at  a  particular  place;  writ  was  not  issued  upon  facts). 

*3  State,  Childs,  v.  American  Sav.  &  L.  Assoc,  64  Minn.  349,  67  N.  W.  1, 
4  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  332. 

«  McDaniel  v.  Gate  City  Gaslight  Co.,  79  Ga.  58,  3  S.  E.  693. 

45  People  V.  Oakland  Water  Front  Co.,  118  Cal.  234,  50  Pac.  305. 

*«  Stockton  V.  Atlantic  Highlands,  R.  B.  &  L.  B.  E.  R.  Co.,  53  N.  J.  Eq. 
418,  32  Atl.  680. 

47  New  Orleans  Debenture  Co.  v.  Louisiana,  180  U.  S.  320,  45  L.  cd.  550, 
21  Sup.  Ct.  378. 

413 


§  252  PARTIES  CONTINUED 

taining  an  action  against  said  company  to  recover  taxes."*^  And 
where  the  right  to  maintain  an  obstruction  in  the  streets,  even 
though  placed  there  with  the  city's  permission,  is  to  be  tested 
as  a  pubUc  injury,  the  action  should  be  brought  by  the  city 
or  its  proper  representative.'*^ 

§  252.  United  States  as  Plaintiff — Right  to  Recover  from 
Bank — Forgery  of  Payee's  Name  on  Pension  Checks — In- 
ternal Revenue  Taxes — Action  Against  Railroads. 

The  United  States  can  recover  from  a  bank  presenting  pen- 
sion checks  to,  and  receiving  the  money  from,  a  subtreasury, 
where  the  names  of  the  payees  have  been  forged;  and  the  right 
to  recover  is  not  conditioned  upon  either  demand  or  the  giv- 
ing of  notice  of  the  discovery  of  facts  which  by  the  operation 
of  the  legal  warranty  were  presumably  within  the  knowledge 
of  the  bank.  The  United  States  is  not  chargeable  with  the 
knowledge  of  the  signatures  of  the  vast  numbers  of  persons  en- 
titled to  receive  pensions,  and  the  exceptional  rule  as  to  cer- 
tain classes  of  commercial  paper  that  the  person  having 
knowledge  of  the  genuine  signature  of  the  payee  whose  sig- 
nature is  forged  is  negligent  in  paying  on  such  an  indorsement 
and  therefore  cannot  recover,  does  not  apply  to  the  United 
States  in  regard  to  pension  checks.^" 

WTiere  under  the  statute  ^^  taxes  "may  be  sued  for  and  re- 
covered in  the  name  of  the  United  States  in  any  proper  form 
of  action"  the  United  States  may  bring  an  action  of  debt  or 
adopt  any  other  common-law  remedy  to  collect  what  is  due 
to  it  for  taxes  imposed  by  law  upon  a  bank  and  for  which  the 
bank  is  a  debtor  in  the  sum  prescribed.^^ 

48  Western  Union  Teleg.  Co.  v.  State,  146  Ind.  54,  44  N.  E.  793;  Ind. 
Rev.  Stat.,  1894,  §  8488. 

49  Chicago  Telephone  Co.  v.  Northwestern  Telephone  Co.,  100  III.  57, 
aff' d  in  199  111.  324,  65  N.  E.  329. 

50  United  States  v.  National  Exchange  Bank  of  Providence,  214  U.  S. 
302,  53  L.  ed.  1006,  29  Sup.  Ct.  665. 

51  Internal  Revenue  Law,  act  of  July  13,  1866. 

52  Dollar  Savings  Bank  v.  United  States,  19  Wall.  (86  U.  S.)  227,  22 
L.  ed.  80. 

414 


PARTIES   CONTINUED  §  253 

The  act  of  Congress  of  1873  ^^  is  a  valid  and  constitutional 
exercise  of  legislative  power.  Congress,  by  requiring  the 
attorney-general  to  bring  a  suit  in  equity  in  the  name  of  the 
United  States  in  any  Circuit  Court  against  the  Union  Pacific 
Railroad  Company  and  others,  intended,  not  to  change  the 
substantial  rights  of  the  parties  to  the  suit,  but  to  provide  a 
specific  mode  of  procedure,  which,  by  removing  certain  re- 
strictions on  the  jurisdiction,  process,  and  pleading  which  are 
in  other  cases  imposed,  would  give  a  larger  scope  to  the  action 
of  the  court,  and  a  more  economical  and  eflBcient  remedy  than 
before  existed  .^^ 

§  253.  Reorganized  or  Successor  Corporation. 

A  new  corporation  may  sue  in  its  own  name  without  making 
the  stockholders  parties  upon  a  demand  against  a  judgment 
creditor  held  by  the  old  company  which  it  was  intended  the 
new  company  should  sue  on,  any  excess  recovered  over  the 
claim  of  said  creditor  against  the  old  company  to  go  by  agree- 
ment to  the  old  stockholders.  The  judgment  in  question  here 
had  been  obtained  before  the  reorganization,  and,  in  view  of 
contemplated  litigation  with  the  judgment  creditor,  the  pur- 
chase note  given  by  the  new  stockholders  was  deposited  with 
a  trustee  for  the  purpose  of  indemnifying  the  reorganized  com- 
pany against  any  loss  which  might  be  sustained  by  it  on  ac- 
count of  said  contemplated  litigation.^^  And  where  stock- 
holders have  the  same  interest  in  the  new  corporation  as  in 
the  old  and  there  exists  no  new  consideration  they  cannot  by 
forming  such  new  corporation  and  transferring  to  it  the  prop- 
erty of  the  old  company  thereby  release  themselves  from  lia- 
bility to  the  vendor  for  the  value  of  property  obtained  by  the 
latter  corporation  in  its  corporate  name  on  credit .^^ 

One  who  owns  stock  in  a  railroad  corporation  and  delivers 

53  Act  of  March  3,  1873,  17  Stat.  509. 

54  United  States  v.  Union  Pac.  R.  R.  Co.,  98  U.  S.  569,  25  L.  ed.  143, 
140  Sup.  Ct.  62. 

55  St.  Francis  Electric  Light  Co.  v.  Electric  Supply  Co.,  69  Ark.  174, 
61  S.  W.  912. 

58  Hancock  v.  Holbrook,  40  La.  Ann.  53,  3  So.  351. 

415 


§  253  PARTIES   CONTINUED 

it,  for  the  purpose  of  reorganization,  to  a  committee  whose 
discretion  as  to  the  disposition  and  use  of  the  new  corporation's 
securities  is  absolute,  is  obhgated,  in  order  to  maintain  a  suit 
against  such  committee  for  breach  of  trust  in  relation  to  the 
purchase  of  securities  and  the  delivery  of  preferred  stock  to 
noteholders  and  for  commissioners,  to  show  that  the  said  acts 
were  not  warranted  and  that  the  preservation  of  the  value  of 
his  holding  requires  that  the  alleged  wrongful  acts  should 
cease,  and  the  entire  acts  of  the  committee  should  be  shown." 

If  a  reorganization  of  a  corporation  into  a  foreign  one  has 
been  brought  about  without  the  consent  of  a  stockholder  he 
can  maintain  an  action  against  the  original  corporation,  such 
reorganization  not  being  void  on  its  face  but  voidable;  but, 
since  the  foreign  corporation  is  not  made  a  party,  although  a 
necessary  one  to  any  decree  of  restitution,  the  most  relief  which 
can  be  afforded  is  the  annulling  of  the  action  of  the  original 
corporation.^* 

The  rules  of  pleading  in  equity  are  more  elastic  than  in  ac- 
tions at  law,  and  where  the  plaintiff  in  equity  knows  that  a 
third  person  claims  an  interest  in  the  subject-matter  but  does 
not  know  the  nature,  extent  or  merit  of  the  claim,  these  facts 
may  be  stated  and  the  claimant  made  a  defendant  and  re- 
quired to  disclose  his  alleged  interest.  Thus,  where  a  stock- 
holder suing  members  of  a  reorganization  committee  in  equity 
for  waste  and  misapplication  of  securities  deposited  with  them, 
shows  that  a  trust  company,  the  original  depositary,  had  re- 
ceived certain  securities  but  was  superseded  as  depositary  by 
a  new  trust  company,  to  which  it  delivered  the  securities,  and 
alleges  on  information  and  belief  that  the  original  deposi- 
tary assisted  the  members  of  the  reorganization  committee  in 
misappropriating  and  wasting  the  property  of  the  plaintiff's 
corporation  and  shared  in  the  profits  so  made,  there  is  suffi- 
cient to  put  the  first  depositary  to  an  answer  and  explanation. 
And  where  such  complaint  alleges  positively  that  an  individual, 
made    defendant,    signed   the   reorganization   agreement,    he 

57  Venner  v.  Fitzgerald  (U.  S.  C.  C),  91  Fed.  335. 

68  Farish  v.  Cieneguita  Copper  Co.  (Ariz.,  1909),  100  Pac.  781. 

416 


PARTIES   CONTINUED  §  254 

should  be  required  to  answer,  although  his  name  does  not  aj)- 
pear  among  the  parties  to  the  agreement,  the  actual  signatures 
thereto  not  being  printed  in  the  case.^*^ 

§  254.  Same  Subject. 

A  new  corporation  cannot  be  considered  as  a  continuation 
of  the  original  one  and  liable  at  law  for  its  debts  even  though 
composed  of  the  officers  and  stockholders  of  the  old  corpora- 
tion where  it  has  acquired  the  latter's  property  and  assets  by- 
purchase  at  judicial  sales;  and  this  apphes  irrespective  of  what- 
ever might  be  the  new  corporation's  hability  in  equity  to  the 
creditors  of  the  original  corporation  had  the  transfers  of  prop- 
erty been  fraudulent.^"    A  railroad  company  is  not  hable  for 

59  Mawhinney  v.  Bliss,  124  App.  Div.  609,  109  N.  Y.  Supp.  332.  The 
statement  of  facts  in  this  case  is  as  follows  (per  Houghton,  J.):  "The  action 
is  brought  by  the  plaintiff  as  a  stockholder  against  certain  members  of  the 
reorganization  committee  under  a  reorganization  agreement  respecting  the 
American  Cotton  Company  and  other  subsidiary  corporations.  A  demurrer 
to  the  complaint  by  one  of  the  committee  was  considered  by  this  court 
under  the  title  of  Mawhinney  v.  Bliss,  117  App.  Div.  255,  102  N.  Y.  Supp. 
279,  aff'd  189  U.  S.  801,  81  N.  E.  1169,  where  the  general  facts  alleged 
are  fully  stated,  rendering  a  further  statement  unnecessary. 

"The  Bankers'  Trust  Company,  one  of  the  present  appellants,  was  the 
depository  of  the  securities  under  the  reorganization  agreement,  and  it 
demurs  on  the  principal  ground  that  the  complaint  states  no  cause  of  action 
against  it.  The  complaint  shows  that  the  Bankers'  Trust  Company  was 
the  original  depository,  and  received  certain  stocks  and  securities;  but  it 
further  alleges  that  it  was  superseded  by  the  Metropolitan  Trust  Company 
as  depository,  and  that  it  delivered  to  its  successor  all  the  certificates  of  stock 
and  other  corporate  securities  which  had  been  deposited  with  it.  The  only 
other  allegation  of  the  complaint  connecting  the  Bankers'  Trust  Company 
with  the  acts  complained  of  is  on  information  and  belief  that  it  assisted 
the  individual  members  of  the  reorganization  committed  in  misappropriat- 
ing or  wasting  the  money  and  property  of  the  American  Cotton  Company, 
and  shared  in  the  profits  so  made  by  them.  The  allegation  respecting  the 
misappropriation  and  wasting  of  the  assets  of  the  corporation  by  these 
individuals  is  upon  information  and  belief,  with  an  express  statement  that 
plaintiff  has  no  knowledge  of  the  amount  of  money  or  what  property  was 
so  mismanaged  or  wasted." 

60  Armour  v.  E.  Bement's  Sons  (U.  S.  C.  C.  A.),  123  Fed.  56. 

As  to  extent  of  liability  or  duties  of  reorganized  or  successor  corporation,  see 
the  following  cases: 

United  States:  Barkley  v.  Levee  Commissioners,  93  U.  S.  258,  23  L.  ed. 
893  (obligations  of  successor  of  public  corporation);  American  Creosote 

27  417 


§  254  PARTIES   CONTINUED 

the  torts  or  contracts  of  its  predecessor  merely  because  it  has 
purchased  or  is  operating  a  railwa}'  Hne  of  another  compan)-; 
it  must  in  such  case  be  charged  by  law  with  the  liability  or 
obligation,  or  it  must  have  assumed  the  same,  and  this  appUes 
to  a  breach  of  contract  which  the  other  company  had  entered 
into.®'  Although  a  creditor  may  have  a  right  to  follow  in 
equity  the  assets  of  an  old  corporation  to  whose  assets  and 
business  a  new  corporation  has  succeeded,  still,  in  the  absence 
of  a  novation,  the  latter  corporation  cannot  be  held  liable  in 
an  action  at  law  for  the  old  corporation's  debts  when  it  has  not 
assumed  the  same.®^  Where  a  corporation  is  embarrassed  and 
agrees  upon  a  plan  to  reorganize  whereby  its  dehta  are  to  be 
satisfied  by  bonds  to  be  issued,  and  before  such  agreement  for 
reorganization  is  executed  there  is  a  disputed  understanding 
to  the  effect  that  payment  was  to  be  in  cash,  a  creditor  of  the 

Works  V.  C.  Lembcke  &  Co.  (U.  S.  C.  C),  165  Fed.  809;  Kittel  v.  Augusta, 
T.  &  G.  R.  Co.  (U.  S.  C.  C),  78  Fed.  855  (when  railroad  corporation  not 
liable;  case  of  property  sold  under  execution  and  transferred;  transferee 
had  nothing  to  do  with  proceeds) ;  Glidden  &  J.  Varnish  Co.  v.  Interstate 
Nat.  Bank  (U.  S.  C.  C.  A.),  69  Fed.  912,  16  C.  C.  A.  534,  32  U.  S.  App. 
654. 

Indiana:  Louisville  N.  A.  &  C.  R.  Co.  v.  Boney,  117  Ind.  501,  3  L.  R.  A. 
435. 

Louisiana:  Charity  Hospital  v.  New  Orleans  Gas  Light  Co.,  40  La.  Ann. 
382. 

Massachusetts:  Aldridge  v.  P'ore  River  Shipbuilding  Co.,  201  Mass.  131, 
87  N.  E.  485;  Day  v.  Worcester,  N.  &  R.  R.  Co.,  151  Mass.  302. 

Minnesota:  Plainview  v.  Winona  &  tit.  P.  Rd.  Co.,  36  Minn.  505. 

Nebraska:  Austin  v.  Tecumseh  Nat.  Bank,  49  Neb.  412,  68  N.  W.  628, 
35  L.  R.  A.  444,  5  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  382. 

New  York:  Pohhemus  v.  Fitchburg  Rd.  Co.,  123  N.  Y.  502,  26  N.  E.  31, 
46  Am.  &  Eng.  R.  Cas.  330,  43  Alb.  L.  J.  149,  9  R.  R.  &  Corp.  L.  J.  149, 
50  Hun,  397,  20  N.  Y.  St.  Rep.  117;  Baker  v.  Appleton  &  Co.,  95  N.  Y.  Supp. 
125,  107  App.  Div.  358,  aff'd  in  (mem.)  187  N.  Y.  548,  80  N.  E.  1104; 
Ferguson  v.  Ann  Arbor  Rd.  Co.,  45  N.  Y.  Supp.  172,  17  App.  Div.  336; 
Fernschild  v.  D.  G.  Yuengling  Brew.  Co.,  40  N.  Y.  Supp.  1119,  18  Misc.  49; 
Janes  v.  Fitchburg  R.  Co.,  50  Hun  (N.  Y.),  310. 

Pennsylvania:  Campbell  v.  Pittsburgh  &  W.  Rd.  Co.,  137  Pa.  St.  574. 

Virginia:  Supreme  Lodge  Knights  of  P.  v.  Weller,  93  Va.  605,  25  S.  E. 
891,  5  Am.  &  Eng.  Rd.  Cas.  (N.  S.)  376. 

61  Seaboard  Air  Line  Ry.  Co.  v.  Leader,  115  Ga.  702,  42  S.  E.  38. 

62Ewing  V.  Composite  Brake-Shoe  Co.,  169  Mass.  72,  47  N.  E.  241,  7 
Am.  &  Eng.  Corp.  Cas.  (N.  S.)  181. 

418 


PARTIES   CONTINUED  §  255 

corporation  cannot  maintain  a  suit  against  the  committee  of 
reorganization  to  recover  such  claimed  cash  payment.^^ 

§  255.  Same  Subject. 

If  a  contract  exists  whereby  the  corporation  purchasing  the 
assets  of  another  corporation  is  to  pay  the  latter's  debts  thc^ 
vendee  corporation  may  be  sued  at  law  by  a  creditor  of  the 
vendor.^"*  And  where  a  new  corporation  is  organized  to  cure 
defects  in  the  organization  of  an  old  de  facto  corporation  and 
takes  the  property  and  assumes  the  obligations  of  the  old 
company  it  will  be  liable  upon  a  judgment  obtained  against 
the  latter  subsequent  to  such  reorganization.^^ 

Where  the  articles  of  a  fire  insurance  company  are  defective 
and  a  new  mutual  company,  with  the  same  name,  is  organized 
for  the  purpose  of  obviating  such  defects,  and  it  acquires  the 
assets  of,  and  continues  in  force  the  policies  of  the  old  company, 
in  case  the  members  do  not  elect  to  take  out  new  policies,  and 
practically  the  same  officers  and  members  are  retained,  such 
new  company  will  be  held  liable  upon  a  policy  issued  by  the 
old  company  on  the  same  basis  as  if  it  had  itself  issued  it.®^ 
In  case  of  success  in  form,  of  an  attempt  to  reorganize  a  mu- 
tual insurance  company  on  the  stock  plan  under  a  law,  in  terms 
authorizing  it,  the  insurance  business  formerly  carried  on  by 
the  old  company  being  continued  ostensibly  by  the  new  crea- 
tion, using  the  former's  assets  and  good  will,  if  the  attempt  is 
fruitless  because  of  the  enabling  act  being  void  such  continued 
business  is  to  be  regarded  as  really  that  of  the  old  corporation; 
as  belonging  to  it.**^ 

A  corporation  which  succeeds  another  in  its  business,  pur- 
chases all  its  property  and  assets  and  assumes  its  liabilities 
and  contracts  may  hold  liable  in  equity  an  assignee  of  a  con- 
es Glens  Falls  Paper  Mill  Co.  v.  Trask,  51  N.  Y.  Supp.  977,  29  App.  Div. 
449,  aff'd  in  164  N.  Y.  604,  58  N.  E.  1087. 

64  Central  Electric  Co.  v.  Sprague  Electric  Co.  (U.  S.  C.  C.  A.),  120  Fed. 
925,  57  C.  C.  A.  97. 

85  Calumet  Paper  Co.  v.  Stotts  Investment  Co.,  96  Iowa,  147,  64  N.  W.  782. 

68  Benesh  v.  Mill  Owners'  Mut.  F.  Ins.  Co.,  103  Iowa,  465,  72  N.  W.  674. 

87Huber  v.  Martin,  127  Wis.  412,  105  N.  W.  1031,  1135,  115  Am.  St. 
Rep.  1023,  3  L.  R.  A.  (N.  S.)  653. 

419 


§  256  PAPxTIES   CONTINUED 

tract  constituting  part  of  the  assets  and  it  is  not  necessary  that 
the  assignor  should  be  made  a  party  to  the  suit.^* 

A  bondholder  of  an  insolvent  corporation  who  is  a  party 
to  a  reorganization  agreement  cannot  have  the  aid  of  a  court 
of  equity  in  compelling  a  committee  of  reorganization,  author- 
ized to  act  by  the  bondholders,  to  deliver  to  him  new  bonds 
of  the  reorganized  company  until  he  has  placed  himself  on  an 
equality  with  the  other  bondholders  by  repaying  money  which 
he  has  collected  on  matured  coupons,  detached  by  him,  be- 
fore depositing  his  bonds  in  accordance  with  the  plan  of  re- 
organization for  the  purpose,  as  agreed,  of  paying  for  the  prop- 
erty of  the  old  company  upon  foreclosure  and  purchase  thereof  .^^ 

§  256.  Levee  Districts  or  Levee  Boards  Whether  Public 
or  Private  Corporations  May  Sue  and  Be  Sued. 

Under  a  Federal  decision  a  levee  district  is  a  public  corpo- 
ration with  power  to  sue  and  be  sued  even  though  a  statute 
creating  a  board  of  levee  inspectors  with  powers  usually  in- 
cident to  such  corporations  does  not  expressly  declare  it  to 
be  a  corporation^"  So  a  levee  board  may  be  a  corporation 
with  large  discretionary  powers  as  a  fiduciary  agent  to  carry 
out  public  purposes,  such  as  the  power  to  aid  in  building  levees, 
or  other  works  of  public  improvement;  and  it  may  also  possess 
authority  to  sue.^^  It  is  also  held  that  a  levee  district  board 
exercises  only  pubhc  duties  and  functions  and  cannot  be  sued 
outside  of  the  StateJ^  In  Ilhnois  a  board  of  directors  appointed 
by  statute  to  locate  and  superintend  the  construction  of  a 
levee,  with  power  to  contract,  sue  and  be  sued,  under  a  spec- 
ified name,  is  strictly  a  private  corporation  7^ 

68  Dancel  v.  Goodyear  Shoe  Mfg.  Co.  (U.  S.  C.  C),  137  Fed.  157,  aff'd 
in  144  Fed.  679,  s.  c,  202  U.  S.  619. 

69  Fuller  V.  Venable  (U.  S.  C.  C.  A.),  118  Fed.  543,  55  C.  C.  A.  309. 

70  Board  of  Levee  Inspectors  of  Chicot  County  v.  Crittenden,  94  Fed.  613. 

71  Louisiana,  A.  &  M.  R.  Co.  v.  Tensas  Basin  Levee  Dist.  Commrs.,  87 
Fed.  594,  31  C.  C.  A.  121,  58  U.  S.  App.  281. 

72  Board  of  Directors  of  St.  Francis  Levee  Dist.  v.  Bodkin  (Tenn.),  69 
S.  W.  270. 

73  Board  of  Directors  for  Leveeing  Wabash  River  v.  Houston,  71  111.  318, 
322. 

420 


PARTIES   CONTINUED  §  257 

§  257.  Banks  as  Parties  Generally. 

In  an  early  case  in  the  Federal  Supreme  Court  where  a  bank 
had  become  insolvent  and  had  made  an  assignment  of  its 
effects  to  trustees  for  the  benefit  of  its  creditors,  it  was  allowed 
to  sue  in  its  own  name  at  the  instance  and  for  the  benefit  of 
creditors,  and  the  case  was  held  to  be  the  same  as  if  the  law 
permitted  the  suit  to  be  brought  and  the  same  had  been 
brought  in  the  name  of  such  trustees.'^'*  But  where  the  charter 
of  a  bank  is  repealed  and  a  provision  made  for  the  distribution 
of  its  funds  by  a  receiver  the  bank  is  thereby  incapacitated  to 
any  longer  sue  or  be  sued  in  a  court  of  law,  otherwise  than  to 
promote  the  objects  confided  to  the  receivers.'^  Where  money 
was  borrowed  from  a  bank  upon  a  promissory  note,  signed  by 
the  principal  and  two  sureties,  and  the  principal  debtor,  by 
way  of  counter  security  conveyed  certain  property  to  a  trus- 
tee for  the  purpose  of  indemnifying  his  sureties  it  is  necessary 
to  make  the  trustee  and  the  cestui  que  trust  parties  to  a  bill 
filed  by  the  bank,  asserting  a  special  lien  upon  the  property 
thus  conveyed.  But  where  the  principal  debtor  had  made  a 
fraudulent  conveyance  of  the  property,  which  had  continued 
in  his  possession,  after  the  execution  of  the  trust  deed,  and  then 
died,  a  bill  is  good,  which  was  filed  by  the  bank  against  the 
administrators,  for  the  purpose  of  setting  aside  the  fraudulent 
conveyance,  and  bringing  the  property  into  the  assets  of  the 
deceased,  for  the  benefit  of  all  the  creditors  who  might  apply."'' 

Although  a  bank  is  the  equitable  owner  of  property  as 
against  its  cashier  who  has  purchased  personal  property  in  his 
own  name  upon  a  consideration  moving  from  the  bank  still 
where  the  cashier  replevies  such  property  the  bank  is  not  a 
necessary  party .'^ 

71  Lyman  v.  United  States  Bank  (1851),  12  How.  (5.3  U.  S.)  225,  13  L.  ed. 
965. 

The  act  of  incorporation  of  the  Bank  of  the  United  States  gave  the  Federal 
Circuit  Courts  jurisdiction  of  suits  by  and  against  the  bank.  Osborn  v. 
United  States  Bank  (1824),  9  Wheat.  (22  U.  S.)  738,  6  L.  ed.  204. 

75  Whitman  v.  Cox,  26  Me.  335. 

7»  McRea  v.  Bank  of  Alabama,  19  How.  (60  U.  S.)  376,  15  L.  ed.  688. 

"  Church  V.  Foley,  10  S.  Dak.  74,  71  N.  W.  759. 

421 


§  258  PARTIES   CONTINUED 

§  258.  Suit  by  Corporation  as  Taxpayer — Suit  by  Tax- 
payer Against  Corporation. 

A  corporation  may,  as  taxpayer,  sue  to  enjoin  the  breaking 
up  of  a  street  pavement,  done  without  legal  authority.^* 

If  a  trolley  com]mny  is  illegally  constructing  its  road,  a 
taxpayer  may  take  action  against  the  company  to  restrain 
it,  and  need  not  wait  therefor,  until  the  assessment  is  laidJ'* 

A  taxpayer  cannot  maintain  an  action  to  revise,  control,  or 
vacate  the  acts  of  a  municipal  government,  except  as  inci- 
dental or  subsidiary  to  the  protection  of  some  private  right  or 
prevention  of  some  private  wrong,  or  to  prevent  any  wrong- 
ful squandering  or  surrender  of  the  moneys,  property,  or 
property  rights  of  the  municipality,  or  when  unlawful  increase 
in  the  burdens  of  taxation  is  threatened  by  the  proposed  ac- 
tion. Thus,  under  a  State  statute  providing  for  the  formation, 
etc.,  of  street  railway  corporations,*"  a  city  was  empowered 
to  grant  the  use  of  streets  and  bridges  to  such  corporations 
upon  such  terms  as  the  proper  authorities  should  determine.  A 
city,  acting  under  such  statute,  granted  the  defendant  street 
railway  company  a  franchise  to  extend  its  lines,  thus  in  op- 
eration, on  certain  designated  streets,  without  receiving  any 
money  consideration  therefor,  but  in  consideration  that  the 
company  should  charge  a  reduced  fare.  The  company  had 
formerly  offered  a  large  sum  of  money  for  such  franchise,  with 
the  right  to  charge  the  former  fare;  and  other  parties  had  of- 
fered a  large  sum  of  money  for  the  additional  franchise,  but 
they  owned  no  connecting  lines.  It  was  held,  that  the  grant- 
ing of  the  franchise  was  a  question  addressed  to  the  sound  dis- 
cretion of  the  common  council;  and  that  when  it  decided  that 
the  reduced  fares  were  more  desirable  for  the  public,  while 
it  might  or  might  not  have  exercised  good  discretion,  such  ac- 
tion could  not  be  called,  in  any  proper  or  reasonable  sense,  a 

78  Potomac  Elect.  Power  Co.  v.  United  States  Elect.  L.  Co.,  26  Wash.  L. 
Rep.  (Dist.  Col.)  19. 

79  State,  Lewis,  v.  Board  of  Freeholders  of  Cumberland,  56  N.  J.  L.  4]  6, 
28  Atl.  553. 

8"  Section  1862,  Wis.  Stat.,  1898. 
422 


PARTIES   CONTINUED  §  258 

squandering  of  public  funds  or  property.  The  owner  of  prop- 
erty abutting  on  a  street  in  which  it  is  proposed  to  construct 
a  street  railway  under  a  franchise,  conditioned  that  it  should 
be  accepted  by  the  railway  company,  even  though  he  might 
be  entitled  to  enjoin  the  construction  of  the  railway  in  front 
of  his  lot,  cannot  enjoin  the  company  from  accepting  the 
franchise,  and  thus  in  effect  annul  the  entire  grant.*' 

81  Linden  Land  Co.  v.  Milwaukee  Electric  Ry.  &  Light  Co.,  107  Wis.  493, 
83  N.  W.  851.     See  §  242,  herein. 


423 


PAKTIES    CONTINUED— RIGHTS    AND    LIABILITIES- 


CHAPTER  XVI 

PAKTIES     CONTINUED — RIGHTS     AND     LIABILITIES — REMEDIES- 
PROMOTERS — OFFICERS — DIRECTORS — STOCKHOLDERS 


259.  Promoters'    Duties — Remedy    §   269. 

Against  Them — Corporate 
Liability  for  Acts  of,  Gen- 
erally. 

260.  Internal  Management  of  Cor- 

porations— General  Rule.  270. 

261.  Officers  or  Directors — Duties 

and  Liabilities  of,  Generally 
— Parties. 

262.  Suit  by  Corporation  Against        271. 

Officers  or  Directors — Dam- 
ages— Accounting. 

263.  Suit  by  Stockholders  Against 

Officers  or  Directors — Cor-        272. 
poration  as  Party. 

264.  Suit  by  Stockholders  Against        273. 

Directors  —  Negligence  — 
Maladministration  —  Aver- 
ments Necessary  —  What 
Must  Be  Shown.  274. 

265.  Individual   Liability  of  Offi- 

cers and  Trustees  to  Credit- 
ors   Where    Capital    Stock       275. 
Not    Subscribed  —  Suit   in 
Equity        by        Creditors 
Against  Directors. 

266.  Suits  by  and  Rights  of  Minor-       276. 

ity  Stockholders  —  When 
Corporation  Should  Be 
Made  Party. 

267.  Suits     by     and     Rights     of 

Minority       Stockholders — 
Creating  New  Corporation        277. 
—  Consolidation        Agree- 
ment. 

268.  When  Stockholder  May  and 

May  Not  Sue  in  Equity. 

424 


Right  of  Stockholders  to  Sue 
in  Equity  in  a  Federal 
Court  for  Surplus  Assets 
After  Decree  of  Forfeiture 
of  Franchises. 

Suit  by  Stockholder  Against 
Trustee  of  Funds  for  Divi- 
dends— Defense — Counter- 
claim. 

Suit  by  Stockholder  to  Com- 
pel Successor  in  Interest  of 
Lessee  to  Pay  Rent  Re- 
served. 

Right  of  Subsequent  Stock- 
holders to  Sue. 

When  Corporation  and  Not 
Stockholders  Should  Sue 
Under  Sherman  Anti-Trust 
Act. 

When  Corporation  Should  Sue 
or  Be  Made  Party  to  Suit 
by  Stockholder. 

When  Stockholder  May  Be 
Made  Party  Defendant  by 
Court — Refusal  to  Permit 
Stockholders  to  Defend. 

Stockholders  as  Necessary 
Parties  in  Suit  by  Policy 
Holder  Against  Insurance 
Company  for  Accounting 
and  Receivership — Equity 
Jurisdiction. 

Transfers  of  Stock — Pledge 
for  Collateral  Security — 
Liability  of  Pledgee  as 
Stockholder  —  National 
Banks — Bailment. 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.     §  259 

§  259.  Promoters'  Duties— Remedy  Against  Them— Cor- 
porate Liability  for  Acts  of,  Generally. 

Promoters  of  a  corporation  arc  boimd  to  the  exercise  of 
good  faith  toward  all  the  stockholders,  to  disclose  all  the  facts 
relating  to  the  property,  and  to  select  competent  persons  as 
directors,  who  will  act  honestly  in  the  interest  of  the  share- 
holders, and  are  precluded  from  taking  a  secret  advantage  of 
other  shareholders.^  In  a  case  decided  in  the  New  York  Court 
of  Appeals,  in  1890,  the  facts  were  as  follows:  The  defendant 
B.  having  acquired,  in  his  own  name,  but  for  the  joint  benefit 
of  himself  and  the  other  individual  defendants  therein,  options, 
giving  a  right  to  purchase  certain  mining  property,  entered 
with  them  into  a  contract,  by  the  terms  of  which  it  was  agreed 
to  issue  a  prospectus  and  invite  subscriptions  for  the  stock 
of  a  corporation  which  it  was  proposed  to  organize,  in  case 
subscriptions  were  obtained  sufficient  to  pay  for  the  property; 
in  which  case  the  purchase'  was  to  be  made  and  title  taken  by 
B.  for  himself  and  as  trustee  for  his  associates;  he  to  convey 
to  the  corporation,  receiving  therefor  the  whole  capital  stock. 
All  that  remained  of  said  stock,  after  delivery  to  the  sub- 
scribers, was  to.be  divided  between  the  contracting  parties 
in  specified  proportions.  A  prospectus  and  subscription  paper 
were  accordingly  issued;  the  former  set  forth  the  terms  and 
conditions  upon  which  the  corporation  was  proposed  to  be 
organized,  and  in  it  the  names  of  the  associates  were  given  as 
the  officers  and  trustees  of  the  corporation.  In  the  subscrip- 
tion paper  H.,  one  of  the  associates,  was  named  as  trustee 
for  the  subscribers.  The  capital  stock  of  the  proposed  corpora- 
tion was  fixed  at  one  million  five  hundred  thousand  dollars, 
divided  into  shares  of  the  par  value  of  ten  dollars  each.  The 
prospectus  stated  that  only  a  portion  of  the  shares  were  to  be 
sold  at  four  dollars  per  share;  they  were  to  be  fully  paid  up 
and  nonassessable.    Subscriptions  having  been  received  from 

1  Dickerman  v.  Northern  Trust  Co.,  176  U.  S.  181,  44  L.  ed.  423,  20  Sup. 
Ct.  .311.  See  also  Camden  Land  Co.  v.  Lewis,  101  Me.  78,  6.3  Atl.  523;  Fred 
Macey  Co.  v.  Macey,  143  Mich.  138,  13  Detroit  Leg.  N.  948,  106  N.  W.  722, 
5  L.  R.  A.  (N.  S.)  1036. 

425 


§  259    PARTI p:s  continued — rights  and  liabilities — 

plaintiffs  and  others  for  about  sixty-one  thousand  shares  at 
the  prices  agreed  upon,  the  corporation  was  organized.  The 
associates,  who  had  performed  or  directed  everything  that  was 
done  previous  to  the  incorporation,  signed  the  necessary 
certificate  therefor,  naming  themselves  as  trustees  for  the 
first  year.  B.  thereupon  completed  the  purchase  of  the  prop- 
erty, received  a  deed,  and  immediately  conveyed  to  the  cor- 
poration; all  the  stock  was  thereupon  issued  to  him;  he  as- 
signed the  shares  subscribed  for  to  the  purchasers  and  applied 
the  money  in  payment  of  a  loan  made  to  him  and  his  associates 
to  make  the  purchase.  After  paying  the  cost  of  the  purchase 
and  other  expenses,  the  associates  had  remaining  on  hand 
fifty-eight  thousand  two  hundred  and  thirty-five  shares  of 
stock,  for  which  they  paid  nothing,  and  which  were  divided 
between  them  as  provided  in  their  contract.  Plaintiffs,  when 
they  received  and  paid  for  their,  stock,  had  no  knowledge  of 
the  contract  or  notice  that  defendants  were  to  acquire  shares 
without  paying  for  them.  In  an  action  to  recover  damages,  it 
was  held,  that  plaintiffs  had  the  right  and  were  led  to  believe, 
from  the  documents  and  circumstances,  that  defendants  were 
acting  in  the  interest  of  all  the  investors,  and  defendants  knew 
that  plaintiffs  so  believed;  and  so  that  the  relation  between 
the  parties  was  not  that  of  vendors  and  vendees  simply,  but 
was  one  of  trust  and  confidence,  binding  defendants  to  the 
exercise  of  good  faith,  and  to  disclose  the  information  they 
possessed  affecting  the  value  of  the  property;  and  that  plain- 
tiffs were  entitled  to  recover.^ 

In  another  case  decided  in  1909  in  the  Appellate  Division 
of  the  New  York  Supreme  Court  there  was  an  action  at  law 
to  recover,  as  moneys  had  and  received,  the  amounts  paid  by 
the  plaintiff  and  his  assignor  on  stock  subscriptions  pursuant 
to  a  syndicate  agreement.  This  agreement  provided  for  the 
purchase  of  the  stock  of  an  iron  company  at  par,  together 
with  certain  coal  lands,  for  the  erection  of  furnaces,  and  the 
sale  of  the  properties  thus  purchased  and  equipped  to  a  cor- 

-  Brewster  v.  Hatch,  122  N.  Y.  .349,  .3.3  N.  Y.  St.  Rep.  527,  25  N.  E.  505, 
9  Rd.  &  Corp.  L.  J.  5,  19  Am.  St.  Rep.  498. 

426 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.        §  259 

poration  to  be  organized,  the  stock  of  which  was  to  be  issued 
to  the  syndicate  subscribers  in  proportion  to  their  subscrip- 
tions. This  agreement  was  carried  out  and  the  stock  of  the 
new  corporation  issued  to  subscribers.  The  plaintiff  sued  one 
of  the  promoters  of  the  enterprise  to  recover  the  amount  paid 
for  the  stock  upon  the  grounds  (1)  that  the  defendant  had 
agreed  to  pay  his  subscription  in  cash  without  intending  to 
do  so,  and  (2)  that,  being  agent  of  the  syndicate  he  purchased 
stock  of  the  iron  company  of  which  he  himself  owned  a  large 
portion.  On  all  the  evidence  it  was  hekP  that  a  judgment 
for  the  plaintiff  should  be  reversed  for  the  reason  that  no 
fraud,  either  actual  or  constructive,  on  the  part  of  the  defend- 
ant had  been  shown;  and^  because,  even  if  the  defendant 
agreed  to  pay  his  subscription  in  cash,  the  remedy  for  the 
breach,  if  any,  was  not  an  action  for  fraud.  It  was  also  decided 
that,  while  the  defendant  was  guilty  of  constructive  fraud  in 
purchasing  the  stock  of  the  iron  company  for  the  syndicate, 
the  defendant's  principal  was  the  syndicate,  which  was  suc- 
ceeded by  the  corporation,  and  the  right  of  the  latter  to  rescind 
the  sale  of  the  stock  did  not  give  the  syndicate  subscribers  the 
right  to  rescind  their  subscription  contract,  for  the  contract 
for  the  purchase  of  the  stock,  not  the  subscription  contract, 
was  rendered  voidable  by  the  defendant's  fraud.^  The  cor- 
poration itself  must  institute  any  equitable  suits  to  redress 
wrongs  by  promoters  or  directors  violating  duties  as  trustees.^ 
And  a  corporation  has  a  remedy  at  law  to  enforce  the  liability 
of  promoters  to  refund  to  the  corporation  their  profits  where 
such  promoters  are  guilty  of  actionable  fraud.''  So  a  corpora- 
tion may,  after  rescission,  sue  in  equity  its  promoter  to  recovei- 
back  the  consideration  received  for  property  sold  to  it  for 
large  profits  by  the  promoters  who  have  failed  to  disclose 

3  Per  Woodward,  J. 

4  Per  Miller  and  Jenks,  JJ. 

5  Heckscher  v.  Edenborn,  115  N.  Y.  Supp.  673,  1.31  App.  Div.  253. 
«  Wills  V.  Nehalem  Coal  Co.  (Oreg.,  190S),  96  Pac.  528. 

7  Pietsch  V.  Milbrath,  123  Wis.  647,  107  Am.  St.  Rep.  1017,  101  N.  W. 
388,  102  N.  W,  342.  See  Groel  v.  United  Electric  Co.,  70  N.  J.  Eq.  616, 
61  Atl.  1061. 

4L>7 


§  259      PARTIES   CONTINUED — RIGHTS   AND   LIABILITIES — 

material  facts;  the  defendant  may  be  charged  directly  with  a 
violation  of  his  fiduciary  duty  and  compelled  to  make  restitu- 
tion of  what  was  so  acquired.  The  plaintiffs  can  waive  their 
remedy  founded  on  the  implied  contract  to  return  the  con- 
sideration on  the  contracts  being  rescinded  and  sue  for  the 
tortious  violation  of  the  duty  owed  by  them  to  it  because  of 
the  fiduciary  relation  in  which  they  stood.  The  bill  in  equity 
may  be  brought  against  one  of  two  promoters,  even  though  the 
title  to  the  property  conveyed  to  the  corporation  stood  in  the 
name  of  the  other  promoter  who  held  a  half  interest  in  the 
contract,  the  other  promoter  being  dead.*  Promoters  of  a 
consolidated  corporation  are  not  liable  to  it  in  a  fiduciary 
capacity  even  though  the  properties  to  be  consolidated  are 
purchased  by  them  in  their  own  names  in  order  to  capitalize 
their  combined  values  by  transferring  them  to  the  company  in 
payment  of  their  stocks,  but  bonds  and  such  purchases  are  not 
shown  under  the  contract  therefor  to  have  been  made  in  a 
fiduciary  capacity.^  Corporations  are  not  bound  by  con- 
tracts made  by  promoters  before  incorporation.^"    A  corpora- 

8  Old  Dominion  Copper  Mining  &  Smelting  Co.  v.  Bigelow,  188  Mass. 
315,  74  N.  E.  653,  108  Am.  St.  Rep.  480. 

See  the  following  cases: 

United  States:  Central  Trust  Co.  v.  East  Tennessee  Land  Co.  (U.  S.  C.  C), 
116  Fed.  743. 

California:  Burbank  v.  Dennis,  101  Cal.  90,  35  Pac.  444. 

Maine:  Camden  Land  Co.  v.  Lewis,  101  Me.  78,  63  Atl.  523. 

Massachusetts:  Hayward  v.  Leeson,  176  Mass.  310,  57  N.  E.  656,  49 
L.  R.  A.  725. 

Michigan:  Carmody  v.  Powers,  60  Mich.  26,  26  N.  W.  801. 

Missouri:  Exter  v.  Sawyer,  146  Mo.  302,  47  S.  W.  951;  South  JopHn  Land 
Co.  V.  Case,  104  Mo.  572,  16  S.  W.  390. 

New  York:  Brewster  v.  Hatch,  122  N.  Y.  349,  25  N.  E.  505,  19  Am.  St. 
Rep.  498. 

Virginia:  Newberry  Land  Co.  v.  Newberry,  95  Va.  Ill,  27  S.  E.  897. 

West  Virginia:  Richardson  v.  Graham,  45  W.  Va.  134,  30  S.  E.  92. 

Wisconsin:  Pietsch  v.  Milbrath,  123  Wis.  647,  102  N.  W.  342,  101  N.  W. 
388. 

9  Tompkins  v.  Sperry,  Jones  &  Co.,  96  Md.  500,  45  Atl.  254. 

10  Davis  V.  Ravenna  Creamery  Co.,  48  Neb.  471,  67  N.  W.  436. 
Examine  the  following  cases: 

United  States:  Old  Colony  Trust  Co.  v.  Dubuque  Light  &  T.  Co.  (U.  S. 

428 


REMEDIES — PROMOTERS — OI'FICICRS — DIRECTORS,  ETC.       §  260 

tion  which  has  ratified  acts  of  promoters  in  entering  into  a 
contract  prior  to  incorporation  may  become  Hable  for  what 
has  been  done  in  conformity  with  said  contract  which  was 
intended  to  carry  out  the  purposes  authorized  by  the  corporate 
organization.^^ 

The  promise  of  a  single  promoter  of  a  national  bank,  made 
prior  to  incorporation,  that  the  plaintiff  should  be  paid  for 
services  to  be  rendered  in  procuring  subscriptions  to  the  capital 
stock,  will  impose  no  liability  upon  the  bank  after  incorpora- 
tion.^^ 

§  260.  Internal  Management  of  Corporations — General 
Rule. 

The  courts  will  not  as  a  general  rule  interfere  v/ith  the  in- 
ternal management  of  a  corporation.^^  That  is,  to  state  the  rule 
in  another  way,  in  the  absence  of  fraud  or  bad  faith  courts  have 
nothing  to  do  with  the  internal  management  of  business  cor- 
porations provided  they  keep  within  their  corporate  powers.^"* 

C.  C),  89  Fed.  794  (when  corporation  bound  by  contract  of  purchase); 
Winters  v.  Hub.  Min.  Co.,  57  Fed.  287. 

Alabama:  Moore  &  Handley  Hardware  Co.  v.  Towers  Hardware  Co.,  87 
Ala.  206,  6  So.  41. 

California:  San  Joaquin  Land  &  Water  Co.  v.  West,  94  Cal.  399,  20  Pac. 
785. 

Colorado:  Ruby-Chief  Min.  &  Mill.  Co.,  17  Colo.  199,  29  Pac.  668. 

Michigan:  Durgin  v.  Smith,  133  Mich.  331,  10  Detroit  Leg.  N.  215,  94 
N.  W.  1044. 

Minnesota:  McArthur  v.  Times  Printing  Co.,  48  Minn.  319,  51  N.  W.  216. 

Pennsylvania:  Tift  v.  Quaker  City  Nat.  Bank,  141  Pa.  550,  21  Atl.  660. 

Tennessee:  Pittsburg  &  T.  Copper  Min.  Co.  v.  Quintrell,  91  Tenn.  693, 
20  S.  W.  248. 

Texas:  Weatherford  Mineral  Wells  &  Northwestern  Rd.  Co.  v.  Granger, 
86  Tex.  350,  24  S.  W.  795. 

Wisconsin:  Buffington  v.  Bardon,  80  Wis.  635,  50  N.  W.  776. 

11  Stanton  v.  New  York  &  E.  Co.,  59  Conn.  272,  22  Atl.  300.  See  Old 
Colony  Trust  Co.  v.  Dubuque  Light  &  T.  Co.  (U.  S.  C.  C),  89  Fed.  794; 
Weatherford  Mineral  Wells  &  Northwestern  Rd.  Co.  v.  Granger,  86  Tex. 
350,  24  S.  W.  795. 

12  Tift  V.  Quaker  City  National  Bank,  141  Pa.  St.  550,  21  Atl.  660,  9  Ry.  & 
Corp.  L.  J.  426,  affirming  8  Pa.  Co.  A.  606. 

13  Miller  v.  Murray,  17  Colo.  408,  30  Pac.  46. 

14  Schwab  V.  Potter  Co.,  194  N.  Y.  409,  87  N.  E.  670,  affirming  113  N.  Y. 
Supp.  439,  129  App.  Div.  36. 

429 


§  2(30      PARTIES   CONTINUED — RIGHTS   AND   LIABILITIES — 

And  in  order  to  warrant  the  interference  of  a  court,  in  a  stock- 
holder's suit,  with  the  internal  management  of  a  corporation 
it  must  also  appear  that  there  will  otherwise  be  a  failure  of 
justice. ^^ 

Nor  will  the  internal  management  of  a  corporation  be  inter- 
fered with  by  the  court,  at  the  instance  of  a  minority  stock- 
holder, unless  the  majority  stockholders  are  actmg  without 
the  charter  powers,  or  a  strong  case  of  mismanagement,  or 
fraud,  is  shown  .^^  The  minority  stockholders  cannot  come 
into  court  upon  allegations  of  a  want  of  judgment  or  lack  of 
eJSiciency  on  the  part  of  the  majority  and  change  the  course  of 
administration.  Corporate  elections  furnish  the  only  remedy 
for  internal  dissensions,  as  the  majority  must  rule  so  long  as 
it  keeps  within  the  powers  conferred  by  the  charter.^'  Again, 
it  seems,  that  as  to  questions  of  mere  administration,  or  of 
policy,  as  to  which  there  is  an  honest  difference  of  opinion 
among  the  shareholders,  the  will  of  the  majority  should  govern, 
and  so  the  court  would  not  be  justified  in  interfering,  even  in 
doubtful  cases,  where  the  action  of  the  majority  might  be 
susceptible  of  different  constructions.  To  warrant  the  inter- 
position of  the  court  when  the  proposed  action  is  within  the 
corporate  powers,  a  case  must  be  made  out  which  plamly 

15  Miller  v.  Murray,  17  Colo.  408,  30  Pac.  46. 

If  Barton  Lumber  Co.  v.  Enwright,  1.31  Ga.  329,  62  S.  E.  233.  The  court, 
per  Holden,  J.,  said:  "The  right  to  control  the  affairs  of  a  corporation  is 
vested  by  law  in  its  stockholders — those  whose  pecuniary  gain  is  dependant 
upon  its  successful  management.  The  majority  stockholders,  or  the  ma- 
jority of  the  directors,  when  directors  are  chosen  to  act  on  behalf  of  the 
stockholders,  have  the  right  to  determine  the  business  policy  of  the  corpo- 
ration, and  the  minority  must  submit  to  their  judgment  in  such  matters, 
when  exercised  in  good  faith  and  not  involving  vltra  vires,  or  in  breach  of 
trust.  As  was  said  by  this  court  in  Hand  v.  Dexter,  41  Ga.  4.54,  461,  'The 
very  foundation  principle  of  a  corporation  is  that  the  majority  of  its  stock- 
holders have  the  right  to  manage  its  affairs,  so  long  as  they  keep  within  their 
charter  rights.'  No  principle  of  law  is  more  firmly  fixed  in  our  jurisprudence 
than  the  one  which  declares  that  the  courts  will  not  interfere  in  matters 
involving  merely  the  judgment  of  the  majority  in  exercising  control  over 
corporate  affairs." 

17  Schwab  V.  Potter  Co.,  194  N.  Y.  409,  87  N.  E.  670,  affirming  113  N.  Y. 
Supp.  439,  129  App.  Div.  36. 

430 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.       §  261 

shows  that  such  action  is  so  far  opposed  to  the  true  interests 
of  the  corporation  itself  as  to  necessarily  lead  to  the  inference 
that  none  thus  acting  could  have  been  influenced  by  an  honest 
desire  to  secure  such  interests,  but  that  he  must  have  acted 
with  intent  to  subserve  some  outside  purpose,  regardless  of 
the  consequences  to  the  company  and  in  a  manner  inconsistent 
with  its  interests.^* 

§261.  Officers  or  Directors — Duties  and  Liabilities  of, 
Generally — Parties. 

Although  the  relation  of  managing  officers  of  a  corporation 
to  a  stockholder  is  not  strictly  that  of  trustee  and  cestui  que 
trust,  it  is  in  a  sense  fiduciary,  and  their  superior  ])Osition  im- 
poses upon  them  a  duty  to  an  individual  stockholder  not  to 
take  advantage  of  the  opportunity  offered  by  their  position  to 
wrong  him  by  any  affirmative  act  designed  to  injure.  Thus, 
they  may  not  intentionally  abuse  their  power  by  actually  or 
apparently  depressing  the  value  of  stock  for  the  purpose  of 
acquiring  it  from  a  stockholder  at  an  undervaluation,  and, 
having  so  injured  a  stockholder,  it  is  immaterial  that  they  may 
also  have  wronged  the  corporation.  This  is  true  although  the 
stock  purchased  is  that  of  a  private  business  corporation  hav- 
ing no  market  value  .^® 

Each  director  of  a  corporation  is  liable  only  for  his  own  acts 
or  omissions.  One  director  is  not  liable  for  the  acts  or  omis- 
sions of  another  unless  he  participated  therein  to  the  injury 
of  the  corporation,  or  had  some  knowledge  by  which  in  the 
exercise  of  reasonable  care  he  could  have  prevented  the  loss, 
or  unless  he  connived  at  it  or  failed  to  perform  his  duty  of 
exercising  the  authority  he  possessed  to  prevent  loss  which 
could  in  the  exercise  of  reasonable  care  and  skill  have  been 

18  Gamble  v.  Queens  County  Water  Co.,  123  N.  Y.  91,  33  N.  Y.  St.  Rep. 
88,  25  Abb.  N.  C.  410,  25  N.  E.  401,  8  Ry.  &  Corp.  L.  J.  484,  9  L.  R.  A.  527, 
31  Am.  &  Eng.  Corp.  Cas.  313,  reversing  5  N.  Y.  Supp.  124,  52  Hun,  166, 
23  N.  Y.  St.  Rep.  409,  cited  in  Mills  v.  United  States  Printing  Co.,  99  App. 
Div.  605,  617,  91  N.  Y.  Supp.  193,  a  case  as  to  status  of  stockholder  to 
attack  an  agreement  with  a  trade  union  made  by  an  executive  committee 
of  the  corporation. 

19  Von  Au  V.  Magenheimer,  110  N.  Y.  Supp.  629,  126  App.  Div.  257. 

431 


§  2(»1       PARTIES    CONTINUED — RIGHTS    AND    LIABILITIES — 

foreseen  and  guarded  against.  Nor  are  directors  liable  for 
mere  errors  of  judgment  where  they  act  without  corrupt  intent 
and  in  good  faith  and  are  fairlj^  competent  to  discharge  the 
duties  of  the  position,  unless  the  acts  be  unlawful  or  ultra 
vires P 

A  person,  however,  who  contracts  as  agent,  without  having 
in  fact  authority  to  do  so,  is  personally  responsible  to  those, 
who,  in  ignorance  of  his  want  of  authority  contract  with  him, 
though  he  acts  in  good  faith,  believing  that  he  is  invested  with 
such  authority.  This  liability  is  founded  upon  the  implied 
promise  of  the  person  so  contracting  as  agent,  that  he  has 
authority  to  bind  the  principal;  and  the  measure  of  damages 
is  the  loss  sustained  by  the  other  contracting  party  by  reason 
of  his  not  having  the  valid  contract  which  the  agent  assumed 
to  make.  So  under  an  Ohio  decision,  the  corporate  powers, 
business  and  property,  of  corporations  formed  for  profit,  must 
be  exercised,  conducted  and  controlled  by  a  board  of  directors, 
who  cannot  be  chosen  until  ten  per  cent  of  the  capital  stock 
specified  in  the  articles  of  incorporation  has  been  subscribed. 
Persons  contracting  as  directors,  when  less  than  that  amount 
of  stock  has  been  subscribed,  are  without  authority  to  create 
any  corporate  obligation,  and  become  personally  liable,  though 
they  believe  in  good  faith  that  they  are  contracting  in  behalf 
of  a  legally  constituted  corporation,  and  that  they  have  au- 
thority to  bind  it  by  the  contract. ^^ 

Directors  of  a  corporation,  conducting  its  business  and  re- 
ceiving moneys  belonging  to  it  after  the  expiration  of  the  term 
for  which  it  was  incorporated,  will  be  held  to  an  account  on 
the  dissolution  and  the  final  liquidation  of  the  affairs  of  the 
corporation  in  a  court  of  equity .^^  Where  a  corporation  had 
certain  theatrical  leases,  the  right  to  a  renewal  belonged  to  the 
corporation,  and  an  injury  resulting  from  a  wrongful  failure 

20  People  V.  Equitable  Life  Assurance  Society,  109  N.  Y.  Supp.  53,  124 
App.  Div.  714,  rev'g  101  N.  Y.  Supp.  354,  51  Misc.  389. 

21  Trust  Company  v.  Floyd,  47  Ohio  St.  525,  25  Ohio  L.  J.  35,  26  N.  E. 
110,  12  L.  R.  A.  346,  19  Wash.  L.  Rep.  514,  33  Am.  &  Eng.  Corp.  Cas. 
218. 

22  Mason  v.  Pewabic,  133  U.  S.  50,  33  L.  ed.  524,  10  Sup.  Ct.  524. 

432 


REMEDIKS — PKUiMOTERS — OFFICERS — DIRECTORS,  ETC.       §  261 

to  secure  that  right  by  the  malfeasance  of  directors  was  an 
injury  to  the  corporation  for  which  it  was  entitled  to  suc.^^ 

The  word  "creditors"  as  used  in  the  provision  of  a  General 
Manufacturing  Act,^''  making  the  stockholders  of  a  corpora- 
lion  organized  under  it  liable  to  the  creditors  of  the  company 
until  the  whole  amount  of  the  capital  stock  has  been  paid  in 
and  a  certificate  thereof  filed,  does  not  include  directors  of  the 
corporation,  and  a  director  to  whom  the  corporation  has  be- 
come indebted  cannot  enforce  the  liability  so  imposed.  This 
rule  applies  to  one  named  as  a  trustee  in  the  certificate  of  in- 
corporation of  the  company  and  who  acts  as  such,  although 
he  owns  none  of  its  stock;  he  may  legally  act  as  trustee  al- 
though not  a  stockholder.-'^  In  case  of  neglect  or  mismanage- 
ment of  corporate  affairs  by  officers  or  directors  of  a  corpora- 
tion whereby  losses  are  sustained  by  it,  the  recovery  is  for  the 
benefit  of  all  creditors  and  stockholders  regardless  of  the  fact 
as  to  w^hat  party  prosecutes  such  action,  that  is,  whether  it  is 
the  corporation  or  creditors  or  shareholders.-*^ 

In  an  action  against  trustees  for  an  accounting  all  are  neces- 
sary parties  if  a  right  of  contribution  exists;  not  so,  however, 
where  the  action  is  at  law,  for  then  there  is  no  right  to  con- 
tribution. Moreover,  even  if  such  suits  be  in  equity  and  some 
of  the  defendants  be  innocent  of  wrongdoing  and  yet  liable  to 
account  with  others  guilty  of  wrongdoing  there  can  be  no 
contribution  as  between  those  who  neither  participated  in  the 
same  acts  nor  served  on  the  board  of  directors  at  the  same 
time.  Those  sections  of  the  New  York  Code  of  Civil  Proce- 
dure" which  allow  an  action  to  be  brought  by  the  attorney- 
general  on  behalf  of  the  people,  or  in  certain  cases  by  a  creditor, 
trustee,  etc.,  against  the  directors  of  a  corporation  for  mis- 
conduct, do  not  confer  upon  the  parties  enumerated  in  the 

23  Syllabus  in  Singers-Bigger  v.  Young  (U.  S.  C.  C.  A.),  166  Fed.  82. 

24  Section  10,  chap.  40,  Laws  1848. 

25  McDowall  V.  Sheehan,  129  N.  Y.  200,  41  N.  Y.  St.  Rep.  415,  36  Am. 
&  Eng.  Corp.  Cas.  137,  29  N.  E.  299. 

28  Wallace  v.  Lincoln  Savings  Bank,  89  Tenn.  630,  15  S.  W.  448,  9  Ry. 
&  Corp.  L.  J.  482,  13  Am.  &  Eng.  Corp.  Cas.  253,  4  Bkg.  L.  J.  249. 
27  Sections  1781,  1782. 

28  433 


§  2G2       PARTIKS    CONTINUED — KKiHTS    AND    LIABILITIES — 

latter  section  any  new  cause  of  action,  except  in  respect  to  the 
removal  or  suspension  of  directors,  but  merely  authorize  the 
enforcement  by  the  individuals  named  of  causes  of  action 
which  have  accrued  to  the  corporation  and  which  might  be 
enforced  by  it  or  its  receivers,  or  by  a  stockholder  in  behalf  of 
himself  and  all  other  stockholders  in  the  right  of  the  corpora- 
tion. The  action  though  brought  in  the  name  of  the  people  is 
in  the  right  of  the  corporation  and  for  its  benefit  and  to  enforce 
causes  of  action  which  might  have  accrued  to  the  corporation 
and  might  be  enforced  by  it,  or  its  receiver,  or  by  a  stock- 
holder in  behalf  of  himself  and  all  other  stockholders  in  the 
right  of  the  corporation.^* 

§  262.  Suit  by  Corporation  Against  Officers  or  Directors 
—Damages— Accounting. 

No  recovery  can  be  had  by  a  corporation  for  damages  sus- 
tained by  it  by  reason  of  a  mere  error  of  judgment  of  one  of 
its  officers  in  doing  an  act  iiltra  vires  but  in  a  business  carried 
on  by  the  corporation  itself.^^  But  a  corporation  may  sue  one 
or  more  directors  in  equity  for  an  accounting  with  respect  to 
property  of  the  corporation  which  has  actually  come  into  his 
or  their  hands,  or  for  fraudulent  breach  of  trust  in  the  manage- 
ment of  the  corporation  or  its  property  and  for  the  recovery  of 
the  value  of  property  lost  and  incidental  damages.  So,  too,  it 
has  an  action  at  law  against  one  or  more  directors  for  damages 
sustained  by  the  corporation  in  conseciuence  of  his  or  their 
wrongful,  negligent  official  acts  of  misfeasance  or  nonfeasance. 
But  a  suit  in  equity  may  not  be  joined  with  an  action  at  law 
against  the  same  directors.^" 

28  People  V.  Equitable  Life  Assur.  Soc,  109  N.  Y.  Supp.  53,  124  App. 
Div.  714,  729,  reversing  101  N.  Y.  Supp.  354,  51  Misc.  389.  In  this  case 
the  action  was  by  the  attorney-general  against  former  a«d  present  directors 
and  the  corporation  was  joined  as  defendant  for  an  accounting  for  funds  and 
for  repayment. 

29  Holmes  v.  Willard,  125  N.  Y.  75,  34  N.  Y.  St.  Rep.  455,  25  N.  E.  1089, 
9  Ry.  &  Corp.  L.  J.  117,  .33  Am.  &  Eng.  Corp.  Cas.  .385. 

30  People  V.  Equitable  Life  Assur.  Soc,  109  N.  Y.  Supp.  53,  124  App. 
Div.  714,  reversing  101  N.  Y.  Supp.  354,  51  Misc.  389. 

434 


REMEDIES — PROMOTERS— OFF1('Ii;RS — DIRECTORS,  ETC.       §  263 

s^  263.  Suit  by  Stockholders  Against  Officers  or  Directors 
— Corporation  as  Party. 

Stockholders  may  sue  for  an  accounting  against  corporation 
officers  with  assets  where  the  rights  of  parties  would  otherwise 
be  lost,  and  the  corporation  in  such  case  should  be  made  a  party 
defendant.  Although  ordinarily  the  corporation  itself  should 
bring  suit  for  such  accounting  .^^ 

An  individual  stockholder  who  has  been  induced  to  sell  her 
stock  to  the  managing  officers  of  a  corporation  for  an  inade- 
quate consideration  by  means  of  false  representations  as  to 
the  condition  of  the  company  and  the  amount  of  dividends  it 
could  pay,  has  an  action  on  the  case  for  damages,  even  though 
the  fraud  may  have  wronged  the  corporation  and  would  sup- 
port an  action  on  its  behalf  by  a  stockholder.  Where  in  such 
an  action  it  appears  that  the  defendant  officers  owning  a  large 
percentage  of  the  stock,  which  had  previously  paid  dividends 
from  nine  to  fourteen  per  cent,  declared  only  a  three  per  cent 
dividend  and  represented  to  the  plaintiff,  a  stockholder,  that 
the  company  had  suffered  reverses,  and  at  the  same  time  in- 
creased their  own  salaries  from  two  thousand  five  hundred 
dollars  to  seven  thousand  five  hundred,  but  the  day  after 
purchasing  plaintiff's  stock,  and  less  than  a  month  from  the 
time  they  declared  said  dividend,  declared  a  special  dividend 
of  ten  per  cent  and  used  the  proceeds  to  meet  the  check  given 
to  the  plaintiff  in  payment  for  her  stock,  and  at  the  next  regular 
meeting  reduced  the  salaries  of  the  officers  to  four  thousand, 
a  case  of  fraud  and  deceit  is  established.^^  Where,  however, 
the  loss  suffered  by  a  stockholder,  by  reason  of  the  wrongful 
and  malicious  acts  of  corporate  officers  done  with  specific 
intent  to  injure  him,  is  not  in  addition  to  that  which  the  cor- 
poration has  sustained  he  cannot  maintain  any  action  there- 
for .^^  Individual  stockholders  cannot  question  in  judicial  pro- 
ceedings, the  corporate  acts  of  directors,  if  such  acts  are 
within  the  power  and  in  furtherance  of  the  purposes  of  the 

31  Byers  v.  Rollins,  13  Colo.  22,  21  Pac.  894. 

32  Von  Au  V.  Magenheimer,  110  N.  Y.  Supp.  629,  126  App.  Div.  257. 

33  Wells  V.  Dane,  101  Me.  67,  63  Atl.  324. 

435 


§  263      PARTIES   CONTINUED — RIGHTS   AND   LIABILITIES — 

corporation,  are  done  in  good  faith,  in  the  exercise  of  an  honest 
judgment,  and  are  not  unlawful  or  contrary  to  good  morals. 
Questions  of  policy  of  management,  of  expediency  of  contracts 
or  action,  of  adequacy  of  consideration  not  grossly  dispropor- 
tionate, or  of  lawful  appropriation  of  corporate  funds  to  ad- 
vance corporate  interests,  are  left  solely  to  the  honest  decision 
of  the  directors  if  their  powers  are  without  limitation  and  free 
from  restraint.^"*  An  action  at  law  cannot  be  maintained  by  a 
single  stockholder  against  the  corporation  directors  for  mis- 
management of  its  affairs  or  for  defrauding  it,  since  such  di- 
rectors stand  in  the  relation  of  agents  to  the  company  and  are 
liable  only  to  it  as  their  principal  for  their  acts.^^  Although, 
by  reason  of  the  payment  of  excessive  dividends  a  deficit  exists 
recovery  cannot  be  had  by  a  shareholder  in  a  suit  against  the 
directors  .^"^  The  fact  that  an  offer  to  purchase  the  corporate 
property  has  not  been  communicated  to  the  stockholders  by 
the  directors  does  not  render  them  liable  to  the  stockholders 
for  effecting  in  pursuance  of  a  vote  of  the  stocldiolders  a  lease 
of  the  corporate  property,  it  not  appearing  that  the  stock- 
holders would  have  acted  differently  had  they  had  knowledge 
of  such  offer  or  that  there  was  a  responsible  offer.^''  The  cor- 
poration is  a  necessary  party  defendant  in  an  action  by  one  or 
more  stockliolders,  brought  for  the  benefit  of  all,  against  the 
corporate  directors  for  misappropriating  funds,  and  even  in 
an  equitable  action  the  failure  to  do  so  is  not  excused  by 
averments  of  inability  to  make  service  upon  such  corporation 
in  the  State  where  the  action  is  brought,  that  it  was  organized 
under  the  law  of  another  State,  and  that  it  refuses  to  appear; 
nor  is  such  failure  excused  by  a  prayer  to  appoint  a  trustee 
to  hold  such  moneys  as  may  be  found  due.^^ 

34  EUerman  v.  Chicago  Junction  Rys.  &  Union  Stock  Yards  Co.,  49  N.  J. 
Eq.  217,  23  Atl.  287,  11  Ry.  &  Corp.  L.  J.  97,  35  Am.  &  Eng.  Corp.  Cas. 

388. 

35  Allen  V.  Curtis,  26  Conn.  456. 

36  Wallace  v.  Lincoln  Savings  Bank,  89  Tenn.  630,  15  S.  W.  448,  9  Ry. 
&  Corp.  L.  J.  482,  13  Am.  &  Eng.  Corp.  Cas.  253,  4  Bkg.  L.  J.  249. 

37  Strunk  v.  Owen,  199  Pa.  St.  73,  48  Atl.  888. 

38  Deming  v.  Beatty  Oil  Co.,  72  Kan.  614,  84  Pac.  385. 

436 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.       §  264 

§  264.  Suit  by  Stockholders  Against  Directors  ^Negli- 
gence  — Maladministration  — Averments  Necessary  — What 
Must  Be  Shown. 

In  an  action  against  directors  of  a  corporation  for  negli- 
gently wasting  the  property  of  the  corporation  brought  under 
the  New  York  Code  of  Civil  Procedure,^''  the  plaintiff  must 
allege  the  facts  constituting  negligence  or  misconduct,  mis- 
feasance or  malfeasance  the  same  as  if  the  action  had  been 
brought  by  the  corporation  itself.  It  was  not  the  intention  of 
the  legislature  in  enacting  the  New  York  Code  of  Civil  Pro- 
cedure ''°  to  require  directors  of  a  corporation  to  account  as  in 
cases  of  trustees  of  express  trusts  and  more  must  be  alleged 
than  the  mere  fact  that  the  defendant  was  a  director.  Thus, 
where  a  defendant  is  sued  solely  for  acts  of  omission  as  a 
director  and  it  is  not  alleged  that  he  received  any  property 
of  the  corporation  for  which  he  failed  to  account,  or  voted  in 
favor  of  any  unlawful  disposition  of  corporate  property  or 
fraudulently  connived  thereat,  or  was  guilty  of  any  breach  of 
trust,  and  he  is  not  charged  with  having  profited  directly  or 
indirectly  by  any  of  the  acts  of  other  defendants  vested  with 
executive  functions,  and  it  is  not  charged  that  he  was  guilty 
of  neghgence  in  failing  to  insist  upon  the  adoption  of  appro- 
priate by-laws  to  safeguard  the  corporation,  or  in  voting  for 
officers  or  approving  the  appointment  of  employes  or  in  voting 
for  or  refraining  from  voting  against  any  specific  action  of  the 
directors,  or  that  he  had  any  knowledge  or  reason  to  suspect 
misconduct  of  members  of  executive  conunittees  or  other  offi- 
cers or  employes  of  the  corporation,  or  that  he  has  failed  to 
take  part  in  the  proceedings  at  any  meetings  of  the  directors 
at  which  he  should  have  attended,  or  has  been  guilty  of  any- 
thing more  than  an  honest  error  of  judgment,  the  complaint 
fails  to  state  a  cause  of  action  against  him.''!  In  a  case  in  the 
United  States  Supreme  Court  which  has  very  often  been  cited 

39  Section  1781. 

40  Sections  1781,  1782. 

«  People  V.  Equitable  Life  Assur.  Soc,  109  N.  Y.  Supp.  53,  124  App. 
Div.  714,  reversing  101  N.  Y.  Supp.  354,  51  Misc.  389. 

437 


§  2G5      PARTIES   CONTINUED — RIGHTS   AND    LIABILITIES — 

and  quoted  from,  a  shareholder  m  a  waterworks  company 
brought  his  bill  in  equity  against  a  city,  the  company  and  its 
directors,  alleging  that  the  company  was  furnishing  the  city 
with  water,  free  of  charge  beyond  what  the  law  required  it  to 
do,  and  that  the  directors,  contrary  to  his  request,  continued 
to  do  so  to  the  great  injury  of  himself,  the  other  shareholders 
and  the  company.  It  was  held  that  in  such  case  there  must 
be  shown:  (1)  Some  action  or  threatened  action  of  the  directors 
or  trustees  which  is  beyond  the  authority  conferred  by  the 
charter,  or  the  law  under  which  the  company  was  organized; 
or  (2)  such  a  fraudulent  transaction,  completed  or  threatened, 
by  them,  either  among  themselves  or  with  some  other  party, 
or  with  shareholders,  as  will  result  in  serious  injury  to  the 
company  or  the  other  shareholders;  (3)  that  the  directors,  or 
a  majority  of  them,  are  acting  for  their  own  interests,  in  a 
manner  destructive  of  the  company,  or  of  the  rights  of  the  other 
shareholders;  or  (4)  that  the  majority  of  the  shareholders  are 
oppressively  and  illegally  pursuing,  in  the  name  of  the  com- 
pany, a  course  in  \'iolation  of  the  rights  of  the  other  share- 
holders, which  can  only  be  restrained  by  a  court  of  equity; 
and  (5)  it  must  also  be  made  to  appear  that  the  complainant 
made  an  earnest  effort  to  obtain  redress  at  the  hands  of  the 
directors  and  shareholders  of  the  corporation,  and  that  the 
ownership  of  the  stock  was  vested  in  him  at  the  time  of  the 
transactions  of  which  he  complains,  or  was  thereafter  trans- 
ferred to  him  by  operation  of  law.'*^ 

§  265.  Individual  Liability  of  Officers  and  Trustees  to 
Creditors  Where  Capital  Stock  Not  Subscribed — Suit  in 
Equity  by  Creditors  Against  Directors. 

Officers  and  trustees  of  corporations  are  not  individually 
liable  to  the  corporation  creditors  because  the  capital  stock 
of  the  corporation  was  not  subscribed  where  the  statute  does 
not  impose  individual  liability  in  express  terms  and  where 
subscription  to  the  capital  stock  is  not  essential  to  the  legal 
existence  of  a  corporation;  unless  liability  is  fixed  by  the  mere 
«  Hawes  v.  Oakland,  104  U.  S.  450,  26  L.  ed.  827. 
438 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.       §  266 

act  of  transacting  business  before  the  whole  capital  stock  was 
subscribed ."^^  Equity  will  permit  defrauded  creditors  to  sue 
directors  of  a  dissolved  corporation  to  recover  assets  or  money 
which  the  directors  have  wrongfully  converted ."^ 

§  266.  Suits  by  and  Rights  of  Minority  Stockholders— 
When  Corporation  Should  Be  Made  Party. 

Where  the  action  resulting  from  the  votes  of  the  shareholders 
owning  a  majority  of  the  stock  of  a  corporation  is  so  detri- 
mental to  the  corporation  itself  as  to  lead  to  the  necessary 

*3  American  Radiator  Co.  v.  Kinnear  (Wash.,  1909),  105  Pac.  630,  a  case 
of  action  by  the  plaintiff  corporation  against  certain  parties  as  officers  and 
trustees  of  a  manufacturing  company.  The  court,  per  Rudkin,  C.  J.,  said: 
"  Cases  may  be  found  where  officers  of  corporations  have  been  held  indi- 
vidually liable  to  the  corporation  creditors  because  the  capital  stock  of 
tlie  corporation  was  not  subscribed,  but  these  cases  rest  upon  an  express 
statute  imposing  individual  liability  in  such  cases,  or  upon  the  ground  that 
there  is  no  corporation  until  the  capital  stock  is  subscribed.  In  First  Na- 
tional Bank  of  Salem  v.  Almy,  117  Mass.  47G,  and  Cummings  v.  Winn,  89 
Mo.  51,  14  S.  W.  512,  cited  by  the  appellant,  the  liability  was  based  upon 
an  express  statute,  and  similar  statutes  exist  in  many  of  the  States.  In 
Walton  V.  Oliver,  49  Kan.  107,  30  Pac.  172,  33  Am.  St.  Rep.  355,  and 
Wechselberg  v.  Flour  City  Bank,  64  Fed.  90,  12  C.  C.  A.  56,  26  L.  R.  A.  470, 
the  individual  liability  was  upheld  on  the  ground  that  there  was  no  cor- 
poration to  be  bound.  These  decisions  are  not  controUing  here,  for  our 
statute  does  not  impose  individual  liability  in  express  terms,  and  subscrip- 
tion to  the  capital  stock  is  not  essential  to  the  legal  existence  of  a  corpora- 
tion. Spokane  v.  Amsterdamsch  Trustees  Kantoor,  22  Wash.  172,  60  Pac. 
141.  For  the  like  reason.  Farmers'  Co-op.  Trust  Co.  v.  Floyd,  47  Ohio  St. 
525,  26  N.  E.  110,  12  L.  R.  A.  346,  21  Am.  St.  Rep.  846,  and  other  like  cases, 
basing  liability  on  excess  of  authority  of  corporate  agents,  are  inapplicable, 
for  if  the  corporation  is  bound  there  is  no  excess  of  authority.  The  very 
fact  that  the  appellant  recovered  judgment  against  the  corporation  affords 
conclusive  evidence  that  the  trustees  in  contracting  the  debt  did  not  exceed 
their  authority.  For  these  reasons  there  is  no  liability  on  the  part  of  the 
respondents  in  the  present  case,  unless  their  liability  is  fixed  by  the  mere 
act  of  transacting  business  before  the  whole  capital  stock  was  subscribed. 
Wliile  there  is  some  conflict  of  authority  on  this  question,  the  weight  of  au- 
thority denies  individual  liability  in  such  cases,  holding  that  the  State  alone 
can  complain  of  the  violation  of  its  laws."  The  court  then  considers  and 
quotes  from  Whitney  v.  Wyman,  101  U.  S.  392,  25  L.  ed.  1050,  and  quotes 
at  length  from  Snider  Sons'  Co.  v.  Troy,  91  Ala.  224,  8  So.  658,  11  L.  R.  A. 
515,  24  Am.  St.  Rep.  887,  and  also  relies  upon  Title  23,  chap.  1,  1  BaUinger's 
Ann.  Codes  &  St.,  §§  4250,  4265,  4266  (Pierce's  Code,  §§  7063,  7067,  7068). 
«  Lewisohii  v.  Stoddard,  78  Conn.  575,  63  Atl.  621. 

439 


§  2G6      PARTIES   CONTINUED — RIGHTS   AND    LIABILITIES — 

inference  that  the  interests  of  the  majority  he  wholly  outside 
of  and  in  opposition  to  the  interests  of  the  corporation  and  of  a 
minority  of  the  stockholders  and  that  such  action  is  a  wanton 
or  fraudulent  destruction  of  the  rights  of  the  minority,  it  may 
be  subjected  to  the  scrutiny  of  a  court  of  equity  at  the  suit  of 
the  minority  shareholders,  and  where,  in  such  case,  the  di- 
rectors or  trustees  have  acted  with  and  formed  part  of  the 
majority,  an  action  may  be  sustained  by  one  of  the  minoiity 
shareholders,  suing  in  his  own  behalf  and  in  that  of  all  others 
coming  in,  to  enjoin  the  action  contemplated;  in  such  suit  the 
corporation  should  be  made  a  party  defendant ."^^  In  order, 
however,  to  give  a  standing  in  a  court  of  equity  to  a  small 
minority  of  stockholders  contesting  an  ultra  vires  act  of  the 
directors,  against  which  a  large  majority  makes  no  objection, 
it  must  appear  that  they  have  exliausted  all  the  means  within 
their  reach  to  obtain  redress  of  their  grievances  within  the 
corporation  itself,  and  that  they  were  stockholders  at  the  time 
of  the  transactions  complained  of,  or  that  the  shares  have 
devolved  upon  them  since  by  operation  of  law.'*^  Where  the 
statute  requires  that  the  question  of  a  lease  be  submitted  to 
a  vote  of  the  stockliolders  and  the  lease  is  made  without  com- 
pliance with  such  requirement  a  bill  to  set  aside  the  lease  may 
be  maintained  by  minority  stockholders.'*''    A  court  of  equity 

«  Gamble  v.  Queens  County  Water  Co.,  123  N.  Y.  91,  33  N.  Y.  St.  Rep. 
88,  25  Abb.  N.  C.  410,  25  N.  E.  401,  8  Ry.  &  Corp.  L.  J.  484,  9  L.  R.  A.  527, 
31  Am.  &  Eng.  Corp.  Cas.  313,  reversing  5  N.  Y.  Supp.  124,  52  Hun,  166, 
23  N.  Y.  St.  Rep.  409,  cited  in  Farmers'  Loan  &  Trust  Co.  v.  New  York  & 
Northern  Ry.  Co.,  150  N.  Y.  410,  426  (as  to  right  of  minority  stockholders 
to  come  into  equity  for  relief  where  act  of  majority  is  fraudulent,  etc.); 
Rathbone  v.  Ayer,  121  App.  Div.  355,  360,  105  N.  Y.  Supp.  1044  (a  case 
of  sale  by  directors  to  corporation;  fair  price  of  property;  good  faith,  etc.), 
cited  and  quoted  from  in  Continental  Ins.  Co.  v.  New  York  &  Harlem  Rd. 
Co.,  103  App.  Div.  282,  297,  93  N.  Y.  Supp.  39  (as  to  circumstances  under 
which  minority  stockholders  can  maintain  an  action  in  equity  to  rescind 
act  of  majority). 

48  Dimpfell  v.  Ohio  &  Mississippi  Ry.  Co.,  110  U.  S.  209,  3  Sup.  Ct.  357, 
28  L.  ed.  121. 

Right  of  minority  stockholder  to  sue  in  equity;  laches.  See  Alexander 
V.  Searcy,  81  Ga.  536,  12  Am.  St.  Rep.  .337. 

47  Rogers  v.  Nashville,  C.  &  St.  L.  R.  Co.  (U.  S.  C.  C.  A.),  91  Fed.  294, 

440 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.       §  26G 

has  power  at  the  suit  of  a  minority  of  the  stockliolders  to  order 
a  dividend  of  the  corporation's  assets  where  the  safety  of  the 
interests  of  the  minority  requires  it.  In  determining  whether 
to  exercise  such  powers  in  a  particular  case,  the  object  of  the 
corporation  and  the  situation  of  its  affairs  must  be  taken  into 
consideration.  So  where  a  majority  of  the  stockholders  have 
combined  to  so  manage  the  corporate  business  as  to  divert  all 
the  profits  of  the  enterprise  from  their  legitimate  channel  and 
destination,  and  to  appropriate  them  to  their  own  use,  and 
have  in  part  executed  their  plan,  and  the  circumstances  are 
such  as  to  render  any  change  in  the  personnel  of  the  manage- 
ment impracticable,  a  proper  case  exists  for  the  intervention 
of  the  court  to  make  division  of  the  assets.^^ 

Equity  will  also  grant  relief  to  a  minority  stockholder  in  a 
corporation  by  the  appointment  of  a  receiver  where  there  was 
collusion  between  the  officers  to  unfairly  deal  with  the  plain- 
tiff by  dismissing  him  from  office  and  absorbing  the  profits  of 
the  business  in  large  increased  salaries  to  themselves.^^  A 
recovery  cannot,  however,  be  had  from  a  board  of  directors 
because  of  a  loss  sustained  by  minority  stockholders  conse- 
quent upon  the  winding  up  and  liquidation  of  the  corporate 
affairs  by  reason  of  the  acts  of  the  majority  of  the  stock- 
holders.^" A  bill  will  also  be  dismissed  for  want  of  equity 
when  brought  by  a  minority  stockholder  of  a  trading  corpora- 
tion when,  although  it  complains  of  the  management  of  the 
majority  still  it  does  not  sufficiently  and  specifically  allege 
any  ultra  vires  or  prima  facie  fraudulent  act,  but  deals  only 
in  general  suggestions  and  allegations  of  fraud  and  conspiracy, 
and  all  the  allegations  of  fact  relate  only  to  the  ordinary  busi- 
ness and  management  of  the  corporation,  while  the  real  grava- 
men of  the  bill  appears  to  be  that  a  near  relative  is  not  per- 
mitted to  be  an  active  official,  president,  director  or  clerk  in 

33  C.  C.  A.  517,  62  U.  S.  App.  49,  697,  10  Am.  &  Eng.  Corp.  Cas.  (N.  S.) 
82. 

48  Fongeray  v.  Cord,  50  N.  J.  Eq.  185,  24  Atl.  499,  12  Ry.  &  Corp.  L.  J.  89. 

«  Hampton  v.  Buchanan,  51  Wash.  155,  98  Pac.  374. 

5oTrisconi  v.  Winship,  43  La.  Ann.  45,  9  So.  29,  9  Ry.  &  Corp.  L.  J.  469, 
33  Am.  &  Eng.  Corp.  Cas.  271. 

441 


§  2G7      PARTIES   CONTINUED — RIGHTS   AND   LIABILITIES — 

the  corporation  and  in  such  capacity  to  represent  plaintiff's 
interest  as  he  formerly  did.  Such  averments  do  not  warrant 
an  injunction  restraining  the  dissipation  of  assets  or  the 
retention  of  the  bill  for  the  purpose  of  ascertaining  the  value 
of  complainant's  stock  with  a  view  to  compel  the  corporation 
or  the  majority  stockholders  to  buy  or  pay  for  the  same, 
especially  when  to  carry  out  such  a  purpose  would  be  either 
to  force  a  liquidation  of  the  corporation  not  insolvent,  or  the 
majority  stockholders  to  buy  or  sell  to  protect  their  interests .^^ 
That  a  corporation  may  be  involved  in  litigation  by  the  acts 
of  a  majority  of  the  stockholders  does  not  constitute  a  suffi- 
cient ground  for  equity  to  interfere  at  the  suit  of  the  minority 
stockholders.^^ 

§  267.  Suits  by  and  Rights  of  Minority  Stockholders — 
Creating  New  Corporation — Consolidation  Agreement. 

In  a  late  case  in  the  Court  of  Appeals  of  New  York  a  pro- 
posed plan,  by  which  a  majority  of  the  stockholders  of  a  cor- 
poration authorized,  empowered  and  directed  its  directors  to 
create  a  new  corporation  in  which  the  old  corporation  should 
be  the  only  stockholder  with  only  the  capital  of  the  old  cor- 
poration, was  examined  and  held  to  be  an  evasion  of  the  law, 
which  does  not  permit  one  corporation  to  create  another, 
endow  it  with  capital  from  its  own  assets  and  take  all  its  shares 
of  stock  in  exchange  and  hold  them  for  sale.  Therefore,  a 
minority  stockholder  who  opposed  the  scheme  was  held  en- 
titled to  an  injunction,  even  without  alleging  injury  or  the 
certainty  thereof  in  the  future;  and  in  such  case  the  fact  that 
the  agreement  to  sell  was  claimed  to  have  been  ratified  by  two- 
thirds  of  the  stockholders  does  not  validate  the  method  of 
selling  as  to  any  stockholder  who  objected,  since  ratification 
may  confirm  a  voidable  act  but  not  one  utterly  void.^^ 

51  Thomas  &  Barton  Co.  v.  Thomas  (U.  S.  C.  C.  A.),  165  Fed.  29. 

52  Converse  v.  Hood,  149  Mass.  471,  21  N.  E.  878,  4  L.  R.  A.  521. 

53  Schwab  V.  Potter  Co.,  194  N.  Y.  409,  87  N.  E.  670,  affirming  113  N.  Y. 
Supp.  439,  129  x\pp.  Div.  36.  (1)  The  decision  in  this  case  in  the  court 
below  was  as  follows:  The  complaint  of  a  minority  stockholder  which  in 

442 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.       §  267 

A  consolidation  agreement  entered  into  by  the  directors  of 
two  corporations  is  neitlier  void  nor  voidable  at  the  election 
of  a  minority  stockholder,  merely  on  the  ground  that  the 
directors  making  the  agreement  were  the  common  directors 
of  both  corporations,  or  on  the  ground  that  the  consolidation 
may  be  practically  a  sale  to  one  of  the  corporations  which  is 
a  majority  stockholder  of  the  other  corporation.  And  one 
purchasing  stock  in  a  corporation,  organized  for  a  specified 
period,  cannot  object  to  its  subsequent  exercise,  in  a  legal 
manner,  of  the  power  to  consolidate  with  another  corporation, 
where  the  power  existed  at  the  time  of  the  purchase,  but  was 
conferred  subsequent  to  its  organization,  but  the  right  to  ob- 
ject to  the  consolidation  belongs  only  to  the  persons  who  were 
shareholders  before  the  power  to  consolidate  was  given. 
Again,  in  this  connection  it  may  be  stated  that  individual 
stockholders  are  not  trustees  for  each  other,  but  each  may, 
as  a  member  of  the  general  corporate  body,  exercise  his  in- 
dividual right  and  vote  equally  with  other  stockholders  on 
the  ratification  of  a  contract  in  which  he  is  interested,  sub- 
ject to  the  qualification  that  the  majority  stockholders  cannot 

substance  alleges  that  at  a  meeting  the  majority  stockholders  directed  the 
organization  of  another  corporation  at  the  expense  of  their  own  corporation 
and  that  real  estate  owned  by  their  corporation  should  be  transferred  to  the 
new  corporation  at  an  inadequate  price  in  exchange  for  all  its  capital  stock 
which  the  directors  were  empowered  to  offer  for  sale  to  stockholders  on 
certain  terms,  and  praying  that  the  proposed  transaction  be  enjoined, 
states  a  cause  of  action.  (2)  This,  because  while  an  act  within  the  powers 
of  directors  and  majority  stockholders  will  not  be  interfered  with  by  the 
courts  in  the  absence  of  fraud,  the  scheme  aforesaid  is  a  mere  device  to 
increase  the  capital  stock  of  the  corporation  without  complying  with  the 
statute  governing  such  proceeding,  and  hence  the  proposed  action  is  ultra 
vires.  (3)  A  minority  stockholder  who  does  not  desire  to  pay  what  is  in 
effect  a  forced  assessment  by  subscribing  for  the  stock  of  the  new  corpora- 
tion in  order  to  preserve  his  proportionate  interest  in  his  corporation,  is  a 
party  aggrieved  and  entitled  to  sue  for  an  injunction.  (4)  It  is  no  answer 
to  said  complaint  to  allege  that  it  was  necessary  to  sell  the  property  at  a 
certain  sum,  or  even  less,  to  conserve  the  interests  of  the  stockholders,  that 
being  a  mere  conclusion.  (5)  Nor  is  it  a  defense  to  allege  that  an  agreement 
to  sell  the  property  pursuant  to  said  resolution  was  ratified  and  confirmed 
by  the  majority  stockholders,  for  they  could  not  ratify  an  act  which  was 
unlawful. 

443 


§  268      PARTIES   CONTINUED — RIGHTS   AND    LIABILITIES — 

SO  deal  with  the  assets  of  the  corporation  as  to  divide  them 
between  themselves  to  the  exclusion  of  the  minority.^'* 

§  268.  When  Stockholder  May  and  May  Not  Sue  in 
Equity. 

A  stockholder  may  sue  for  an  injunction  to  prevent  ultra 
vires  acts  of  the  corporation.^^  A  demurrer  to  a  stockholder's 
bill  will  not  be  sustained  on  the  ground  that  the  corporation 
itself  must  sue  for  the  relief  prayed  for,  where  the  bill,  which 
asks  for  an  accounting  and  the  appointment  of  a  receiver, 
shows  the  passage  of  a  resolution  several  years  prior  thereto 
by  the  stockholders  of  a  bank,  of  which  the  defendants  were 
directors,  whereby  the  corporate  affairs  were  to  be  wound  up 
and  the  stock  with  the  profits  thereon  were  to  be  returned  to 
the  stockholders  by  the  bank's  officers;  but  that  notwith- 
standing such  resolution  only  a  part  of  said  stock  had  been 
returned  and  the  business  was  still  carried  on  at  a  great  loss 
of  assets  consequent  upon  the  business  inability  of  said  officers 
and  that  the  complainant  had  been  unable  to  obtain  a  dis- 
tribution of  her  stock  or  any  information  concerning  the  bank's 
affairs .^^  Stockholders,  although  controlled  by  action  of  the 
directors,  cannot  fraudulently  repurchase  stock  and  sell  it 
back  to  the  corporation  at  an  advance  on  the  market  price, 
where  the  original  purpose  for  which  such  stock  was  given 
them  was  to  sell  the  same  and  pay  certain  corporate  debts  out 
of  the  proceeds,  but  they  converted  such  proceeds  for  re- 
purchasing; and  stockholders  who  do  not  consent  thereto  are 
not  bound  by  a  ratification  of  the  fraudulent  sale  made  by  a 
majority  of  the  stockholders."  A  single  stockholder  cannot 
sustain  a  suit  to  set  aside  a  sale  at  pul^lic  auction,  after  due 
notice  and  advertising,  of  a  part  of  the  property  of  a  corpora- 
tion, made  for  the  purpose  of  pajdng  debts  incurred  by  trustees 

54  Colgate  V.  United  States  Leather  Co.,  73  N.  J.  Eq.  72,  72  Atl.  126. 

55Teachout  v,  Des  Moines  Broad  Gauge  Street  Rd.  Co.,  75  Iowa,  722, 
38  N.  W.  145. 

56  Matthews  v.  Bank  of  Allendale,  60  S.  C.  183,  38  S.  E.  437. 

57Woodrooff  V.  Howes,  88  Cal.  184,  26  Pac.  Ill,  9  Ry.  &  Corp.  L.  J. 
352,  a  suit  in  equity  brought  by  three  stockholders  against  a  corporation. 

444 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.       §  269 

and  ill  furtherance  of  an  authority  conferred  at  a  stockholder's 
meeting  where  the  full  worth  of  the  property  was  obtained  and 
was  approved  by  the  stockholders  who  had  combined  to  pro- 
tect the  property  from  being  sold  at  a  sacrifice,  and  in  whose 
interest  one  of  the  trustees  who  was  the  secretary  had  pur- 
chased the  property.^*  And  where  one  corporation  attempts 
to  infringe  a  trade-mark  of  another  corporation  and  to  inter- 
fere with  its  business  a  suit  cannot  be  brought  by  a  stock- 
holder of  the  latter  corporation  to  restrain  such  acts.^® 

Although  there  was  an  agreement  between  the  original 
stockholders  of  a  corporation  providing  that  if  unissued  stock 
were  offered  for  purchase  all  parties  should  have  a  right  to 
purchase  an  equal  amount  thereof,  a  stockholder  deriving  her 
title  under  a  will  of  one  of  the  parties  to  the  agreement,  which 
will  provided  that  the  conditions  of  the  agreement  should  be 
binding  upon  his  representatives  and  legatees,  is  not  entitled 
to  maintain  a  suit  as  a  stockholder  representing  the  corporation 
to  have  a  sale  of  stock  to  an  employe  of  the  company  canceled 
upon  the  ground  that  she  was  not  offered  an  opportunity  to 
subscribe  for  a  proportionate  part  of  the  shares  sold.  This, 
because  the  corporation  itself  not  being  a  party  to  the  agree- 
ment could  not  bring  such  action,  and  whatever  rights  the 
plaintiff  had  under  the  will  were  personal  to  her  and  to  be 
asserted  against  the  parties  to  the  agreement.  Such  action 
cannot  be  based  upon  fraud  perpetrated  upon  the  corporation 
where  it  appears  that  all  stockholders  with  the  exception  of 
the  plaintiff  acquiesced  in  the  sale  and  that  the  directors  sub- 
sequently ratified  the  same  by  resolution.^'' 

§  269.  Right  of  Stockholders  to  Sue  in  Equity  in  a 
Federal  Court  for  Surplus  Assets  After  Decree  of  Forfeiture 
of  Franchises. 

In  a  case  decided  in  1855  in  the  Supreme  Court  of  the  United 
States  it  appeared  that  in  the  State  of  Mississippi  a  judgment 

58  Hayden  v.  Official  Hotel  Red-Book  &  D.  Co.  (U.  S.  C.  C),  42  Fed.  875. 

59  Converse  v.  Hood,  149  Mass.  471,  21  N.  E.  S7S,  4  L.  R.  A.  521. 

60  Waters  v.  Waters  &  Co.,  115  N.  Y.  Supp.  432,  130  App.  Div.  678. 

445 


§270      PARTIES    CONTINUED — RIGHTS    AND    LIABILITIES — 

of  forfeiture  was  rendered  against  the  Commercial  Bank  of 
Natchez,  and  a  trustee  was  appointed  to  take  charge  of  the 
books  and  assets  of  the  bank.  Under  the  laws  of  that  State 
and  the  general  principles  of  equity  jurisprudence,  the  surplus 
of  the  assets  which  might  remain  after  the  payment  of  debts 
and  expenses,  was  held  to  belong  to  the  stockholders  of  the 
bank.  The  court  examined  the  Enghsh  cases  as  to  what  be- 
comes of  the  property  of  a  corporation  whose  charter  had  been 
forfeited  by  a  judicial  sentence  and  determined  that  the  rules 
of  the  English  courts  had  been  adopted  in  the  United  States, 
extending  the  protection  of  chancery  over  the  civil  rights  of 
members  of  moneyed  corporations,  and  recognizing  the  exist- 
ence of  distinct  and  individual  rights  in  their  capital  and 
business;  that  the  trustee  was  estopped  from  denying  the  title 
of  the  stockholders  to  a  distribution;  that  the  courts  of  the 
United  States  had  jurisdiction  over  such  a  case;  and  that  a 
bill  could  be  mamtained,  filed  by  a  number  of  stockholders 
owning  one-fifth  part  of  the  capital  stock,  suing  for  themselves 
and  such  of  the  stockholders  as  were  not  citizens  of  Mississippi 
nor  defendants  in  the  bill.^^ 

§  270.  Suit  by  Stockholder  Against  Trustee  of  Funds  for 
Dividends — Defense— ^Counterclaim. 

Where  trustees  acting  under  an  agreement  for  the  voluntary 
dissolution  of  a  corporation  taken  pursuant  to  the  Stock 
Corporation  Law  of  New  York,^^  qj.  ^t  least  taken  along  hues 
quite  similar  to  those  prescribed  by  such  statute,  declare  a 
dividend  upon  the  stock  of  the  corporation,  deposit  the  funds 
apphcable  to  the  payment  of  the  dividend  with  a  trust  com- 
pany, acting  as  their  agent  in  the  matter,  and  notify  the  stock- 
holders that  the  dividend  will  be  paid  by  the  trust  company 
on  demand,  the  stockholders  may,  in  the  event  of  the  refusal 
of  the  trust  company  to  pay  the  dividends  on  demand,  main- 
tain an  action  against  the  trustees  to  recover  the  amount  of 

61  Bacon  v.  Robertson,  18  How.  (50  U.  S.)  480,  15  L.  ed.  499.  See  Mason 
V.  Penabic  Min.  Co.,  66  Fed.  .396.    See  also  §  238,  herein. 

62  Section  57. 

446 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.       §  271 

the  dividend  as  for  money  had  and  received,  although  such 
money  is  still  in  the  hands  of  the  trust  company.  The  action 
not  being  brought  to  recover  the  specific  amount  of  money 
appropriated  for  dividends,  but  rather  on  the  theory  that  the 
trustees  have  had  and  received  for  the  use  and  benefit  of  the 
stockholders  the  amount  of  the  dividends  to  which  they,  the 
latter,  were  entitled,  it  is  no  defense  to  the  trustees  that  after 
having  received  the  moneys  they  wrongfully  parted  with  the 
possession  thereof.  Where,  in  such  an  action,  the  trustees 
interposed  a  counterclaim  alleging  that  they  appropriated  the 
money  delivered  to  the  trust  company  for  the  payment  of  the 
dividends  to  the  satisfaction  of  an  alleged  indebtedness  of  the 
plaintiff's  assignors  to  the  corporation,  the  interposition  of 
such  counterclaim  is  evidence  that  the  trustees  controlled  the 
action  of  the  trust  company.''^ 

§271.  Suit  by  Stockholder  to  Compel  Successor  in  In- 
terest of  Lessee  to  Pay  Rent  Reserved. 

Where  the  possession  of  property  has  been  transferred  under 
a  contract  legal  in  itself,  but  induced  by  fraud,  while  the  fraud 

63Janeway  v.  Burn,  86  N.  Y.  Supp.  628,  91  App.  Div.  165,  affirmed 
(mem.)  180  N.  Y.  560,  73  N.  E.  1125.  It  appeared  that,  certain  of  the 
stockholders  claiming  the  dividend  had  contracted  with  the  trustees  for  the 
purchase  of  certain  real  and  personal  property  owned  by  the  corporation. 
Possession  thereof  was  to  be  given  to  the  purchasers  on  or  before  August  31, 
1900.  The  contract  provided  that  "  the  company  and  trustees  shall,  when- 
ever thereunto  advised  by  their  counsel,  execute  and  deliver  to  the  pur- 
chaser" a  deed  of  the  premises  containing  covenants  against  the  grantor's 
acts  and  execute  and  deliver  a  bill  of  sale  of  the  personal  property.  The  bill 
of  sale  was  executed  March  15,  1901,  and  the  deed  on  April  4,  1901.  Prior 
to  the  delivery  of  possession  or  of  the  bill  of  sale  of  the  personal  property 
to  the  purchasers,  the  trustees  paid  taxes  which  were  assessed  against  the 
personal  property  April  15,  1900.  After  delivery  of  possession  of  the  realty 
to  the  purchasers  and  prior  to  the  execution  and  delivery  of  the  deed,  taxes 
which  had  become  a  lien  on  the  realty  September  1,  1900,  were  paid  by  the 
trustees.  It  was  not  pretended  that  the  taxes  were  paid  at  the  request  or  by 
the  direction  of  the  purchasers,  nor  did  it  appear  that  the  corporation  was 
personally  liable  for  such  taxes.  It  was  held,  that  the  trustees  could  not 
counterclaim  against  the  dividend  the  amounts  paid  for  taxes  on  the  real 
or  personal  property;  and  that  the  payments  made  for  taxes  were  mere 
voluntary  payments  imposing  no  liabihty  on  the  purchasers  as  for  money 
had  and  received. 

447 


§  271       PARTIES    CONTINUED — RIGHTS    AND    LIABILITIES 

furnishes  ground  for  rescinding  the  contract  and  avoiding  the 
obligations  imposed  thereby,  it  may  not  be  availed  of  as  a 
means  of  continuing  possession  of  the  property  without  meet- 
ing those  obligations.  Express  ratification  need  not  be  shown, 
but  where  the  party,  after  knowledge  of  the  fraud  and  an 
opportunity  to  rescind,  still  retains  the  possession  and  use  of 
the  property,  without  any  offer  to  return  the  same,  the  fraud 
is  waived  and  the  contract  becomes  valid  by  acquiescence. 
While  the  rule  which  forbids  persons  who  fill  fiduciary  positions 
from  using  them  for  their  own  benefit,  is  strict  in  its  require- 
ments and  extends  to  all  transactions  where  the  individuals' 
personal  interest  may  be  brought  into  conflict  with  his  acts 
in  a  fiduciary  capacity,  and  works  independently  of  the  ques- 
tion whether  there  was  fraud  or  good  intention,  it  does  not 
operate  to  avoid  ab  initio  all  transactions  of  a  trustee  where 
he  is  interested,  but  it  is  generally  limited  in  its  operation  to 
rendering  them  voidable  at  the  election  of  the  party  whose 
interests  are  concerned ;  and  so,  if  nothing  is  done  in  avoidance 
the  transaction  remains  undisturbed.*'^  In  this  case  the  S.  B. 
&  E.  J.  R.  R.  Co.,  defendant,  was  incorporated  to  construct  a 
railroad  to  connect  the  road  of  the  E.  R.  Co.  with  other  rail- 
roads; some  of  the  incorporators  were  directors  of  the  latter 
company.  In  June,  1870,  a  contract  was  made  by  the  new 
company  ostensibly  with  one  S.,  who  agreed  to  construct  the 
road,  the  company  to  issue  in  payment  therefor  one  million 
dollars  of  its  bonds  and  five  hundred  thousand  dollars  of  its 
capital,  which  was  to  constitute  all  of  its  stock  and  bond  debt. 
S.  in  reality  acted  for  a  syndicate  composed  wholly  of  members 
of  the  board  of  directors  of  said  company,  part  of  whom  were 
also  directors  of  the  E.  R.  Co.;  S.,  a  few  days  thereafter,  as- 
signed the  contract  to  the  syndicate.  In  July,  1870,  the  new 
company  leased  all  of  its  property  and  franchises  to  the  E.  R. 
Co.,  the  lessee  agreeing  to  pay  as  rent  a  certain  proportion  of 
the  gross  earnings,  guaranteeing  that  this  should  never  be 

M  Barr  v.  New  York,  Lake  Erie  &  Western  R.  R.  Co.,  125  N.  Y.  263,  31 
N.  Y.  St.  Rep.  743,  43  Abb.  L.  J.  151,  26  N.  E.  145,  9  Ry.  &  Corp.  L.  J.  174, 
reversing  5  N.  Y.  Supp.  623,  52  Hun,  555,  24  N.  Y.  St.  Rep.  188. 

448 


KEMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.       §  271 

less  than  one  hundred  and  five  thousand  dollars.  The  executive 
committee  of  the  E.  R.  Co.  passed  a  resolution,  which,  after 
reciting  the  lease  and  the  guaranty  of  a  rental  equal  to  seven 
per  cent  interest  on  the  bonds,  and  seven  per  cent  dividends 
on  the  stock  of  the  lessor,  authorized  the  execution  of  a  guar- 
anty of  the  payment  of  semiannual  dividends  of  three  and 
one-half  per  cent  on  the  stock.  The  stock  and  bonds  were 
issued  to  members  of  the  syndicate;  they  expended  about 
eight  hundred  and  fifty  thousand  dollars  in  the  construction 
of  the  road.  In  December,  1870,  the  road,  being  about  com- 
pleted, was  taken  possession  of  by  the  lessee.  In  February, 
1871,  the  directors  of  the  lessor  formally  ratified  the  lease.  In 
1875,  the  lessee  became  insolvent;  a  receiver  was  appointed 
who,  by  authority  of  the  court,  continued  to  operate  the  leased 
road.  The  lessee  and  its  receiver  bought  in  all  of  the  stock  of 
the  lessor,  except  certain  shares  owned  by  plaintiffs,  and 
thereby  obtained  complete  control,  and  thereafter  elected 
directors  in  the  interest  of  the  lessee.  The  property  and  assets 
of  the  lessee,  including  the  lease,  were  sold  under  a  mortgage 
foreclosure  judgment.  In  1878,  the  New  York,  Lake  Erie  & 
Western  Railroad  Company  became  the  owner,  it  covenanting 
to  pay  all  of  the  receiver's  liabilities,  and  it  had  still  continued 
to  operate  the  leased  road,  which  was  of  great  value  to  it  as  con- 
necting its  own  and  other  roads,  but  it  had  paid  nothing  except 
interest  on  the  bonds,  refusing  to  pay  that  portio:.  oi"  the  rental 
represented  by  the  guaranty  of  dividends  on  the  stock.  In  an 
action  to  compel  the  N.  Y.,  L.  E.  &  W.  R.  R.  Co.,  as  successor 
in  interest  of  the  lessee,  to  pay  the  balance  of  the  rent  reserved, 
the  trial  court  found  that  the  syndicate,  fraudulently  and  for 
their  own  benefit  and  gain,  caused  the  building  contract,  the 
lease  and  the  guaranties  to  be  made,  and  directed  a  dismissal 
of  the  complaint.  It  was  held  an  error;  that  the  fraudulent 
nature  of  the  transaction  did  not  render  the  lease  absolutely 
void,  but  simply  voidable;  and  that  the  lessee  and  its  successor 
in  interest  could  not  retain  the  possession  and  enjoy  the  use  of 
the  leased  property,  after  knowledge  of  the  fraud  and  with 
opportunity  to  act  in  repudiation,  without  becoming  liable  to 
29  449 


§  272      PARTIES   CONTINUED — RIGHTS   AND   LIABILITIES — 

pay  the  rent  reserved;  that  the  vice  in  the  original  transaction 
did  not  necessarily  so  affect  the  lease  as  to  prevent  ratification, 
or  its  survival  after  acts  on  the  part  of  the  lessee  and  its  suc- 
cessors in  interest,  with  knowledge  of  the  fraud,  amounting 
in  effect  to  acquiescence  and  waiver.  It  was  also  held,  that 
plaintiffs,  as  stockholders,  could  maintain  the  action,  as  their 
corporation  was  wholly  under  the  control  of  its  lessee.  Again 
it  was  held,  that  defendant,  the  N.  Y.,  L.  E.  &  W.  R.  R.  Co., 
was  not  in  a  position  to  question  the  legality  or  validity  of  the 
issue  of  the  shares  of  stock  held  by  plaintiffs,  as  the  members 
of  the  syndicate  that  built  the  road  of  the  S.  B.  &  E.  J.  R.  R. 
Co.  were  practically  the  company,  they  holding  all  of  its  stock, 
and  so,  the  manner  in  which  they  chose  to  build  the  road  and 
to  divide  up  their  interests,  concerned  only  themselves,  and 
however  illegal  the  transaction,  no  one,  so  far  as  appeared, 
could  complain.  It  seems  that  no  principle  of  law  forbade  the 
said  company  from  agreeing  to  pay  for  the  construction  of  its 
road  in  the  way  or  in  the  amount  it  did.^^ 

§  272.  Right  of  Subsequent  Stockholders  to  Sue. 

The  weight  of  authority  seems  to  be  that  a  person  who  was 
not  a  stockholder  at  the  time  of  the  transactions  complained 
of  cannot  complain  or  bring  a  suit  to  have  them  declared 
illegal.^®  A  distinction  exists  between  the  right  of  a  stock- 
holder to  complain  of  an  ultra  vires  act  committed  before  he 
acquires  the  shares,  and  which  the  prior  owner  neither  partici- 
pated in  nor  assented  to,  and  the  attitude  of  one  who  acquires 
shares  with  knowledge  that  the  prior  owner  had  voted  them 
in  favor  of  the  act  subsequently  sought  to  be  annulled  by  the 
subsequent  holder.  In  the  first  case  the  present  holder  is  not 
debarred  or  estopped  from  maintaining  suit,  unless  prevented 
by  some  statute  or  rule  of  court.  In  the  latter  case,  however, 
it  would  seem  that  the  assignee  of  shares  stands  in  the  former 
owner's  place,  in  so  far  that  he  cannot  object  to  the  act  ap- 
es Id.;  Munson  v.  S.  G.  &  C.  R.  R.  Co.,  103  N.  Y.  58;  Wardell  v.  R.  R.  Co., 
103  U.  S.  651,  26  L.  ed.  509,  distinguished. 

68  Alexander  v.  Searcy,  81  Ga.  536,  12  Am.  St.  Rep.  337,  8  S.  E.  630. 

450 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.       §  273 

proved  of  by  such  prior  owner,  and  this  applies  to  enable  a 
bona  fide  purchaser  to  obtain  an  injunction  against  the  ratifica- 
tion of  an  illegal  transfer  of  corporate  pro[)erty,  which  was 
made  prior  to  the  purchase  of  the  stock,  was  ultra  vires,  and 
was  never  acquiesced  in  by  such  prior  owner.*^^  Subsequent 
stockholders,  therefore,  have  no  standing  as  a  general  rule  to 
attack  prior  mismanagement  of  the  corporation.  Such  a 
stockholder  ought  not  to  be  allowed  to  sue  unless  the  mis- 
management or  its  effects  continue  and  are  injurious  to  him, 
or  it  affects  him  specially  and  peculiarly  in  some  other  man- 
ner.*** So  stockholders  who  have  acquired  their  shares  and 
their  interest  in  the  corporation  from  the  alleged  wrongdoers 
and  through  prior  mismanagement,  have  no  standing  to  com- 
plain thereof.**^  Nor  have  stockholders  any  remedy  in  a  suit 
for  alleged  frauds  occurring  prior  to  becoming  stockholders  by 
purchase,  as  where  illegal  salaries  are  paid  directors  prior  to 
acquiring  such  stock,  but  otherwise  where  the  grievance  com- 
plained of  thereafter  occurred  without  his  knowledge.'" 

§  273.  When  Corporation  and  Not  Stockholders  Should 
Sue  Under  Sherman  Anti-Trust  Act. 

In  a  case  in  the  Federal  Circuit  Court,  decided  in  1909,  the 
declaration  was  framed  in  reliance  upon  the  Sherman  Anti- 
Trust  Act  '^  and  claimed  threefold  damages  under  said  act. 
It  was  averred  in  substance  that  the  plaintiff  was  a  stockholder 
in  a  named  company,  organized  to  operate  an  independent 
telephone  system  throughout  the  United  States  and  that  the 
defendant  secured  control  thereof  by  the  purchase  of  shares 
of  its  stock  for  the  purpose  of  preventing  the  free  operation  of 
competition  in  the  interstate  telephone  traffic  and  commerce 

"7  Forrester  v.  Boston  &  Montana  Consol.  Copper  &  S.  Min.  Co.,  21  Mont. 
565,  55  Pac.  353. 

68  Home  Fire  Ins.  Co.  v.  Barber,  67  Neb.  644,  93  N.  W.  1024,  108  Am. 
St.  Rep.  716,  considering  fully  many  authorities  pro  and  con. 

69  Home  Fire  Ins.  Co.  v.  Barber,  67  Neb.  644,  108  Am.  St.  Rep.  716,  93 
N.  W.  1024,  60  L.  R.  A.  927. 

70  Rankin  v.  Brewery  &  Ice  Co..  12  N.  Mex.  54,  73  Pac.  614. 

71  Act  July  2,  1890,  chap.  647,  §  1,  26  Stat.  209,  U.  S.  Comp.  Stat.  1901, 
p.  3200. 

451 


§273       PARTIES    CONTINUED — RKiHTS    AND    LIABILITIES — 

which  it  had  planned  to  carry  on,  and  in  the  attempt  to 
monopolize  such  commerce;  that  said  controlled  corporation 
had  since  been  managed  by  the  defendant,  not  for  the  purpose 
of  developing  its  business,  but  for  the  purpose  of  preventing 
it  from  doing  business  and  to  suppress  and  smother  competi- 
tion, causing  the  said  controlled  company  to  be  placed  in  a 
receiver's  hands;  and  that  by  the  exercise  of  said  control  the 
defendant  had  since  monopolized  such  interstate  telephone 
commerce,  and  that  plaintiff's  shares  of  stock  in  his  company 
were  being  rendered  worthless.  Upon  demurrer  the  question 
was  whether  the  declaration  set  forth  any  injury  whereby  the 
plaintiff  had  sustained  any  special  damage  pecuHar  to  himself 
and  distinguishable  in  kind  from  that  common  to  the  other 
shareholders  as  the  result  of  an  injury  to  the  corporation  in  its 
business  or  property  under  §  7  of  the  Sherman  Act.  It  was 
held,  however,  that  the  injury  set  forth  was  to  the  corporation, 
and  that  it  alone  could  maintain  an  action  at  law  under  the 
enactment.  The  court  said  in  this  connection  that:  "The 
Sherman  Act  does  not  by  its  terms  affect  the  question  whether 
an  injury  is  in  legal  contemplation  an  injury  to  the  corporation 
or  an  injury  to  the  stockliolder.  This  question  must  be  deter- 
mined upon  ordinary  principles  of  law.  There  can  be  little 
doubt  that  the  ordinary  principle  of  representation  of  the 
stockholders  by  the  corporation  is  as  applicable  to  a  violation 
of  the  Sherman  Act  as  to  any  other  violation  of  law.  There  is 
no  indication  of  an  intention  of  Congress  to  subject  a  defend- 
ant to  independent  suits  by  a  multitude  of  stockholders  for  an 
act  for  which  the  statute  affords  redress  to  the  corporation 
itself."  ^^  It  was  further  held  that  the  possibihty  that  at  the 
trial,  proof  might  be  introduced  of  an  injury  other  than  that 
averred  in  the  declaration,  was  not  a  good  reason  for  overruling 
the  demurrer  and  could  not  be  considered  upon  demurrer;  that 
under  the  general  averment  that  ''the  plaintiff  has  been 
greatly  injured  in  his  business  and  property"  a  special  injury 
constituting  a  different  cause  of  action  could  not  be  shown. 
As  the  plaintiff's  company,  however,  was  in  a  receiver's  hands 

72  Per  Brown,  Dist.  J. 

452 


REMEDIES — PROMOTERS — OFFICHRS — DIRECTORS       §§274,  275 

the  court  declared  that  'Hhere  should  be  httle  practical  diffi- 
culty in  working  out  the  stockholder's  right  through  directions 
to  the  receiver  as  to  suits  upon  causes  of  action  belonging  to 
the  corporation."  '^^ 

§  274.  When  Corporation  Should  Sue  or  Be  Made  Party 
to  Suit  by  Stockholder. 

The  general  rule  is  that  when  directors  or  officers  of  a  corpora- 
tion are  charged  with  the  mismanagement  of  the  corporate 
property,  the  action  to  redress  should  be  instituted  by  the 
corporation.'^  And  although  a  stockholder  may  bring  a  suit 
when  the  corporation  refuses,  yet,  as  in  such  a  case  the  suit 
can  be  maintained  only  on  the  ground  that  the  rights  of  the 
corporation  are  involved,  the  corporation  should  be  made  a 
party  to  the  suit.''^  Again,  even  though  the  corporation  itself 
should  sue  for  damages  in  a  case  where  the  minority  stock- 
holder's interest  has  been  injured  by  the  wrongful  foreclosure 
of  a  mortgage,  yet  if  said  corporation  refuses  to  bring  an  action 
it  is  a  necessary  party  to  a  suit  for  relief  brought  by  a  stock- 
holder in  behalf  of  all  others  injured  in  like  manner;  but  a 
minority  stockholder  cannot  sue  where  the  injury  is  common 
to  all  the  stockholders.'^^ 

§  275.  When  Stockholder  May  Be  Made  Party  Defendant 
by  Court — Refusal  to  Permit  Stockholders  to  Defend. 

Stockholders  of  a  corporation  who  have  been  allowed  to  put 
in  answers  in  the  name  of  a  corporation,  cannot  be  regarded 
as  answering  for  the  corporation  itself.  In  a  special  case, 
however,  where  there  is  an  allegation  that  the  directors  fraudu- 
lently refused  to  attend  to  the  interests  of  the  corporation,  a 
court  of  equity  will,  in  its  discretion,  allow  a  stockholder  to 
become  a  party  defendant,  for  the  purpose  of  protecting,  from 
unfounded  and  illegal  claims  against  the  company,  his  own 

73  Ames  V.  American  Telephone  &  Teleg.  Co.  (U.  S.  C.  C),  166  Fed.  820. 

74  Sigwald  V.  City  Bank,  82  S.  C.  382,  385,  64  S.  E.  398. 

75  Davenport  v.  Dows,  18  Wall.  (85  U.  S.)  626,  21  L.  ed.  938. 

76  Niles  V.  New  York  Central  &  H.  R.  Rd.  Co.,  71  N.  Y.  Supp.  271,  35 
Misc.  69. 

453 


§  276      PARTIES    CONTINUED — RIGHTS   AND    LIABILITIES — 

interest  and  the  interest  of  such  other  stockholders  as  clioose 
to  join  him  in  the  defense.'^ 

When  stockholders  intervene  in  a  suit  filed  against  the 
corporation  and  allege  that  through  fraud  and  collusive  con- 
duct the  officers  and  directors  refuse  to  defend  such  suit,  it 
is  not  error  to  refuse  to  permit  such  stockholders  to  appear 
and  defend  in  the  name  of  the  corporation,  when  they  de- 
cline to  proceed  in  their  own  names  as  stockholders,  in  be- 
half of  themselves  and  other  stockholders  who  may  see 
proper  to  join  with  them  in  defense  of  such  suit/* 

§276.  Stockholders  as  Necessary  Parties  in  Suit  by 
Policy  Holder  Against  Insurance  Company  for  Accounting 
and  Receivership — Equity  Jurisdiction. 

In  a  late  case  in  the  Supreme  Court  of  the  United  States 
the  following  points  were  decided:  (1)  The  wrongdoing  of 
former  officers  of  an  insurance  company,  and  their  continu- 
ance in  power,  in  the  absence  of  any  trust  relation,  gives  no 
jurisdiction  for  an  accounting  in  equity  in  a  suit  in  which  the 
company  is  the  only  defendant  as  between  a  simple  debtor 
and  creditor.  (2)  The  Equitable  Life  Assurance  Society  is 
not  a  trustee  of  its  policy  holders  under  its  charter  and  poli- 
cies as  the  same  have  been  construed  by  the  highest  courts 
of  the  State  of  New  York.  (3)  As  the  charter  and  contract 
have  been  construed  by  the  highest  court  of  New  York,  a 
policy  holder  in  the  Equitable  Life  Assurance  Society  can 
only  participate  in  the  surplus  of  the  society  according  to 
the  terms  of  the  policy;  and  a  discretion  rests  with  the  offi- 
cers of  the  society  as  to  what  amount  of  surplus  shall  be  re- 
tained and  distributed,  and  when  the  distribution  shall  be 
made,  (4)  While  wrongdoing,  waste  and  misapplication  of 
funds  reducing  the  surplus  of  an  insurance  company  before 
distribution,  might  give  ground  of  action  to  a  policy  holder, 

"  Bronson  v.  La  Crosse  &  M.  Rd.  Co.,  2  Wall.  (69  U.  S.)  283,  17  L.  ed.  725. 

When  person  should  not  he  admitted  to  defend  although  claimed  by  plaintiff 
to  be  a  stockholder  but  he  does  not  admit  that  he  is  one.  See  Meyer  v. 
Bristol  Hotel  Co.,  1G3  Mo.  59,  63  S.  W.  96. 

'«  Cornell  v.  Sims,  111  Ga.  828,  36  S.  E.  627. 
454 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.    §  277 

it  would  not  necessarily,  where  there  is  no  allegation  of  in- 
solvency, give  ground  for  equitable  action.  (5)  Where  the 
bill  avers  solvency  of  defendant  at  present,  a  prediction  of  in- 
solvency in  the  future  on  account  of  inability  to  meet  claims 
of  poHcy  holders  by  reason  of  mismanagement  is  a  mere  con- 
clusion of  law  and  not  a  fact  which  is  admitted  by  demurrer 
or  on  which  a  court  can  grant  equitable  relief.  (6)  Where  a 
suit  for  accounting  by  a  pohcy  holder  against  an  insurance 
company  as  sole  defendant  avers  that  the  stockholders  claim 
to  own  the  surplus,  no  decree  can  be  made  as  to  such  owner- 
ship without  the  presence  of  the  stockholders  as  parties.  (7) 
Equity  does  not  now  take  jurisdiction  in  cases  of  fraud  where 
the  relief  properly  obtainable  on  that  ground  can  be  obtained 
in  a  court  of  law,  and  where,  so  far  as  necessary,  discovery 
may  be  obtained  as  well  as  in  equity.'*'  (8)  A  complainant 
who  can  obtain  all  the  relief  to  which  he  is  entitled  in  a  sin- 
gle suit  cannot  invoke  the  interference  of  a  court  of  equity  on 
the  ground  that  defendant  may  be  saved  a  multiplicity  of 
suits  against  it  by  others  situated  similarly  to  himself.'^'^ 

§277.  Transfers  of  Stock— Pledge  for  Collateral  Se- 
curity— Liability  of  Pledgee  as  Stockholder — National  Banks 
— Bailment. 

One  to  whom  corporate  stock  has  been  transferred  as  col- 
lateral security,  but  who  appears  upon  the  books  of  the  cor- 
poration as  the  general  owner  thereof,  is  liable  as  a  stockholder 
for  the  debts  of  the  corporation.  Where,  however,  shares  of 
stock  are  transferred  to  a  party  as  collateral  security,  and  they 
are  so  registered  in  the  stock  record  of  the  corporation,  whereby 
his  true  relation  to  the  stock  appears,  he  is  not  hable  as  a 
stockholder  for  the  debts  of  the  corporation.*^  So  a  party 
who,  by  way  of  pledge  or  collateral  security  for  a  loan  of 

7«  See  Rev.  Stat.,  §  724;  United  States  v.  Bitter  Root  Co.,  200  U.  S.  451, 
50  L.  ed.  550,  26  Sup.  Ct.  318. 

«"  Equitable  Life  Assurance  Soc.  v.  Brown,  213  U.  S.  25,  53  L.  ed. , 

29  Sup.  Ct. ,  reversing  151  Fed.  1. 

«i  Marshall,  Field  &  Co.  v.  Evans,  Johnson,  Sloane  &  Co.,  106  Minn.  85, 
118  N.  W.  55. 

455 


§  277      PARTIES   CONTINUED — RIGHTS   AND   LIABILITIES — 

money,  accepts  stock  of  a  national  bank  which  he  causes 
to  be  transferred  to  himself  on  its  books,  incurs  immediate 
liability  as  a  stockholder,  and  he  cannot  relieve  himself  there- 
from by  making  a  colorable  transfer  of  the  stock,  with  the 
understanding  that  at  his  request  it  shall  be  transferred.  A 
national  bank  which  had  so  accepted,  and  caused  to  be  trans- 
ferred to  it,  shares  of  stock  of  another  national  bank,  was, 
on  the  latter  becoming  insolvent,  sued  as  a  stockholder.  It 
was  held,  that  a  loan  of  money  by  a  national  bank  on  such 
security  is  not  prohibited  by  law;  and  if  it  were,  the  defendant 
could  not  set  up  its  own  illegal  act  to  escape  the  responsibility 
resulting  tl;erefrom.  The  order  of  the  Comptroller  of  the 
Currency  prescribing  to  what  extent  the  individual  liability 
of  the  stockholders  of  an  insolvent  national  bank  shall  be 
enforced,  is  conclusive.^^  A  creditor  who  receives  from  his 
debtor  a  transfer  of  shares  in  a  national  bank  as  security  for 
his  debt,  and  who  surrenders  the  certificates  to  the  bank  and 
takes  out  new  ones  in  his  own  name  in  which  he  is  described 
as  pledgee,  and  holds  them  afterward  in  good  faith  as  such 
pledgee,  and  as  collateral  security  for  the  payment  of  his  debt, 
is  not  a  shareholder  subject  to  the  personal  liability  imposed 
upon  shareholders  by  act  of  Congress.  The  previous  cases 
relating  to  the  liability  of  such  shareholders  were  examined 
by  the  court  in  this  case  and  were  held  to  establish  that  the 
real  owner  of  the  shares  of  the  capital  stock  of  a  national  bank- 
ing association  may,  in  every  case,  be  treated  as  a  shareholder 
within  the  meaning  of  said  enactment. ^^  It  was  also  held 
(1)  That  if  the  owner  transfers  his  shares  to  another  person 
as  collateral  security  for  a  debt  due  to  the  latter  from  such 
owner,  and  if,  by  the  direction  or  with  the  knowledge  of  the 
pledgee,  the  shares  are  placed  on  the  books  of  the  association 
in  such  way  as  to  imply  that  the  pledgee  is  the  real  owner,  then 
the  pledgee  may  be  treated  as  a  shareholder  within  the  mean- 
ing of  the  Revised  Statutes  of  the  United  States,*^  and  there- 

82  National  Bank  v.  Case,  99  U.  S.  268,  25  L.  ed.  448. 

83  Rev.  Stat.,  §  5151. 

84  Rev.  Stat.,  §  5151. 

456 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,  ETC.       §  277 

fore  liable  upon  the  basis  prescribed  by  that  statute  ^  for  the 
contracts,  debts  and  engagements  of  the  association;  (2)  that 
if  the  real  owner  of  the  shares  transfers  them  to  another  per- 
son, or  causes  them  to  be  placed  on  the  books  of  the  associa- 
tion in  the  name  of  another  person,  with  the  intent  simply  to 
evade  the  responsibility  imposed  by  said  section  of  the  stat- 
ute ^  on  shareholders  of  national  banking  associations,  such 
owner  may  be  treated,  for  the  purposes  of  that  section,  as  a 
shareholder,  and  liable  as  therein  prescribed;  (3)  that  if  one 
receives  shares  of  the  stock  of  a  national  banking  association 
as  collateral  security  to  him  for  a  debt  due  from  the  owner, 
with  power  of  attorney  authorizing  him  to  transfer  the  same 
on  the  books  of  the  association,  and  being  unwilling  to  incur 
the  responsibilities  of  a  shareholder  as  prescribed  by  the 
statute,  causes  the  shares  to  be  transferred  on  such  books  to 
another,  under  an  agreement  that  they  are  to  be  held  as  se- 
curity for  the  debt  due  from  the  real  owner  to  his  creditor — 
the  latter  acting  in  good  faith  and  for  the  purpose  only  of 
securing  the  payment  of  that  debt  without  incurring  the 
responsibihty  of  a  shareholder — he,  the  creditor,  will  not, 
although  the  real  owner  may,  be  treated  as  a  shareholder  within 
the  meaning  of  said  statute ;  ^^  and  (4)  that  the  pledgee  of  per- 
sonal property  occupies  toward  the  pledgor  somewhat  of  a 
fiduciary  relation,  by  virtue  of  which,  he  being  a  trustee  to  sell, 
it  becomes  his  duty  to  exercise  his  right  of  sale  for  the  benefit 
of  the  pledgor.®^  Again,  one  who  holds  shares  of  national 
bank  stock,  the  bank  being  at  the  time  insolvent,  cannot  escape 
the  individual  liability  imposed  by  the  statute  by  transferring 
his  stock  to  avoid  that  liability,  knowing  or  having  reason  to 
believe  at  the  time  of  the  transfer  on  the  books  of  the  bank, 
that  it  is  insolvent  or  about  to  fail.  A  transfer  with  such  intent 
and  under  such  circumstances,  is  a  fraud  upon  the  creditors  of 


85  Rev.  Stat.,  §  5151. 

86  Rev.  Stat.,  §  5151. 

87  Rev.  Stat.,  §  5151. 

88  Pauly  V.  State  Loan  &  T.  Co.,  165  U.  S.  606,  41  L.  ed.  844,  17  Sup.  Ct. 
465. 

457 


§  277      PARTIES   CONTINUED — RIGHTS    AND    LIABILITIES — 

the  bank,  and  may  be  treated  by  the  receiver  as  inoperative 
between  the  transferrer  and  himself,  and  the  former  held  liable 
as  a  shareholder  without  reference  to  the  financial  condition 
of  the  transferee.  The  right  of  creditors  of  a  national  bank  to 
look  to  the  individual  liability  of  shareholders,  to  the  extent 
indicated  by  the  statute,  for  its  contracts,  debts  and  engage- 
ments, attaches  when  the  bank  becomes  insolvent;  and  the 
shareholder  cannot,  by  transferring  his  stock,  compel  creditors 
to  surrender  this  security  as  to  him,  and  force  the  receiver  and 
creditors  to  look  to  the  person  to  whom  his  stock  has  been 
transferred.  If  the  bank  be  solvent  at  the  time  of  the  transfer, 
that  is,  able  to  meet  its  existing  contracts,  debts  and  engage- 
ments, the  motive  with  which  the  transfer  is  made  is  im- 
material, as  a  transfer  under  such  circumstances  does  not 
impair  the  security  given  to  creditors;  but  if  the  bank  be 
insolvent,  the  receiver  may,  without  suing  the  transferee  and 
litigating  the  question  of  his  liability,  look  to  every  shareholder 
who,  knowing  or  having  reason  to  know,  at  the  time,  that  the 
bank  was  insolvent,  got  rid  of  his  stock  in  order  to  escape 
the  individual  liability  to  which  the  statute  subjected  him.^^ 
The  State  creating  a  corporation  may  determine  how  transfers 
of  stock  shall  be  made  and  evidenced,  and  a  change  in  the  law 
imposing  no  restraint  upon  the  transfer,  but  only  affecting  the 
method  of  procedure,  does  not  impair  the  obligation  of  the 
charter  contract  within  the  meaning  of  the  contract  clause  of 
the  Federal  Constitution,  therefore,  a  State  statute  ^°  is  not 
void  as  to  stockholders  who  purchased  stock  prior  thereto  and 
sold  it  thereafter,  because  it  required  a  statement  of  the  transfer 
of  stock  to  be  filed  in  the  office  of  the  Secretary  of  State  in 
order  to  relieve  the  transferrer  of  a  stockholder's  Hability,  the 

89  Stuart  V.  Hayden,  169  U.  S.  1,  42  L.  ed.  639,  18  Sup.  Ct.  274.  Whether 
the  bank,  being  in  fact  insolvent,  the  transferrer  is  liable  to  be  treated  as  a 
shareholder  in  respect  of  its  existing  contracts,  debts  and  engagements,  if 
he  believed  in  good  faith,  at  the  time  of  the  transfer  that  the  bank  was 
solvent,  was  not  decided;  although  he  may  be  so  treated,  even  when  acting 
in  good  faith,  if  the  transfer  is  to  one  who  is  financially  irresponsible.     Id. 

90  Corp.  Law  of  Kan.  of  1899  given  in  note  to  report  of  case  cited  in  next 
following  note. 

458 


REMEDIES — PROMOTERS — OFFICERS — DIRECTORS,   ETC.       §  277 

act  not  depriving  him  of  any  defense  tliat  might  be  made  at 
the  time  the  stock  was  acquired.  In  becoming  a  stockholder  of 
a  corporation  one  does  not  acquire  as  against  the  State  a  vested 
right  in  any  particular  mode  of  procedure  for  enforcement  of 
liability,  but  it  is  assumed  that  parties  make  their  contracts 
with  reference  to  the  existence  of  the  power  of  the  State  to 
regulate  such  procedure.  Methods  of  procedure  in  actions  on 
contract  that  do  not  affect  substantial  rights  of  parties  are 
within  the  control  of  the  State,  and  the  obligation  of  a  stock- 
holder's contract  is  not  impaired  within  the  meaning  of  the 
contract  clause  of  the  Federal  Constitution  by  substituting 
for  individual  actions  for  statutory  liability  a  suit  in  equity 
by  the  receiver  of  an  insolvent  corporation.^^ 

81  Henley  v.  Meyers,  215  U.  S.  373,  30  Sup.  Ct. ,  54  L.  ed. . 


459 


PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 


CHAPTER  XVII 

PARTIES    CONTINUED — CREDITORS — STOCKHOLDERS — RIGHTS, 
LIABILITIES   AND   REMEDIES   OF,    CONTINUED. 


§  278.  Suits  by  Creditors  —  Parties, 
Generally. 

279.  "Trust     Fund"     Doctrine- 

Capital  Stock  —  Unpaid 
Subscriptions. 

280.  When    Unpaid   Subscriptions 

or  Unpaid  Stock  Are  and 
Are  Not  Assets. 

281.  Stockholders'      Liabihty      to 

Creditors,    Generally. 

282.  Same  Subject. 

283.  Subscriptions  to  Aid  Organi- 

zation —  Fictitious  and 
Colorable  Subscriptions — 
Defense  of  Illegality  of 
Corporate  Scheme. 

284.  Whether    Stockholders'    Lia- 

bility Contractual,  Statu- 
tory or  Penal. 

285.  Right    of   Action    by   Stock- 

holder After  Receiver  Ap- 
pointed. 

286.  Liability       of       Nonresident 

Stockholder. 

287.  Liability    of    Stockholders- 

Pleading — What  Must  Be 
Shown,    Generally. 

288.  Liability   of   Stockholders   to 

Creditors  —  Unpaid  Sub- 
scriptions or  Stock. 

289.  Same  Subject. 

290.  Liability    of    Stockholders- 

Unpaid    Subscriptions    — 
Parties. 
29  L  Liability  of  Stockholders  to 
Creditors  Where  Stock  Re- 
ceived Without  Considera- 

460 


tion  or  for  Less  Than  Its 
Value — "  Bonus  Stock." 
§  292.  Same    Subject    Continued — 
Stockholders'  Rights. 

293.  Consideration    for    Issue    of 

Stock  —  Property,  etc.  — 
When  Payment  in  Stock  to 
Contractor  Is  Not  a  Stock 
Subscription. 

294.  Stock  Issued  for  Property — 

Valuation  Should  Be  Fair 
and  Just  —  Necessity  of 
Good  Faith  in  Transac- 
tion. 

295.  Stock  Issued  for  Property — 

Material  Overvaluation — 
Stockholders  Not  Neces- 
sarily Liable  to  Creditors 
Therefor— Good  Faith. 

296.  Stock  Issued  for  Property — 

Shareholder  May  Be  Li- 
able Where  Overvaluation 
Shows  Fraud  Upon  Credit- 
ors Though  None  Intended. 

297.  Stock  Issued  for  Property — 

Valueless  Property — Ma- 
terial Overvaluation. 

298.  Stock    Issued    for    Property 

Which  Subsequently  Be- 
comes Valueless  or  Con- 
sideration Fails. 

299.  Judgment    Creditors — Stock- 

holders' Liability  to,  for 
Unpaid  Stock — Parties. 

300.  Amount  of  Creditor's  Recov- 

ery on  Stock  May  Be 
Limited  by  His  Knowledge 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF 


§278 


of  Agreement  Under  Which 
Shares  Issued. 
§  301.  Creditor  or  Stockholder  May 
Sue  After  Demand  Upon 
and  Refusal  of  Corporate 
Authorities  to  Act — Stock- 
holder May  Defend. 

302.  When  Demand  Upon  Corpo- 

rate Authorities  and  Their 
Refusal  a  Condition  Prec- 
edent to  Suit. 

303.  When  Demand  Upon  and  Re- 

fusal of  Corporate  Author- 
ities Not  a  Condition  Prec- 
edent to  Suit. 

304.  Effect   of   Demand   and   Re- 

fusal Dependent  Upon  Cir- 
cumstances— Discretion  of 
Directors — Simulated  De- 
mand. 

305.  Demand  Upon  and  Refusal  of 

Corporate  Authorities — Ne- 
cessity of  Alleging  and 
Showing  Same. 

306.  Same  Subject. 

307.  Enforcing  Stockholders'  Lia- 

bility— Exhausting    Reme- 


dies Against  Corporation — 
When  Judgment  and  Exe- 
cution Unsatisfied  Are  Con- 
ditions Precedent. 
§  308.  Enforcing  Stockholders'  Lia- 
bility— Exhausting  Reme- 
dies Against  Corporation — 
When  Judgment  and  Exe- 
cution Unsatisfied  Are  Not 
Conditions  Precedent. 

309.  Stockholders'   Liability — Dis- 

solution as  Condition  Prec- 
edent to  Enforcing  Same. 

310.  Effect  of  Equity  Rule  94— 

When  Demand  Upon  Di- 
rectors for  Relief  Is  and  Is 
Not  Condition  Precedent — 
Stockholders  —  Right  to 
Protect  Corporation  When 
Directory  Derelict. 

311.  Judgment  Creditor's  Right  to 

Sue — Parties  —  Conditions 
Precedent. 

312.  Order    of    Court    Requiring 

Remedies  To  Be  Exhausted 
— Statute  Limitations. 


§  278.  Suits  by  Creditors — Parties,  Generally. 

A  single  creditor  of  a  corporation  can,  by  a  suit  at  law,  en- 
force his  own  claim  alone  against  any  single  shareholder  of  a 
corporation  upon  a  dissolution  of  the  company  to  the  amount 
of  the  par  value  of  the  shares  held  by  such  person  at  the  time 
of  the  dissolution,  without  resort  to  a  court  of  equity,  and  with- 
out suing  on  behalf  of  himself  and  all  other  creditors  of  the 
company,  and  without  joining  all  the  stockholders  of  the  com- 
pany as  parties  defendant.^  So  the  individual  liabihty  of  stock- 
holders may  be  enforced  in  the  Federal  Circuit  Court  in  an 
action  at  law  in  accordance  with  State  statutory  provisions  giv- 
ing new  rights  and  remedies.^    But  a  creditor  of  a  corporation 


1  Gibbs  V.  Davis,  27  Fla.  531,  8  So.  633. 

2  Borland  v.  Haven  (U.  S.  C.  C),  37  Fed.  394,  writ  of  error  dismissed 
(mem.),  159  U.  S.  255,  40  L.  ed.  140,  15  Sup.  Ct.  1039. 

461 


§  278      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

cannot  maintain  an  action  at  law  for  his  own  exclusive  benefit 
to  enforce  the  liabihty  imposed  by  the  Stock  Corporation  Law 
of  New  York,'  upon  stockholders,  but  his  remedy  is  to  bring 
suit  in  equity  on  behalf  of  himself  and  all  other  creditors,  to 
enforce  such  liability.  As  the  law  existed  prior  to  the  amend- 
ment of  1901  a  creditor  of  the  corporation  could  maintain  an 
action  to  enforce  the  statutory  liability  for  his  individual  bene- 
fit. This  right  is  preserved  to  a  creditor  of  a  corporation  whose 
claim  matured  four  months  prior  to  the  time  when  the  amend- 
ment of  1901  went  into  effect.  The  plaintiff  in  such  an  action 
need  not  allege  that  a  judgment  has  been  obtained  and  an  ex- 
ecution returned  unsatisfied  where  a  complaint  alleges  that  the 
corporation  has  been  dissolved,  and  that  the  judgment  of  dis- 
solution enjoined  all  creditors  from  instituting  any  action 
against  the  corporation  to  enforce  their  claims.'*  Where  a  bank 
charter  provided  that  on  the  failure  of  the  bank  "each  stock- 
holder shall  be  liable  and  held  bound  *  *  *  for  any  sum 
not  exceeding  twice  the  amount  of  *  *  *  his  *  *  * 
shares,"  it  was  held  (1)  that  a  suit  in  equity  by  or  for  all  the 
creditors  was  the  appropriate  mode  of  enforcing  the  habihty 
incurred  on  such  failure;  (2)  lliat  if  an  action  at  law  were  main- 
tainable by  one  creditor,  the  stockholders  must  be  separately 
sued  as  their  liability  was  several.^  No  repeal  of  the  charter 
of  a  corporation  can  impair  or  take  away  the  remedy  of  a 
creditor  against  it  for  a  previously  incurred  liability,  or  af- 
fect a  pending  suit  against  it  where  the  State  statute  so  pro- 
vides.® 
Under  the  Stock  Corporation  Law  of  New  York,  governing 

3  N.  Y.  Laws,  1890,  chap.  564,  §  54,  as  amended  by  Laws,  1892,  chap.  688, 
and  Laws,  1901,  chap.  354.  See  Laws,  1909,  chap.  61,  §  56,  Birdseye's 
Cummmg  &  Gilbert's  ConsoL  L.  of  N.  Y.  Ann.,  p.  5773. 

4  Lang  V.  Lutz,  82  N.  Y.  Supp.  319,  83  App.  Div.  534,  aff'd  in  180  N.  Y. 
254. 

5  Terry  v.  Little,  101  U.  S.  216,  25  L.  ed.  864,  citing  and  approving  Pollard 
V.  Bailey,  20  Wall.  (87  U.  S.)  520,  22  L.  ed.  376.  See  Brunswick  Terminal 
Co.  V.  National  Bank,  99  Fed.  639;  Wechselberg  v.  Flour  City  National 
Bank,  64  Fed.  94. 

8  Blake  v.  Portsmouth  &  Concord  Rd.,  39  N.  H.  435. 

462 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF  §  278 

the  liabilities  of  holders  of  capital  stock  not  fully  i)aid,  etc./ 
the  obligation  imposed  upon  sto(;kholders  is  personal  to  the 
creditors  and  can  only  be  enforced  in  an  action  by  them  or 
by  someone  directly  representing  thehi.     Such  liability  cannot 
be  enforced  by  an  assignee  for  the  benefit  of  creditors  of  a 
corporation.    The  liability  thus  imposed  is  a  contractual  lia- 
bility, not  between  the  corporation  and  its  stockholders,  but 
between  the  creditors  and  the  stockholders.    It  is  a  personal 
right  vested  in  the  creditor,  not  a  right  which  vested  in  the 
corporation,  and,  therefore,  not  a  right  that  either  the  corpo- 
ration or  its  assignee  can  enforce.^    If  a  creditor  obtains  a  de- 
cree in  another  State  directing  a  receiver  to  collect  claims  of 
such  a  character,  the  former's  right  to  individually  sue  stock- 
holders becomes  merged  in  the  decree.'^    Where  a  creditor's 
bill  is  brought  by  a  nonresident  in  a  Federal  Court  to  subject 
property  of  a  debtor,  according  to  priorities,  to  all  liens  resting 
upon  it,  the  court  is  not  bound  by  comity  or  other  considera- 
tion to  stay  the  suit  because  another  suit  is  already  pending 
in  a  State  Court  against  the  same  defendant  debtor  to  subject 
the  same  property,  but  in  which  it  is  only  sought  to  settle  the 
relative  priorities  of  the  liens  of  two  of  the  lien  creditors,  no 
others  of  the  lien  creditors  of  the  defendant  being  parties  in 
that  suit.    If  the  property  itself  were  actually  in  the  corporeal 
possession  of  the  State  Court,  in  the  person  of  a  receiver  or 
other  officer,  that  would  be  conclusive  and  the  Federal  Court 
would  not  and  could  not  interfere;  but  where  such  is  not  the 
fact,  the  only  duty  of  the  Federal  Court  is  to  inquire  whether 
the  controversy  exhibited  by  the  bill  was  within  the  cognizance 
of  the  State  Court  when  the  bill  before  the  Federal  Court  was 
brought,  for  if  it  was  then  that  fact  would  conclude  the  latter 
court.^° 

7  N.  Y.  Laws,  1890,  chap.  564,  §  54,  as  amended  by  Laws,  1892,  chap.  688, 
§  54,  and  by  Laws,  1901,  chap.  354,  Laws,  1909,  chap.  61,  §  56,  Birdseye's 
Ciimming  &  Gilbert's  Consol.  L.  of  N.  Y.  Ann.,  p.  5773. 

8  Thompson  v.  Knight,  77  N.  Y.  Supp.  599,  74  App.  Div.  316. 

9  Castleman  v.  Templcman,  87  Md.  546,  40  Atl.  275,  41  L.  R.  A.  367. 

10  Hay  V.  Alexandria  &  Washington  Rd.  Co.,  4  Hughes  (U.  S.  C.  C,  1882), 
331. 

463 


§  279      PARTIES  CONriNUED— CREDITORS— STOCKHOLDERS — 

§  279.  "  Trust  Fund  "  Doctrine --Capital  Stock— Unpaid 
Subscriptions. 

It  is  the  settled  doctrine  of  the  Federal  Supreme  Court  that 
unpaid  subscriptions  to  the  stock  of  a  corporation  constitute  a 
trust  fund  for  the  benefit  of  creditors,  which  may  not  be  given 
away  or  disposed  of  by  it  without  consideration  or  fraudulently 
to  the  prejudice  of  creditors.^ ^  So  it  is  held  that  even  before 
a  corporation's  insolvency  unpaid  subscriptions  create  a  fund 
in  equity  for  the  benefit  of  creditors  of  the  corporation.^^  And 
balances  unpaid  on  subscriptions  are  a  trust  fund  for  benefit 
of  creditors.^^  And  the  special  individual  hability  of  a  stock- 
holder in  a  banking  corporation  or  institution,  superadded  to 
his  ordinary  liability  by  the  Constitution  of  Nebraska,^^  is  for 
the  creation  of  a  trust  fund  for  the  benefit  of  all  creditors  of  the 
banking  corporation  or  institution  in  which  stock  is  held,  and 
an  action  to  render  available  such  liability  must  be  prosecuted 
by  one  creditor  or  such  corporation  or  institution  for  the  bene- 
fit of  all  other  creditors,  or  by  the  receiver  of  such  corporation 
or  institution  when  there  is  a  receiver.^^  But  an  active  cor- 
poration, finding  its  original  capital  impaired  by  loss  or  mis- 
fortune, may  for  the  purpose  of  recuperating  itself,  and  of 
producing  new  conditions  for  the  successful  prosecution  of  its 
business,  issue  new  stock,  and  put  it  upon  the  market,  and 
sell  it  for  the  best  price  that  can  be  obtained;  and  in  such  case 
no  trust  in  favor  of  a  creditor  arises  against  the  purchaser  who, 
in  good  faith  buys,  for  less  than  par.^^  Under  an  Alabama  de- 
cision the   ''trust  fund"   doctrine,   whereby  a  corporation's 

11  Fogg  V.  Blair,  139  U.  S.  118,  11  Sup.  Ct.  476,  35  L.  ed.  104.  Case  ex- 
plained in  Camden  v.  Stuart,  144  U.  S.  104,  36  L.  ed.  363,  12  Sup.  Ct.  585. 

12  Albright  v.  Texas,  S.  F.  &  N.  R.  Co.,  8  N.  M.  422,  46  Pac.  448,  rev'g  8 
N.  M.  110,  42  Pac.  73. 

13  Cooper  V.  .\del  Security  Co.,  122  N.  C.  463,  30  S.  E.  348. 

1*  Const,  of  Neb.,  §  7,  Art.  11,  "Corporations"  holds  that  "every  stock- 
holder in  a  banking  corporation  or  institution  shall  be  individually  responsi- 
ble and  liable  to  its  creditors  over  and  above  the  amount  of  stock  by  him 
held  to  an  amount  equal  to  his  respective  stock  or  shares  so  held,  for  all  its 
liabihties  accruing  while  he  remains  such  stockholder." 

15  Farmers'  Loan  &  Trust  Co.  v.  Funk,  49  Neb.  353,  68  N.  W.  520. 

16  Handley  v.  Stutz,  139  U.  S.  417,  11  Sup.  Ct.  530,  35  L.  ed.  227,  9  Ry.  & 

464 


RIGHTS,    LIABILITIES    AND    REMEDIES    OP  §  280 

capital  stock  and  debts  due  it  on  subscriptions  to  such  stock 
are  a  trust  fund  available  for  the  payment  of  its  debts,  does 
not  exist  so  as  to  render  available  in  equity,  in  satisfaction 
of  a  judgment  against  it,  debts  due  on  subscriptions.^^  Under 
a  Minnesota  decision  the  capital  of  a  corporation  is  its  own 
property,  which,  unless  prohibited  by  charter,  it  may  use  and 
dispose  of  the  same  as  a  natural  person.  It  is  not  held  in  trust 
for  creditors  except  in  the  sense  that  there  can  be  no  distribu- 
tion of  it  among  stockholders  without  provision  being  first 
made  for  the  payment  of  corporate  debts,  and,  as  in  the  case 
of  a  natural  person,  any  disposition  of  it  in  fraud  of  creditors  is 
void;  and  in  this  respect  there  is  no  distinction  between  unpaid 
capital  and  paid  capital,  between  "  stock  subscriptions"  and  any 
other  assets  of  the  corporation.^* 

§  280.  When  Unpaid  Subscriptions  or  Unpaid  Stock  Are 
and  Are  Not  Assets. 

Unpaid  subscriptions  become  assets,  upon  the  corporation 
becoming  insolvent,  which  are  available  for  the  payment  of 
creditors  who  have  extended  credit  to  the  corporation  in  re- 
liance upon  an  agreement  made  between  the  corporation  and 
its  stockholders  that  they  need  pay  in  only  a  certain  propor- 
tion of  the  amount  of  the  stock  subscribed;  such  creditors 
having  no  knowledge  of  any  other  or  different  agreement .^^ 
And  if  the  statute  requires  the  articles  of  a  corporation  to  be 
recorded  in  the  office  of  the  county  recorder  and  the  Secretary 
of  State,  such  record  gives  notice  of  the  liability  of  stock- 
holders to  the  extent  of  the  proportionate  amount  of  the  par 
value  of  the  stock  which  the  subscribers  are  required  to  pay  in, 

Corp.  L.  J.  362.    Case  explained  in  Camden  v.  Stuart,  144  U.  S.  104,  12  Sup. 
Ct.  585,  36  L.  ed.  363. 

17  Henderson  v.  Hall,  134  Ala.  455,  32  So.  840. 

18  Hospes  V.  Northwestern  Mfg.  &  Car  Co.,  48  Minn.  174,  50  N.  W.  1117, 
15  L.  R.  A.  470,  45  Alb.  L.  J.  277,  36  Am.  &  Eng.  Corp.  Cas.  206. 

"  Trust-fund"  doctrine  that  the  capital  of  a  corporation  is  a  trust  fund  for 
the  payment  of  its  debts  considered  and  criticised  in  Hospes  v.  Northwestern 
Mfg.  &  Car  Co.,  48  Minn.  174,  50  N.  W.  1117,  15  L.  R.  A.  470,  45  Alb.  L. 
J.  277,  36  Am.  &  Eng.  Corp.  Cas.  206. 

19  Bent  V.  Underdown,  156  Ind.  516,  60  N.  E.  307. 

30  465 


§  281       PARTIES   CONTINUED — CREDITORS — STOCKHOLDERS— 

SO  that,  upon  the  corporation  becoming  insolvent,  the  unpaid 
portion  of  such  stock  does  not  constitute  an  asset  for  the 
benefit  of  the  corporation  creditors.^" 

§281.  Stockholders'   Liability  to   Creditors,  Generally. 

Within  the  common-law  rule  there  was  no  individual  lia- 
bility of  stockholders  in  a  corporation  for  its  debts.-^  And  in 
the  absence  of  any  legislation  a  stockholder  is  not  liable  to 
creditors  of  the  corporation  after  he  has  fully  paid  up  liis  stock."^ 

But  where  a  State  statute  -^  makes  each  of  the  stockholders 
and  directors  of  an  incorporated  co-operative  association  indi- 
vidually liable  for  goods  sold  the  corporation,  ''to  the  amount 
of  his  capital  stock  therein,  and  no  more,"  it  imposes  a  lia- 
bility equal  to  and  over  and  above  the  full-paid  value  of  the 
stock  held. 24 

Holders  of  preferred  stock  are  subject  to  the  statutory  lia- 
bility, equally  with  the  common  stockholders,  in  an  action  by 
creditors  of  an  insolvent  corporation  to  enforce  the  statutory 
liability  of  stockholders .^^ 

If  a  State  statute  repeals  a  former  statute,  which  made  the 
stock  of  stockholders  in  a  chartered  company  liable  to  the 

20  Bent  V.  Underdown,  156  Ind.  516,  60  N.  E.  307. 

21  Gorder  v.  Connor,  56  Neb.  781,  77  N.  W.  383,  9  Am.  &  Eng.  Corp.  Cas. 
(N.  S.)  175. 

22Bicknell  v.  Altman  (Kan.,  1909),  105  Pac.  694.  In  this  case  several 
stockholders  of  a  Kansas  corporation,  which  was  organized  in  1905,  guaran- 
teed its  notes,  and,  on  its  default,  were  compelled  to  pay  them.  The  corpo- 
ration being  insolvent  its  affairs  were  wound  up  by  a  receiver.  Some  of  the 
stockholders,  including  the  guarantors  of  the  notes,  voluntarily  contributed 
an  amount  equal  to  their  stock  to  increase  the  fund  from  which  the  corporate 
debts  were  to  be  paid.  The  assets  of  the  corporation,  with  this  increase, 
being  insufficient  to  meet  its  obligations,  the  guarantors  brought  action 
against  the  stockholders  who  had  refused  to  make  any  such  contributions, 
seeking  to  recover  from  each  a  sum  equal  to  the  amount  of  his  stock  (which 
was  fully  paid  up)  so  far  as  might  be  necessary  for  their  own  reimbursement. 
The  trial  court  overruled  a  demurrer  to  a  petition  stating  these  facts,  and 
defendant  appealed.  It  was  held  that  the  petition  stated  no  cause  of  action 
and  the  judgment  was  reversed  with  directions  to  sustain  the  demurrer. 

23  1  How.  Mich.  Stat.,  §  3940. 

24  Kirkpatrick  v.  Bessalo,  116  Mich.  657,  5  Det.  L.  News,  97,  74  N.  W.  1042. 

25  Railroad  Company  v.  Smith,  48  Ohio  St.  219,  31  N.  E.  743. 

466 


RIGHTS,    LIABILITIES    AND    llEAIEDIES    OF  §  2S2 

corporation's  debts,  it  is,  as  respects  creditors  of  tlic  corpora- 
tion existing  at  the  time  of  the  repeal,  a  law  impairing  tlie 
obhgation  of  contracts,  and  void.  And  this  is  so,  even  though 
the  Habihty  of  the  stocl^  is  in  some  respects  conditional  only; 
and  though  the  stockholder  was  not  made,  by  the  statute  re- 
pealed, liable,  in  any  way,  in  his  person  or  property  generally, 
for  the  corporation's  debts.^^ 

§  282.  Same  Subject. 

In  Minnesota  a  stockholder's  liabihty  is  fixed  and  measured 
by  the  Constitution."  And  under  the  Kansas  Constitution  the 
liability  of  stockholders  for  the  debts  of  the  corporation  is 
limited  to  the  amount  of  their  stock.^s  But  in  a  State  having 
a  constitutional  provision  imposing  liability  on  stockholders, 
if  the  legislature  intended  those  of  a  new  corporation  created 
by  it  should  be  exempt,  it  would  express  the  intention  directly, 
and  not  commit  it  to  disputable  inference  from  provisions 

26  Hawthorne  v.  Calef,  2  Wall.  (69  U.  S.)  10,  17  L.  ed.  776. 

27  Bernheimer  v.  Converse,  206  U.  S.  516,  528,  529,  51  L.  ed.  163,  27  Sup. 
Ct.  755.  The  court,  per  Mr.  Justice  Day,  said:  "The  stockholders'  liability 
in  Minnesota,  as  in  some  other  States,  has  its  origin  in  a  constitutional  pro- 
vision, and  arises  under  section  8,  article  X  of  the  constitution  of  the  State. 
The  language  is: '  Liabilities  of  stockholders.  Each  stockholder  in  any  corpo- 
ration (excepting  those  organized  for  the  purpose  of  carrying  on  any  kind  of 
manufacturing  or  mechanical  business)  shall  be  liable  to  the  amount  of 
stock  held  or  owned  by  him.' 

"  The  courts  of  Minnesota  have  held  that  a  stockholder's  liability  is,  there- 
fore, fixed  and  measured  by  the  constitution.  Willis  v.  Mabon,  48  Minn. 
140;  McKusick  v.  Seymour,  Sabin  &  Co.,  48  Minn.  158.  It  is  apparent  from 
a  consideration  of  this  constitutional  provision  that  its  purpose  was  to  make 
a  stockholder  liable  to  the  creditors  of  the  corporation  in  an  amount  not 
exceeding  the  par  value  of  the  stock  held  by  him,  and  thus  secure  for  the 
benefit  of  such  creditors,  in  addition  to  the  assets  and  property  which  the 
corporation  might  possess,  the  liability  of  those  who  hold  its  stock  in  a  sum 
necessary  to  make  good  any  deficiency  between  the  amount  of  the  assets  and 
the  debts  within  the  limitation  stated.  It  is  evident  from  the  general  lan- 
guage used  in  this  constitutional  provision  that  while  a  remedy  might  have 
been  worked  out  in  the  courts  of  equity  in  the  State,  it  was  proper  if  not 
necessary  that  a  statute  should  be  passed  to  make  more  effectual  the  liability 
thus  secured  by  the  constitution." 

28  Bicknell  v.  Altman  (Kan.,  1909),  105  Pac.  694. 

As  to  Constitution  of  Nebraska  see  Wyman  v.  Bowman  (U.  S.  C.  C.  A.), 
127  Fed.  257. 

467 


§  283      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS— 

which  apply  by  name  to  the  corporation.''-^  The  sale,  though 
made  in  good  faith,  by  a  stockholder  in  a  corporation  of  his 
stock,  only  a  small  part  of  the  par  value  of  which  has  been 
paid,  does  not  terminate  his  liabihty  for  the  existing  debts  of 
the  company,  under  a  code  enactment  ^°  providing  that  the 
transfer  of  shares  is  not  valid  except  as  between  the  parties 
unless  it  is  regularly  entered  on  the  books  of  the  company,  but 
that  such  transfer  shall  not  in  any  way  exempt  the  person  mak- 
ing it  from  any  liability  of  the  corporation  created  prior  thereto, 
and  under  a  section  of  said  statute,^^  providing  that  nothing- 
contained  in  such  chapter  shall  exempt  the  stockholders  from 
individual  liability  to  the  amount  of  the  unpaid  installments 
on  the  stock  owned  by  them  or  transferred  by  them  for  the 
purpose  of  defrauding  creditors.^^  Stockholders  and  members 
may  be  held  liable  as  partners  for  the  acts  and  contracts  of  a 
body  of  persons  who,  by  reason  of  their  failure  to  comply  with 
statutory  conditions  precedent  to  organization,  have  never 
become  even  a  de  facto  corporation.^^  The  liability  of  stock- 
holders of  national  banks  is  conditional,  and  the  right  to  sue 
does  not  obtain  until  the  comptroller  has  acted;  his  order  is  the 
basis  of  the  suit.^^ 

§  283.  Subscriptions  to  Aid  Organization — Fictitious  and 
Colorable  Subscriptions — Defense  of  Illegality  of  Corporate 
Scheme. 

If,  in  order  to  aid  the  scheme  of  organization,  stock  is  sub- 
scribed for  in  the  wife's  name  by  her  husband  with  the  intent 
that  such  stock  should  be  delivered  to  her  by  the  promoters, 
but  she  does  not  claim  any  stock,  the  corporate  members  can- 
not hold  her  liable  for  the  fraud  of  such  promoters,  in  which 

29  Minneapolis  &  St.  Ry.  Co.  v.  Gardner,  177  U.  S.  332,  44  L.  ed.  793,  20 
Sup.  Ct.  656. 

30  Iowa  Code,  1873,  §  1078. 

31  Iowa  Code,  1873,  §  1082. 

32  White  V.  Green,  105  Iowa,  176,  74  N.  W.  928,  70  N.  W.  182,  8  Am.  & 
Eng.  Corp.  Cas.  (N.  S.)  414. 

33  Bergeron  v.  Hobbs,  96  Wis.  641,  71  N.  W.  1056. 

34  McClaine  v.  Rankin,  197  U.  S.  154,  49  L.  ed.  702,  25  Sup.  Ct.  410. 

468 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF  §  284 

she  did  not  participate,  in  concealing  the  fact  that  commissions 
were  to  be  paid  them  upon  the  amount  of  the  purchase  price 
of  property  which  constituted  the  corporation's  capital  stock.^ 
Fictitious  or  colorable  subscriptions  to  stock,  made  and 
used  with  intent  to  induce  others  to  subscribe,  with  the  secret 
understanding  that  no  liability  shall  attach  to  the  subscribers, 
or  that  they  shall  be  allowed  to  withdraw,  are  as  binding  on 
the  subscribers  as  if  originally  made  in  good  faith,  and  the 
existence  of  such  subscriptions  does  not  operate  as  a  release 
of  bona  fide  subscribers.^^  And  if  debts  have  been  contracted 
upon  the  strength  of  the  stock  subscriptions  the  stockholders 
cannot  avoid  their  liability  to  creditors  by  setting  up  the  ille- 
gality of  the  corporate  scheme  when  the  same  was  not  apparent 
upon  the  face  of  the  subscription  contract  or  set  forth  in  the 
prospectus  referred  to  in  the  same.^^ 

§  284.  Whether  Stockholders'  Liability  Contractual,  Stat- 
utory or  Penal. 

Under  a  decision  in  the  Federal  Supreme  Court,  the  hability 
imposed  upon  stockholders  in  corporations  by  a  State  con- 
stitutional provision,  that  "dues  from  corporations  shall  be 
secured  by  individual  liability  of  stockholders  to  an  additional 
amount  equal  to  the  stock  owned  by  each  stockholder,  and  such 
other  means  as  shall  be  provided  by  law;  but  such  individual 
liabilities  shall  not  apply  to  railroad  corporations,  nor  corpo- 
rations for  religious  or  charitable  purposes,"  and  by  statute 
in  the  same  State,  though  statutory  in  origin,  is  contractual 
in  its  nature;  and  an  action  on  this  liability,  not  being  one  to 
enforce  a  penal  State  statute,  but  only  to  secure  a  private 
remedy,  can  be  maintained  in  any  court  of  competent  juris- 
diction, whether  Federal  or  State.^*    It  is  said  in  a  California 

35  Cook  V.  Southern  Columbian  Climber  Co.,  75  Miss.  121,  21  So.  795. 
38  Wilson  V.  Hundley,  96  Va.  96,  4  Va.  L.  Reg.  317,  30  S.  E.  492. 

37  Cardwell  v.  Kelly,  95  Va.  570,  28  S.  E.  953,  40  L.  R.  A.  240.  See  Sprague 
V.  National  Bank  of  America,  172  111.  149,  50  N.  E.  19,  42  L.  R.  A.  606. 

38  Whitman  v.  Oxford  Nat.  Bank,  176  U.  S.  559,  20  Sup.  Ct.  477,  44  L.  ed. 
587,  cited  in  Bemheimer  v.  Converse,  206  U.  S.  516,  529,  51  L.  ed.  163,  27 
Sup.  Ct.  755;  Christopher  v.  Norvell,  201  U.  S.  216,  228,  50  L.  ed.  732,  26 

469 


§  284      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

decision  that:  "It  may,  therefore,  be  concluded  with  much 
certainty  that  under  the  Kansas  statute  the  habihty  is  in  con- 
tract, and  is  not  penal;  that  the  rights  of  the  judgment  cred- 
itor and  the  reciprocal  rights  and  duties  of  the  stockholder  are 

Sup.  Ct.  495;  McClaine  v.  Rankin,  197  U.  S.  154  (in  dissenting  opinion),  166, 
49  L.  ed.  702,  25  Sup.  Ct.  410  (this  case  holds  that  although  a  statutory 
liability  may  be  contractual,  or  quasi-contractual,  in  its  nature,  an  action 
given  by  statute  is  not  necessarily  to  be  regarded  as  brought  on  simple  con- 
tract, or  breach  of  simple  contract);  Piatt  v.  Wilmot,  19.3  U.  S.  602,  612,  24 
Sup.  Ct.  542,  48  L.  ed.  809  (holding  that  although  a  double  liability  of  a  stock- 
holder of  a  moneyed  corporation  may  be  contractual  in  its  nature,  if  it  is 
statutory  in  origin  it  is  a  liability  created  by  statute  within  the  meaning  of 
§  394  of  the  New  York  Code  of  Civil  Procedure);  Evans  v.  Nellis,  187  U.  S. 
271,  277,  47  L.  ed.  173,  23  Sup.  Ct.  74;  Ward  v.  Joslin,  186  U.  S.  142,  151, 
22  Sup.  Ct.  807,  46  L.  ed.  1093;  McDonald  v.  Thompson,  184  U.  S.  71,  74, 
46  L.  ed.  437,  22  Sup.  Ct.  297;  Hancock  Nat.  Bank  v.  Farnura,  176  U.  S. 
640,  641,  44  L.  ed.  619,  20  Sup.  Ct.  506;  Converse  v.  Hears  (U.  S.  C.  C),  162 
Fed.  767,  770,  774;  Harrison  v.  Remington  Paper  Co.,  140  Fed.  388,  390; 
Anglo-Amer.  Land,  M.  &  A.  Co.  v.  Lombard,  132  Fed.  729;  American  Nat. 
Bank  v.  Supplee,  115  Fed.  658;  Whitman  v.  Citizens'  Bank,  110  Fed.  506. 

See  also  the  following  cases: 

United  States:  Wyman  v.  Bowman,  127  Fed.  257. 

California:  Ferguson  v.  Sherman,  116  Cal.  169,  47  Pac.  1023,  37  L.  R.  A. 
622  (liability  is  in  contract  and  not  penal,  and  action  to  enforce  same  is 
transitory). 

Illinois:  Bell  v.  Farwell,  176  III.  489,  52  N.  E.  346,  42  L.  R.  A.  804. 

Maryland:  Hager  v.  Cleveland  &  Bassett,  36  Md.  476  (is  in  nature  of  con- 
tract between  company  creditor  and  stockholder) . 

Michigan:  Warren,  In  re,  52  Mich.  557,  561. 

Minnesota:  Hanson  v.  Davison,  73  Minn.  454,  44  N.  W.  198,  18  Am.  St. 
Rep.  510,  6  L.  R.  A.  676  (is  not  penal  or  statutory  but  purely  contractual). 

New  Hampshire:  Crippen  v.  Laighton,  69  N.  H.  540,  44  Atl.  538,  46  L.  R. 
A.  467,  citing  numerous  cases  {is  statutory  and  not  contractual,  and  cause  of 
action  is  local  and  not  transitory). 

New  York:  Stoddard  v.  Lum,  159  N.  Y.  265,  53  N.  E.  1108,  45  L.  R.  A. 
551  (common-law  contractual  liability  exists  to  pay  for  stock;  subscription 
to  stock  creates  a  debt);  Lowry  v.  Inman,  46  N.  Y.  119;  Howarth  v.  Angle, 
57  N.  Y.  Supp.  187,  39  App.  Div.  151,  aff'd  in  162  N.  Y.  179,  30  Civ.  Proe. 
R.  306,  56  N.  E.  489,  47  L.  R.  A.  725  (resident  stockholder  of  foreign  corpo- 
ration; liability  contractual). 

Pennsylvania:  Aultman's  Appeal,  98  Pa.  St.  505,  512,  513  (rests  on' con- 
tract express  or  implied  and  not  penal). 

West  Virginia:  Nimick  &  Co.  v.  Mingo  Iron  Works  Co.,  25  W.  Va.  184 
(liability  is  not  in  the  nature  of  a  penalty  or  forfeiture  but  it  arises  out  of  the 
implied  promise  of  the  stockholder  to  assume  and  discharge  the  individual 
liability  imposed  by  the  statute  under  which  the  corporation  was  created). 

470 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF  §  284 

measured  by  this  statute,  and  that,  under  the  law,  the  creditor 
who  has  obtained  judgment  in  Kansas  against  a  corporation, 
upon  which  judgment  an  execution  has  been  issued  and  re- 
turned nulla  bona,  may  pursue  the  stocldiolder  in  an  action 
at  law  wherever  jurisdiction  of  his  person  may  be  obtained,  and 
secure  judgment  against  him;  that  he  may  sue  one  or  many 
of  the  stockholders;  that  he  may  take  judgment  against  them 
without  first  having  obtained  judgment  against  the  corpora- 
tion in  the  State  in  which  his  action  against  the  stockholders 
is  commenced;  and  that  the  measure  of  the  individual  stock- 
holder's Hability  is  the  face  value  of  his  shares,  together  with 
the  amount  of  his  unpaid  subscription  thereon."  ^^  Under  a 
Florida  decision  the  statutory  liability  of  a  shareholder  for  the 
company's  debts  upon  its  dissolution  and  to  an  amount  equal 
to  the  par  value  of  the  stock  held  at  the  time  of  dissolution, 
is  assumed  by  the  stockholder  by  the  act  of  subscription  for 
stock,  and,  therefore,  arises  ex  contractu,  and,  upon  dissolution 
of  the  company,  a  creditor  thereof  can  enforce  such  liability 
by  suit  directly  against  the  shareholder  without  joining  the 
company  in  the  suit,  and  without  first  exhausting  his  remedy 
at  law  against  the  company.'*"  Under  a  Minnesota  decision  a 
stockholder's  liability  under  its  laws  is  contractual  and  en- 
forceable on  that  basis  and  not  on  the  ground  that  it  is  statu- 
tory or  penal  .''^ 
The  nature  of  the  habiUty  imposed  on  stockholders  of  a  cor- 

Stockholder's  liability  is  contractual,  incepted  when  debt  incurred.  Hill  v. 
Graham,  11  Colo.  App.  536,  54.3,  53  Pac.  1060. 

It  is  said  in  Bernheiiuer  v.  Converse,  206  U.  S.  516,  529,  51  L.  ed.  163,  27 
Sup.  Ct.  755,  per  Mr.  Justice  Day,  that:  "  It  may  be  regarded  as  settled  that 
upon  acquiring  stock  the  stockholder  incurred  an  obhgation  arising  from 
the  constitutional  provision,  contractual  in  its  nature  and,  as  such,  capable 
of  being  enforced  in  the  courts  not  only  of  that  State,  but  of  another  State 
and  of  the  United  States.  Whitman,  etc.,  v.  Oxford  Nat.  Bank,  176  U.  S. 
559,  44  L.  ed.  5S7,  20  Sup.  Ct.  477;  although  the  obligation  is  not  entirely 
contractual  and  springs  primarily  from  the  law  creating  the  obligation. 
Christopher  v.  Norvell,  201  U.  S.  216,  50  L.  ed.  732,  26  Sup.  Ct.  502." 

39  Ferguson  v.  Sherman,  116  Cal.  169,  176,  47  Pac.  1023,  37  L.  R.  A.  622, 
per  Henshaw,  J. 

40  Gibbs  v.  Davis,  27  Fla.  531,  8  So.  633. 

«  Hanson  v.  Davison,  73  Minn.  454,  76  N.  W.  254. 

471 


§  285      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

poration  by  the  Constitution  of  Minnesota,  declaring  that  each 
stockholder  shall  be  hable  to  the  amount  of  stock  held  or 
owned  by  him,  as  to  whether  such  hability  is  wholly  statutory 
or  partially  contractual,  and  therefore  transitory,  is  a  matter 
of  general  law  as  to  which  the  Federal  Courts  sitting  in  Wis- 
consin are  not  bound  to  follow  the  decisions  of  the  Wisconsin 
Supreme  Court  either  as  a  matter  of  comity,  or  under  the 
Revised  Statutes,'^  providing  that  the  laws  of  the  several 
States  are  to  be  regarded  as  rules  of  decision  in  trials  at  com- 
mon law  so  far  as  applicable.'*^ 

The  liability  imposed  by  the  Stock  Corporation  Law  of 
New  York"*^  on  account  of  unpaid  stock  is  held  to  be  wholly 
statutory,  and  in  the  nature  of  a  penalty.  The  right  to  en- 
force such  liability  is  vested  in  the  creditors  and  not  in  the 
corporation,  and  does  not  pass  to  a  trustee  in  bankruptcy.^ 

§  285.  Right  of  Action  by  Stockholder  After  Receiver 
Appointed. 

The  appointment  of  a  receiver  precludes  an  action  by  a 
stockholder  to  recover  corporate  property;  such  a  suit,  whether 
against  the  officers  of  the  corporation  or  other  persons  must 
be  instituted  by  the  receiver,  and  in  case  of  his  refusal  to  sue 
application  should  be  made  to  the  court  to  compel  him  to  do 
so.^  And  after  a  State  Court  has  appointed  a  receiver  of  all 
the  property  of  a  corporation,  and  while  the  receivership 
exists,  stockholders  of  the  corporation  cannot  bring  a  suit 
against  the  officers  in  a  court  of  the  United  States  for  fraudu- 
lent misappropriation  of  its  property,  without  making  the  re- 
ceiver as  well  as  the  corporation  a  party  to  the  suit;  although 

"2  §  721,  U.  S.  Comp.  Stat.,  1901,  p.  581. 

43  Syllabus  in  Converse  v.  Hears  (U.  S.  C.  C),  162  Fed.  767. 

44  N.  Y.  Laws,  1890,  chap.  564,  §  54,  as  amended  by  Laws,  1892,  chap.  688, 
and  Laws,  1901,  chap.  354,  Laws,  1909,  chap.  61,  §  56,  5  Birdseye's  Gum- 
ming &  Gilbert's  Consol.  L.  N.  Y.  Annot.,  p.  5773. 

45  Rathbone  v.  Ayer,  82  N.  Y.  Supp.  235,  84  App.  Div.  186. 

48  Neun  V.  Blackstone  BIdg.  &  L.  Assoc,  149  Mo.  74,  50  S.  W.  436. 

That  capacity  of  corporation  to  sue  is  suspended  for  time  being,  see  Davis  v. 
Ladoga  Creamery  Co.,  128  Ind.  222,  27  N.  E.  494;  Boston  &  Montana  Consol. 
Copper  &  Silver  Min.  Co.,  24  Mont.  142,  60  Pac.  990. 

472 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF  §  286 

the  State  Court  has  denied  a  petition  of  the  receiver  for  au- 
thority to  bring  the  suit,  as  well  as  an  application  of  the  stock- 
holders for  leave  to  make  him  a  party  to  it.'*' 

An  action  for  the  enforcement  of  the  individual  liability  of 
the  stockholders  of  a  banking  corporation  must  be  prosecuted 
by  one  creditor  for  the  benefit  of  all,  or  by  the  receiver  of  the 
corporation.  And  a  creditor  may  not  intervene  in  such  an 
action,  instituted  by  the  receiver,  at  least  where  it  is  not  made 
to  appear  that  the  receiver  is  not  prosecuting  the  case  in  good 
faith  for  the  best  interests  of  the  creditors,  or  in  some  way  has 
disregarded  or  violated  the  duties  of  his  trust  in  that  regard.^* 

§  286.  Liability  of  Nonresident  Stockholder. 

Where  an  action  is  brought  wherein  the  amount  due  from 
stockholders  and  for  which  they  are  individually  liable  is  de- 
termined, although  the  court  has  no  jurisdiction  over  a  non- 
resident stockholder,  an  ancillary  action  to  enforce  his  lia- 
bility may  be  maintained."*^  A  stockholder  in  one  State  may 
be  sued  therein  by  a  creditor  where  the  former  holds  stock 
in  an  insolvent  bank  in  another  State,  the  statute  of  which 
makes  a  stockholder  primarily  liable  to  each  corporation  cred- 
itor for  such  proportionate  part  of  the  debt  as  the  stock  owned 
by  a  stockholder  sustains  to  the  entire  amount  of  capital  stock 
subscribed;  such  a  statutory  provision  does  not  create  a  pen- 
alty.s" 

47  Porter  v.  Sabin,  149  U.  S.  472,  37  L.  ed.  815, 13  Sup.  Ct.  1008. 

48  Brown  v.  Brink,  57  Neb.  606,  78  N.  W.  280. 

49  Hanson  v.  Dayton,  73  Minn.  454,  76  N.  W.  254. 

50  Lanigan  v.  North,  69  Ark.  62,  63  S.  W.  62,  under  Civ.  Code  Cal.,  §  362; 
insolvent  bank  was  in  California  and  suit  was  brought  in  Arkansas  against  an 
Arkansas  stockholder  in  said  bank. 

Examine  in  this  connection  the  following  cases: 

United  States:  Kisseberth  v.  Prescott,  91  Fed.  611. 

California:  Ferguson  v.  Sherman,  116  Cal.  169,  47  Pac.  1023,  37  L.  R.  A. 
622. 

Illinois:  Bell  v.  Farwell,  176  111.  489,  52  N.  E.  346,  42  L.  R.  A.  804. 

lorm:  Latimer  v.  Citizens'  State  Bank,  102  Iowa,  162,  71  N.  W.  225,  7 
Am.  &  Eng.  Corp.  Cas.  (N.  S.)  25. 

Massachusetts:  Hancock  Nat.  Bank  v.  Ellis,  172  Mass.  39,  51  N.  E.  207, 
42  L.  R.  A.  396,  citing  a  number  o£  cases. 

47:^ 


§  2S7       PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

While  the  habihty  of  nonresident  stockholders  for  taxes  on 
his  stock  may  not  be  expressed  in  the  charter  of  the  company 
if  it  existed  in  the  general  laws  of  the  State  at  the  time  of  the 
creation  of  the  corporation  or  the  extension  of  its  charter,  and 
the  Constitution  of  the  State  also  contained  at  such  times  the 
reserved  right  to  alter,  amend  and  repeal,  those  provisions  of 
the  Constitution  and  general  laws  of  the  State  are  as  much  a 
part  of  the  charter  as  if  expressly  embodied  therein.^^ 

§  287.  Liability  of  Stockholders— Pleading— What  Must 
Be  Shown,  Generally. 

A  jjetition,  in  an  action  by  the  creditors  of  an  insolvent  cor- 
poration to  enforce  the  statutory  liability  of  its  stockholders, 
which  avers  that  each  of  its  defendants,  except  the  corpora- 
tion, is  the  holder  of  a  specified  number  of  shares  of  the  capital 
stock  of  the  corporation,  contains  a  sufficient  allegation  that 
the  defendants  are  stockholders.  It  need  not  be  averred,  in 
terms,  that  the  defendants  are  owners  of  the  stock  held  by 
them.^" 

A  complaint  in  an  action  brought  by  a  creditor  of  a  corpo- 
ration against  a  stockholder  whose  stock  is  not  fully  paid  in, 
is  demurrable  where  the  allegation  as  to  the  defendant's  in- 
debtedness upon  the  stock  relates  to  the  time  when  the  in- 
debtedness of  the  corporation  to  the  plaintiff  was  contracted, 
and  not  to  the  time  when  the  plaintiff  recovered  judgment 
against  the  corporation  upon  such  indebtedness.'^^  To  establish 
a  cause  of  action  under  the  provision  of  the  General  Manufactur- 

Michigan:  Western  National  Bank  of  N.  Y.  v.  Lawrence,  117  Midi.  669, 
76  N.  W.  105  (liability  is  contractual  and  not  penal). 

New  Hnmpshire:  Crippen  v.  Laighton,  69  N.  H.  540,  46  L.  R.  A.  467,  44 
Atl.  538. 

New  York:  Stoddard  v.  Lum,  159  N.  Y.  265,  53  N.  E.  1108,  45  L.  R.  A. 
551. 

Rhode  Island:  Hancock  Nat.  Bank  v.  Farnum,  20  R.  I.  466,  40  Atl.  34 
(liability  is  statutory  and  not  contractual). 

51  Corry  v.  Mayor  &  Council  of  Baltimore,  196  U.  S.  466,  49  L.  ed.  556,  25 
Sup.  Ct.  297. 

52  Railroad  Company  v.  Smith,  48  Ohio  St.  219,  31  N.  E.  743. 

53  Dyer  v.  Drucker,  95  x\.  Y.  Supp.  749,  108  App.  Div.  238. 

474 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF  §  287 

ing  Act  of  1848  of  New  York,'^''  which  made  the  stockholders 
of  a  company  organized  under  it  individually  liable  to  the  cred- 
itors of  the  company,  to  the  amount  of  their  stock,  for  all  its 
debts,  until  the  whole  amount  of  the  capital  stock  had  been 
paid  in,  all  that  was  required  was  to  show  that  a  valid  debt 
was  contracted  before  the  capital  stock  was  paid  in,  either  in 
cash  or  in  property  honestly  regarded  as  a  fair  equivalent  to 
cash.  The  liability  covered  "all  debts  and  contracts  made  by 
said  company,"  irrespective  of  the  circumstances  under  which 
they  were  made.  There  was  no  exemption  from  liability,  be- 
cause credit  was  imprudently  given  by  the  creditor,  or  because 
he  gave  credit  upon  the  supposition  that  the  property  of  the 
corporation  was  sufficient  to  pay  its  debts. 

By  proof  that  the  stock  of  the  company  had  been  issued  as 
full-paid  stock  which  had  not  been  fully  paid,  a  legal  fraud  was 
established;  it  was  not  necessary  to  show  otherwise  an  actual 
fraudulent  intent.  So,  also,  if  it  were  shown  that  the  stock 
had  been  issued  in  payment  for  property,  with  knowledge  on 
the  part  of  its  trustees  that  the  value  of  the  property  was  much 
less  than  the  amount  of  the  stock,  no  other  fraudulent  intent 
than  that  which  is  evidenced  by  the  action  of  the  trustees 
needed  to  be  shown  to  authorize  a  recovery  .^^ 

The  liability  imposed  by  the  above  mentioned  statute  ^° 
upon  stockholders  of  a  company  organized  thereunder,  for  a 
failure  to  file  the  proper  certificate  of  payment,  upon  an  in- 
crease of  its  capital  stock,  attached  only  to  the  increase,  and 
only  stockholders  holding  the  increased  stock  were  liable;  the 
provision  had  no  reference  to,  or  effect  upon,  the  original 
capital  and  its  holders.  A  creditor  of  the  corporation,  who 
sought  by  action  to  enforce  such  a  liability,  was  required  to 
allege  and  prove  the  facts  showing  that  the  conditions  of  the 
statute  were  exactly  met  by  his  case;  no  presumptions  or  in- 

s*  §  10,  chap.  40,  Laws  of  1848,  law  repealed  by  Laws,  1909,  Genl.  Corp.  L. 
§  330. 

55  National  Tube  Works  Co.  v.  Gilfillan,  124  N.  Y.  .302,  35  N.  Y.  St.  Rep. 
357,  26  N.  E.  538,  9  Ry.  &  Corp.  L.  J.  270,  aff' g  46  Hun,  248,  11  N.  Y.  St. 
Rep.  533. 

58  §  10,  chap.  40,  Laws,  1848,  law  repealed  by  L.  1909,  Genl.  Corp.  L.  §  330. 

475 


§  288      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

fereiiccs  could  be  indulged  in.  Unless,  therefore,  the  stock- 
holder proceeded  against  was  proved  to  hold  some  of  the  in- 
creased stock,  he  was  not  brought  within  the  statute.^''  It  is 
decided  that  it  must  be  shown  that  there  is  a  willful  and  fraud- 
ulent neglect  of  the  corporate  interests  on  the  part  of  the  di- 
rectors or  managing  agents  to  enable  stockholders  to  sue  or 
defend  in  their  own  names.^^  Where  it  can  fairly  be  gathered 
from  the  allegations  of  a  complaint  in  a  stockholder's  action 
that  the  officers  and  directors  of  the  corporation  have  made 
use  of  relations  of  trust  and  confidence  in  order  to  secure  or 
promote  some  selfish  interest,  a  court  of  equity  will  require 
the  defendant  stockholders  to  answer  in  regard  to  the  facts.^® 

§  288.  Liability  of  Stockholders  to  Creditors — Unpaid 
Subscriptions  or  Stock. 

Creditors  of  a  corporation  may  hold  stockholders  liable  for 
the  amount  of  their  unpaid  subscriptions.^"  And  a  new  lia- 
bility is  not  created  by  a  statute  under  which  creditors  may 
hold  stockholders  liable  for  the  amount  of  their  unpaid  sub- 
scriptions, but  said  enactment  is  merely  declaratory  of  the 
common  law.^^ 

By  the  common  law  the  stockholders  of  an  incorporated 
company  are  liable  to  pay  their  subscriptions,  if  such  payment 
be  necessary,'  to  discharge  the  debts  of  the  company.  A  dis- 
tinction is  drawn  between  one  who  holds  his  stock  by  transfer 
and  an  original  subscriber.  The  former  may,  in  the  absence 
of  any  fraudulent  purpose,  discharge  himself  from  liability 
for  unpaid  installments  by  due  transfer  of  his  shares,  while 
the  latter  cannot  obtain  immunity  in  that  way.  The  subscrip- 
tion to  the  stock  and  the  acceptance  of  a  certificate  for  the 
shares  constitute  a  contract  between  the  subscriber  and  the 

57  Griffeth  V.  Green,  129  N.  Y.  517,  42  N.  Y.  St.  Rep.  101,  29  N.  E.  838. 
68  Home  Min.  Co.  v.  McKibben,  60  I&n.  387,  56  Pac.  756. 

59  Lawrence  v.  Weber,  65  Misc.  (N.  Y.)  603. 

60  Miller  v.  Higginbotham,  29  Ky.  L.  Rep.  547,  93  S.  W.  655;  Shields  v. 
Hobart,  172  Mo.  491,  72  S.  W.  669. 

61  Taylor  v.  Cummings  (U.  S.  C.  C),  127  Fed.  108;  Kurd's  111.  Rev.  Stat., 
1893,  chap.  32,  §  23. 

476 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF  §  289 

company  by  which  the  subscriber  engages  to  pay  the  remain- 
ing installments  on  demand  by  the  corporation.  From  this 
agreement  the  subscriber  cannot  recede  without  the  consent 
of  the  company .^2  So  a  liability  under  a  constitutional  pro- 
vision making  stockholders  liable  individually  for  corporate 
debts  in  an  amount  equal  to  their  unpaid  subscriptions  after 
exhaustion  of  the  corporate  property,  is  a  contractual  hability 
based  upon  their  subscription  agreement.^^  Stockholders  are 
also  liable  to  creditors  for  their  subscriptions  where  they  have 
ratified  the  same  by  accepting  dividends  after  compliance  by 
the  corporation  with  statutory  conditions  precedent  to  doing 
business  even  though  they  became  shareholders  before  such 
compliance;  it  constitutes  no  ground  of  exemption  from  lia- 
bility that  they  acquired  their  stock  before  the  corporation 
had  authority  to  issue  it.^"*  So  subscribers  are  chargeable  with 
liability  to  creditors  for  corporate  debts  for  the  difference  be- 
tween the  par  value  of  stock  and  the  percentage  thereof  of 
payments  made  thereon,  notwithstanding  a  decree  or  specific 
performance  of  subscription  contracts  authorizing  the  issue 
to  subscribers  of  certificates  on  payment  of  such  'pro  rata  per- 
centage, where  the  creditors  were  not  parties  and  did  not  have 
any  rights  involved  in  the  action  between  the  stockholders 
in  which  such  decree  was  rendered.^^ 

§  289.  Same  Subject. 

The  trust  arising  in  favor  of  creditors  by  subscriptions  to 
the  stock  of  a  corporation  cannot  be  defeated  by  a  simulated 
payment  of  such  subscription,  nor  by  any  decree  short  of 
actual  payment  in  good  faith.^*^  Nor  does  a  stockholder's 
statutory  liability  for  the  unpaid  amount  of  his  stock  depend 

82  Hood  V.  McNaughton,  54  N.  J.  L.  425,  24  Atl.  497. 

63  Wyman  v.  Bowman  (U.  S.  C.  C.  A.),  127  Fed.  257,  Const.  Neb.,  art.  116, 
§  4.    See  §  282,  herein. 

64  Murphy  v.  Wheatley,  102  Md.  501,  63  Atl.  62. 

65  Bates  V.  Great  Western  Teleg.  Co.,  134  111.  536,  25  N.  E.  521. 

66  Camden  v.  Stuart,  144  U.  S.  104,  12  Sup.  Ct.  585,  36  L.  ed.  363.  The 
court  affirmed  the  judgments  of  the  court  below  against  stockholders  in 
these  cases  whose  subscriptions  for  stock  in  the  corporation  were  shown  to  be 
in  part  unpaid. 

477 


§  290      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

upon  whether  a  creditor  did  or  did  not,  at  the  time  he  extended 
credit  to  the  corporation,  have  knowledge  that  the  corporate 
stock  was  partly  unpaid.^^  It  is  held  in  a  Minnesota  case, 
where  the  action  was  by  an  assignee  for  creditors  of  a  corpora- 
tion to  recover  the  amount  of  a  stockholder's  unpaid  subscrip- 
tion, that  even  though  his  subscription  was  obtained  for  the 
real  purpose  of  enabling  the  corporation  to  engage  in  gambling 
and  selling  pools  on  races,  he  could  not  for  that  reason  avoid 
Uabihty.^*  Creditors  cannot,  however,  hold  liable  a  subscriber 
to  corporate  stock  where  the  only  purpose  of  the  subscription 
was  to  further  the  incorporation  and  there  was  a  valid  release 
of  such  subscriber  after  the  company  was  incorporated  and 
while  it  had  no  debts  outstanding  and  the  other  subscribers 
unanimously  consented  to  such  release  .^^  And  where  the  en- 
tire authorized  corporate  stock  has  been  issued  to  other  sub- 
scribers and  the  corporation  has  been  paid  therefor,  a  mere 
subscriber  is  relieved  of  liability  on  his  subscription.'^'' 

§  290.  Liability  of  Stockholders — ^Unpaid  Subscriptions — 
Parties. 

Under  a  Colorado  decision  where  stockholders  are  liable,  un- 
der a  State  statute,  to  the  extent  of  their  unpaid  stock  for  the 
corporation's  debts,  a  stockholder  and  the  corporation  may  be 
joined  as  defendants  and  a  separate  judgment  obtained  against 
the  stockholder  by  the  plaintiff  in  an  action  on  an  insurance 
policy  where  the  corporation  has  discontinued  its  business, 
leaving  unpaid  debts.^^  Under  a  Connecticut  decision  the 
stockholders  and  the  administrator  of  a  stockholder  of  a  dis- 
solved Missouri  corporation  which  is  without  assets,  and  di- 
rectors thereof  who  might  be  made  plaintiffs  but  refuse  to  sue, 
may  be  joined  as  defendants,  but  the  corporation  need  not  be 

67  Sprague  v.  National  Bank  of  America,  172  III.  149,  50  N.  E.  19,  42  L.  R. 
A.  606.    See  Cardwell  v.  Kelly,  95  Va.  570,  28  S.  E.  953,  40  L.  R.  A.  240. 

88  Augir  V.  Ryan,  63  Minn.  373,  65  N.  W.  640. 

89  Scottish  Security  Co.'s  Receiver  v.  Starks,  25  Ky.  L.  Rep.  1722,  78  S.  W, 
455. 

70  Level  Land  Co.  v.  Hayward,  95  Wis.  109,  69  N.  W.  567. 

71  Tabor  v.  Goss  &  P.  Mfg.  Co.,  11  Colo.  419,  18  Pac.  537.  - 

478 


RIGHTS,    LIABILITIES    AND    1U<:MP]DIBS    OI'^  §  291 

made  a  party,  in  an  action  brought  in  the  former  State  by  a 
creditor  to  recover  the  amount  of  his  claim  out  of  unpaid 
subscriptions^^ 

Under  a  Kentucky  decision  each  stockholder's  liability  is  sev- 
eral and  depends  upon  the  amount  of  his  unpaid  subscription. 
A  creditor  may,  therefore,  sue  one  or  more  stockholders  of  an 
insolvent  corporation  to  recover  the  amount  of  his  debt,  it  not 
being  necessary  to  make  the  other  stockholders  parties,  nor 
need  an  account  be  taken  of  the  other  indebtedness.'^  Again, 
a  successor  of  a  trustee  under  a  trust  deed  for  creditors  may, 
in  his  own  name,  bring  suit  against  a  stockholder  for  a  call 
for  unpaid  subscriptions  to  pay  corporate  debts,  such  call  hav- 
ing been  approved  by  the  stockholders.'^'*  The  statutory  liabil- 
ity of  stockholders  for  debts  of  the  corporation  may  be  enforced 
through  a  bill  by  a  receiver,  brought  in  equity.'^^  In  the  case 
of  stockholders  of  a  foreign  corporation,  if  an  action  is  brought 
by  a  creditor  to  enforce  their  statutory  liability  it  is  necessary 
that  the  corporation  and  all  the  stockholders  therein  should  be 
made  parties. '^^ 

§  291.  Liability  of  Stockholders  to  Creditors  Where  Stock 
Received  Without  Consideration  or  for  Less  Than  Its  Value 
— "  Bonus  Stock." 

If  shares  of  stock  are  received  without  payment,  the  holder 
thereof  may  be  held  liable  to  creditors  for  unpaid  stock  where 
the  corporation  becomes  insolvent.'^  So  the  assignee  and 
creditors  of  an  insolvent  corporation  may  hold  the  share- 
holders liable  to  the  extent  of  the  par  value  of  stock,  with  in- 
terest thereon  from  the  time  when  the  stock  should  have  been 
paid  for,  where  such  stock  is  issued  to  and  received  by  such 
stockholders  without  payment.''* 

72  Lewisohn  v.  Stoddard,  78  Conn.  575,  63  Atl.  621. 

73  Williams  V.  Chamberlain,  29  Ky.  L.  Rep.  6()G,  94  S.  W.  29- 

74  Lewis  V.  Glenn,  84  Va.  947,  6  S.  E.  866. 

75  Andrews  v.  Bacon  (U.  S.  C.  C),  38  Fed.  777. 

76  Elkhart  Nat.  Bank  v.  Converse  (U.  S.  C.  C.  A.),  87  Fed.  252,  30  C.  C,  A. 
632,  58  U.  S.  App.  83,  aff'g  84  Fed.  76. 

77  White  V.  Hook,  87  Md.  733,  40  Atl.  901. 

78  Shaw  V.  Gilbert,  111  Wis.  65,  86  N.  W.  188. 

470 


§  291      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

If  a  stockholder  in  a  corporation  who  assents  to  an  increase 
in  the  capital  stock  of  the  corporation  and  its  gratuitous  dis- 
tribution among  the  shareholders,  receives  such  stock  as  full 
paid  stock,  an  obligation  arises  to  pay  for  it  in  full,  when 
called  upon  to  do  so  by  creditors  whose  debts  are  subsequent 
to  the  authorization  of  the  increase;  but  this  equity  does  not 
exist  in  favor  of  a  creditor  whose  debt  was  contracted  prior 
to  such  authorization 7*^  The  equitable  right  of  creditors  of 
a  corporation  to  compel  the  holders  to  pay  for  "bonus"  stock 
or  stock  given  without  consideration,  could,  under  the  Minne- 
sota statute  of  1878,  be  enforced  in  a  sequestration  proceeding 
upon  the  complaint  of  any  interested  creditor  who  had  become 
a  party  to  the  proceeding.  But  the  right  of  creditors  to  com- 
pel such  holders  to  pay,  contrary  to  their  actual  agreement 
with  the  corporation,  is  held  to  rest  neither  upon  implied  con- 
tract nor  upon  any  trust  fund  doctrine  but  upon  the  ground 
of  fraud.  The  fraud  in  such  case  consists  in  the  misrepresen- 
tation as  to  the  actual  amount  of  capital,  upon  the  faith  of 
which  persons  have  dealt  with  the  corporation  and  given  it 
credit.  Therefore,  it  is  only  those  creditors  who  have  relied, 
or  who  can  fairly  be  presumed  to  have  relied  on,  the  stock 
representing  actual  capital,  in  whose  favor  equity  will  enforce 
the  payment  of  such  stock;  and  pa3rment  can  never  be  en- 
forced in  favor  of  one  who  became  a  creditor  before  the  "bonus" 
stock  was  issued.*"  Again,  if  there  are  corporate  debts  and 
stock  has  been  transferred  to  stockholders  for  a  nominal 
value,  creditors  may  hold  such  stockholders  liable  therefor 
to  the  extent  of  the  par  value  of  the  stock  if  necessary  to  sat- 
isfy such  debts. *^ 

Shares  of  stock,  however,  in  a  corporation  issued  and  sold 
as  full  paid  stock,  but  for  a  sum  less  than  its  par  value,  are  not 
void,  but  the  agreement  between  the  holder  and  the  corpora- 
ls Handley  v.  Stutz,  139  U.  S.  417,  .35  U.  S.  227,  11  Sup.  Ct.  530,  9  Ry.  & 
Corp.  L.  J.  362,  case  explained  in  Camden  v.  Stuart,  144  U.  S.  104,  12  Sup. 
Ct.  585,  36  L.  ed.  363. 

80  Hospes  V.  Northwestern  Mfg.  Car  Co.,  48  Minn.  174,  50  N.  W.  1117,  15 
L.  R.  A.  470,  45  Alb.  L.  J.  277,  36  Am.  &  Eng.  Corp.  Cas.  206. 

81  Gogebic  Inv.  Co.  v.  Iron  Chief  Min.  Co.,  78  Wis.  427,  47  N.  W.  726. 

480 


illGHTS,    LIABILITIES    AND    REMEDIES    OF  §  292 

tion  that  it  sliall  be  considered  and  treated  as  paid  in  full  is 
voidable  as  to  the  creditors  of  the  corporation. ^^  If  creditors 
have  no  knowledge  of  an  arrangement  whereby  stock  which 
was  issued  as  full  paid  was  in  fact  purchased  at  fifty  per  cent 
of  the  par  value  to  enable  the  corporation  to  increase  its  cap- 
ital and  begin  its  business,  they  can  hold  the  purchaser  of 
such  stock  liable  for  the  balance  of  the  price  unpaid  up  to  the 
value  of  the  stock  so  issued. ^^ 

But  an  active  corporation,  finding  its  original  capital  im- 
paired by  loss  or  misfortune,  may,  for  the  purpose  of  recuperat- 
ing itself,  and  of  producing  new  conditions  for  the  successful 
prosecution  of  its  business,  issue  new  stock  and  put  it  upon 
the  market,  and  sell  it  for  the  best  price  that  can  be  obtained; 
and  in  such  case  no  trust  in  favor  of  a  creditor  arises  against 
the  purchaser  who,  in  good  faith,  buys  for  less  than  par.*^ 

§  292.  Same  Subject  Continued— Stockholders'  Rights. 

Iti  a  case  decided  in  the  Federal  Supreme  Court  in  1890,  the 
principle  was  reaffirmed  that  when  the  interest  of  the  public 
or  of  a  stranger  is  to  be  affected  by  any  transaction  between 
the  stockholders  owning  the  corporation,  and  the  corporation 
itself,  such  transaction  is  subject  to  rigid  scrutiny,  and  if 
found  to  be  infected  with  anything  unfair  towards  such  third 
person,  calculated  to  injure  him,  or  designed  intentionally 
and  inequitably  to  screen  the  stockholder  from  loss  at  the  ex- 
pense of  the  general  creditor  it  will  be  disregarded  or  annulled 
so  far  as  it  inequitably  affects  him.  And,  therefore,  when- 
ever the  interest  of  creditors  requires,  those  holding  shares  in 
a  corporation,  purporting  to  be,  but  which  are  shown  not  to 
have  been,  paid  for  to  the  extent  of  their  face  value,  should  be 
held  liable  to  pay  for  such  shares  unless  it  appears  that  they 
acquired   the  stock  under  circumstances   that  did  not  give 

82  Shaw  V.  Staight,  107  Minn.  152,  20  L.  R.  A.  1077,  119  N.  W.  951. 

83  Rickerson  Roller  Mill  Co.  v.  Farrell  Foundry  &  M.  Co.  (U.  S.  C.  C.  A.), 
75  Fed.  554,  43  U.  S.  App.  452. 

84  Handley  v.  Stutz,  139  U.  S.  417,  35  L.  ed.  227,  11  Sup.  Ct.  530,  9  Ry.  & 
Corp.  L.  J.  362,  case  explained  in  Camden  v.  Stuart,  144  U.  S.  104,  12  Sup. 
Ct.  585,  36  L.  ed.  363. 

31  481 


§  292      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

creditors  and  other  stockholders  just  ground  for  complaint. 
In  this  case  a  railroad  corporation  being  indebted  to  a  con- 
struction company  in  a  certain  amount,  which  it  was  unable 
to  pay  in  money,  had  a  settlement  with  the  latter,  whereby 
the  debt  was  paid  in  shares  of  the  stock  of  the  railroad  com- 
pany of  a  par  value  equal  in  amount  to  five  times  the  debt. 
The  stock  was  taken  at  twenty  cents  on  the  dollar,  but  was  not 
at  the  time  worth  anything  in  the  market.  One  Greene,  a 
member  of  the  construction  company,  received  nine  hundred 
and  ten  shares  as  his  part.  Four  years  after  said  settlement, 
the  railroad  and  its  appurtenances  were  sold  under  a  decree 
foreclosing  a  mortgage  given  to  secure  the  bonds  of  the  rail- 
road company.  One  Clark,  a  holder  of  bonds  issued  l)y  the 
railroad  company  two  years  after  said  settlement,  obtained 
judgment  for  the  amount  due  him,  upon  which  execution  was 
issued  and  returned  six  years  thereafter,  no  property.  Greene 
having  died  Clark  brought  suit  against  his  administrator  in  one 
of  the  Circuit  Courts  of  Iowa,  sitting  in  probate,  to  hold  his  es- 
tate liable  for  the  difference  between  what  was  paid  for  the 
stock  and  its  face  value,  upon  the  ground  that  the  stock  of  the 
corporation  was  a  trust  fund  for  creditors,  and  that  as  between 
creditors  and  stockholders,  the  latter  was  bound  to  account 
for  its  face  value.  The  case  was  removed  to  and  tried  in  the 
Federal  Circuit  Court  where  a  verdict  was  given  for  the  de- 
fendant. In  addition  to  reaffirming  the  above-stated  princi- 
ple and  deciding  certain  points  relating  to  removal  and  juris- 
diction, the  Supreme  Court  held  that  the  estate  of  Greene  was 
not  liable  for  the  face  value  of  the  stock  by  reason  of  the  stat- 
ute of  Iowa  providing  that  nothing  therein  contained  "ex- 
empts the  stockholders  of  any  corporation  from  individual 
liability  to  the  amount  of  the  unpaid  installments  on  the  stock 
owned  by  them  or  transferred  by  them  for  the  purpose  of  de- 
frauding creditors,  and  execution  against  the  company  may 
to  that  extent  be  levied  upon  such  private  property  of  any 
individual."  ^  It  was  also  decided  that  whether  a  stockholder 
in  law  or  in  fact,  owed  to  the  cor]'»oration  any  sum  on  the  stock 

85  Revision  of  Iowa,  1860,  §  1172;  Code,  1S7.3.  §  1082. 
482 


lilGflT.S,    LiAlULlTlES    AND    KEMEDIES    OF  §  292 

held  by  him,  was  left  by  the  statute  to  be  determined  in  each 
case,  upon  its  own  circumstances,  and  in  accordance  with  the 
l)rinciples  of  general  law  touching  the  rights  and  liabilities 
of  creditors  and  stockholders;  and  that  while  the  capital  stock 
of  a  corporation,  especially  its  unpaid  subscriptions,  is  a  trust 
fund  sub  modo  for  the  benefit  of  its  general  creditors,  a  corpo- 
ration— no  statute  forbidding — may  in  good  faith  sell  or  dis- 
pose of  its  stock  to  creditors  in  tUscharge  of  their  debts. *^  It  is 
not  necessary  that  a  "subsequent"  creditor  should  allege  that 
when  he  dealt  with  the  corporation  he  believed  that  the  stock 
had  been  paid  foi-,  and  that  he  gave  credit  on  the  faith  of  it. 
If  in  fact  the  creditor  had  knowledge  of  the  arrangement  by 
which  the  "bonus"  stock,  or  stock  given  without  considera- 
tion, was  issued,  that  is  a  matter  of  defense,  to  be  set  up  by 
the  defendant  stockholder.  But  where  a  creditor  asks  for  re- 
lief against  a  stockholder,  he  should  show  his  own  equities 
entitling  him  to  relief.  Therefore,  when  it  appears  that  he  is 
not  the  original  creditor,  but  had  purchased  the  claims  after 
the  corporation  had  become  insolvent,  and  its  affairs  had  been 
placed  in  a  receiver's  hands,  he  should  state  what  he  paid  for 
the  claims,  or  at  least  show  that  he  paid  a  substantial  consid- 
eration for  them.  Equity  will  not  grant  relief  for  the  benefit 
of  those  who  have  bought  up  claims  against  an  insolvent 
corporation  for  a  nominal  consideration,  for  the  purpose  of 
si)eculating  on  the  liability  of  stockholders;  the  right  of  action 
in  favor  of  creditors  against  the  holders  of  such  bonus  stock 
does  not  accrue  until  the  corporation  becomes  insolvent.®^ 
If  stockholders  are  shown  not  to  have  paid  the  par  value  of 
their  stock  and  not  to  have  acted  in  good  faith,  a  prima  facie 
case  is  made  out  in  favor  of  creditors  against  such  stockholders 
for  the  corporate  debts  of  an  insolvent  corporation.*^     The 

88  Clark  V.  Bever,  139  U.  S.  96,  35  L.  ed.  88,  11  Sup.  Ct.  468,  9  Ry.  &  Corp. 
L.  J.  322.  See  also  Fogg  v.  Blair,  139  U.  S.  118,  35  L.  ed.  104,  11  Sup.  Ct. 
476,  case  explained  in  Camden  v.  Stuart,  144  U.  S.  104,  12  Sup.  Ct.  585,  36 
L.  ed.  363. 

87  Hospes  V.  Northwestern  Mfg.  Car  Co.,  48  Minn.  174,  50  N.  W.  1117,  15 
L.  R.  A.  470,  45  Alb.  L.  J.  277,  .36  Am.  &  Eng.  Corp.  Cas.  206. 

88  Gogebic  Inv.  Co.  v.  Iron  Chief  Min.  Co.,  78  Wis.  427,  47  N.  W.  726. 

483 


§  293       PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

holder  of  stock  issued  and  sold  as  full  paid,  but  for  a  sum  less 
than  its  par  value,  may,  however,  maintain  an  action  to  pro- 
tect such  rights  as  accrue  to  him  as  a  stockholder.^''  But  stock- 
holders do  not  sustain  any  such  injury  as  to  constitute  a  basis 
for  a  suit  by  a  sale,  made  in  good  faith,  of  its  corporate  stock  at 
less  than  its  par  value  for  money  and  services. ''^  And  although 
a  corporation  has  issued  stock  without  the  payment  of  the  con- 
sideration in  money,  labor  or  property,  as  required  by  the  New 
York  Stock  Corporation  Law,**^  one  who  purchases  such  stock 
from  the  person  to  whom  it  was  illegally  issued  cannot  recover 
the  face  value  thereof  from  his  vendor  under  a  complaint  not 
charging  him  with  fraud  or  deceit,  but  seeking  a  recovery  solely 
upon  the  ground  that  the  stock  was  void  because  illegally  issued.^^ 

§  293.  Consideration  for  Issue  of  Stock — Property,  etc.— 
"When  Payment  in  Stock  to  Contractor  Is  Not  a  Stock  Sub- 
scription. 

Where  a  corporation  under  its  charter  powers,  pays  for 
property  purchased  with  its  capital  stock,  such  sale  cannot  be 
set  aside  in  the  absence  of  fraud,  on  the  ground  that  the  value 
of  the  property  was  not  equal  to  the  value  of  the  stock.^^  If 
the  entire  capital  stock  is  by  agreement  fully  paid  for  in  land 
transferred  to  the  corporation  and  only  paid-up  stock  is  to  be 
issued  no  personal  Habihty  exists  against  the  stockholders  for 

89  Shaw  V.  Staight,  107  Minn.  152,  20  L.  R.  A.  1077,  119  N.  W.  951. 

90  Potter  V.  Necedah  Lumber  Co.,  105  Wis.  25,  80  N.  W.  88,  118. 

91  §  42  (former  Stock  Corp.  Law,  Laws,  1890,  chap.  564,  as  amended 
by  Laws,  1892,  chap.  688,  and  Laws,  1901,  chap.  354),  §  55,  Laws,  1909, 
chap.  61,  5  Birdseye's,  Gumming  &  Gilbert's  Consol.  Laws  of  N.  Y.,  p.  5771. 

92  Ersfeld  v.  Exner,  128  App.  Div.  (N.  Y.)  135. 

93  Bickley  v.  Schlag,  46  N.  J.  Eq.  533,  8  Ry.  &  Corp.  L.  J.  290,  20  Atl.  250, 
31  Am.  &  Eng.  Corp.  Cas.  523.  A  case  of  a  bill  by  a  judgment  creditor  against 
stockholders  to  compel  them  to  liquidate,  for  complainants'  benefit,  the 
arrears  of  their  subscriptions  to  the  capital  stock  of  the  company;  the  real 
question,  however,  was  that  as  between  the  stockholders  and  the  corpora- 
tion the  stock  had  been  paid  for  in  full  for  they  had  transferred  certain  prop- 
erty to  the  corporation  for  stock,  each  share  purchased  being  marked  "  issued 
for  property  purchased,"  and  so  long  as  the  contract  for  sale  subsisted  they 
had  an  indisputable  title  to  the  stock.  It  was  further  decided  in  addition  to 
the  point  in  the  text,  that  the  proceeding  must  be  by  a  general  creditor's  bill. 

484 


RIGHTS,    LIABILITIES    AXD    REMEDIES    OF  §  293 

the  unpaid  balance  of  the  purchase  price  of  such  land  by  the 
person  who  transferred  the  same  to  the  corporation.®^ 

Where  a  corporation  purchases  the  stock  of  goods  and  ac- 
counts receivable,  etc.,  of  a  copartnership,  agreeing  to  pay 
therefor  a  certain  portion  in  cash  and  the  balance  by  the  issue 
of  a  certain  number  of  shares  of  common  and  preferred  stock, 
and  certificates  agreed  to  be  delivered  to  certain  members  of 
the  copartnership  were  never  delivered  under  such  agreement, 
and  the  corporation  subsequently  became  insolvent,  it  was  held 
that  the  parties  mentioned  in  the  agreements  for  the  purchase 
of  the  property  acquired  by  the  corporation  became  entitled 
to  receive  the  stipulated  amounts  of  stock  immediately  upon 
the  acceptance  by  the  corporation  of  the  transfer  of  the  prop- 
erty, and  although  all  the  stock  had  not  been  issued,  it  would 
be  treated  as  "issued  and  outstanding"  within  the  meaning 
of  the  Stock  Corporation  Law  of  New  York  relating  to  the 
liability  of  holders  of  capital  stock  not  fully  paid.®^  But  where 
it  appears  that  the  amount  of  stock  agreed  to  be  paid  for  the 
property  transferred  to  the  corporation  greatly  exceeded  the 
value  of  the  property,  the  stock  is  not  "fully  paid"  within  the 
meaning  of  the  above  statute. ^'^  A  corporation  organized  un- 
der the  General  Manufacturing  Act  of  New  York  ®'  could  not, 

w  Mercer  v.  Park  City  Mineral  Water  Co.,  18  Ky.  L.  Rep.  985,  38  S.  W. 
841. 

95  N.  Y.  Laws,  1890,  chap.  564,  §  54,  as  amended  by  Laws,  1892,  chap.  688, 
and  Laws,  1901,  chap.  354.  "The  amendment  of  1901  strikes  out  the  pro- 
vision that  stockholders  shall,  jointly  and  severally,  be  personally  liable  to 
creditors,  to  an  amount  equal  to  the  amount  of  stock  held  by  them,  for  every 
debt  of  the  corporation,  until  the  whole  amount  of  the  capital  stock  issued 
and  outstanding  at  the  time  the  debt  was  incurred  shall  have  been  fully 
paid.  For  this  double  liability,  until  all  other  stockholders  shall  have  paid 
up,  the  amendment  provides  that  the  holder  of  capital  stock  '  not  fully  paid ' 
shall  be  personally  liable  to  an  amount  '  equal  to  the  amount  unpaid  on  the 
stock '  held  by  him  for  debts  of  the  corporation  contracted,  while  such  stock 
was  held  by  him.  See  Laws,  1901,  chap.  354,  which  saves  rights  pending 
when  the  amendment  of  1901  took  effect."  1  Gumming  &  Gilbert's  Genl. 
Laws  of  N.  Y.,  p.  884;  5  Birdseye's  Gumming  &  Gilbert's  Consol.  Laws  of 
N.  Y.  Annot.,  p.  5773,  Laws,  1909,  chap.  61,  §  56. 

96  Flour  City  National  Bank  v.  Shire,  84  N.  Y.  Supp.  410,  88  App.  Div.  401, 
aff'dl79N.Y.  587. 

97  Chap.  40,  Laws,  1848,  repealed  by  Laws,  1909,  Genl.  Corp.  L.  §  330. 

4S-) 


§  2!)3       PARTIES  CONTINUED— CREDITORS — STOCKHOLDERS — 

it  seems,  issue  its  stock,  iis  full-})aitl  at  anything  less  than  its 
par  vahio,  in  jjayment  for  property  purchased;  and  a  distinc- 
tion existed  in  this  respect  between  manufacturing  and  rail- 
road corporations.  It  seems,  however,  that  a  manufacturing 
corporation  had  power  to  issue  its  bonds  at  less  than  par, 
either  for  money  or  in  payment  for  property,  and  the  repeal  of 
the  statute  of  usury,  so  far  as  it  regarded  corporations,  op- 
erated to  give  validity  to  corporate  bonds  negotiated  at  less 
than  par.^* 

A  contract,  however,  by  a  railroad  to  pay  a  contractor  in 
bonds  and  full-paid  nonassessable  stock  of  the  corporation  for 
his  work,  labor  and  materials  in  constructing  and  equip})ing 

98  Gamble  v.  Queen's  County  Water  Co.,  123  N.  Y.  91,  33  N.  Y.  St.  Rep. 
88,  25  Abb.  N.  C.  410,  25  N.  E.  201,  8  R.  &  Corp.  L.  J.  484,  9  L.  R.  A.  527, 
31  Am.  &  Eng.  Corp.  Cas.  313,  rev'g  5  N.  Y.  Supp.  124,  23  N.  Y.  St.  Rep. 
409,  52  Hun,  166,  distinguishing  on  the  first  point  Van  Cott  v.  Van  Brunt, 
82  N.  Y.  535,  and  on  the  second  point,  Duncomb  v.  New  York,  Housatonic  & 
Northern  Rd.  Co.,  84  N.  Y.  190.  See  second  next  following  paragraph  in  this 
note. 

Consideration  for  issue  of  stock  and  bonds.  N.  Y.  Stat.  Laws,  1909, 
chap.  61,  §  55  (Birdseye's  Camming  &  Gilbert's  Consol.  Laws  of  N.  Y. 
Annot.,  p.  5771),  provides  as  follows:  "No  corporation  shall  issue  either 
stock  or  bonds  except  for  money,  labor  done  or  property  actually  received 
for  the  use  and  lawful  purposes  of  such  corporation.  Any  corporation  may 
purchase  any  property  authorized  by  its  certificate  of  incorporation,  or 
necessary  for  the  use  and  lawful  purposes  of  such  corporation,  and  may  issue 
stock  to  the  amount  of  the  value  thereof  in  payment  therefor,  and  the  stock 
so  issued  shall  be  full  paid  stock  and  not  liable  to  any  further  call,  neither 
shall  the  holder  thereof  be  liable  for  any  further  payment  under  any  of  the 
provisions  of  this  chapter;  and  in  the  absence  of  fraud  in  the  transaction  the 
judgment  of  the  directors  as  to  the  value  of  the  property  purchased  shall 
be  conclusive;  and  in  all  statements  and  reports  of  the  corporation,  by  law 
required  to  be  published  or  filed,  this  stock  shall  not  be  stated  or  reported  as 
being  issued  for  cash  paid  to  the  corporation,  but  shall  be  reported  as  issued 
for  property  purchased." 

The  annotators  append  the  following  note:  "Source — Former  Stock  Corp. 
L.  (Laws,  1890,  chap.  564),  §  42,  as  amended  by  Laws,  1892,  chap.  688, 
and  Laws,  1901,  chap.  354.  The  amendment  of  1901  struck  out  the  words 
'  No  stock  shall  be  issued  for  less  than  its  par  value.  No  such  bonds  shall  be 
issued  for  less  than  the  fair  market  value  thereof.'  The  last  sentence  added. 
The  amendment  authorizes  the  issue  of  stock  as  full  paid  at  less  than  its  par 
value  for  property,  and  thus  supersedes  Gamble  v.  Queen's  County  Water- 
works Co.,  123  N.  Y.  91  (1890),  and  other  cases  to  the  contrary." 

48G 


RIGHTS,    LIABILITIES    A.ND    REMEDIES    OF  ^  294 

the  road  is  not  a  stock  subscription  by  the  contractor,  which 
makes  him  Hable  for  the  par  value  of  the  stock.  Such  contract 
is  not  a  purchase  of  the  stock  and  bonds  to  be  paid  for  in  work 
and  property,  but  is  a  contract  to  accept  full-paid  stock  and 
bonds  as  payment  for  the  building  of  the  road.  The  receiver 
appointed  on  the  insolvency  of  such  railroad  is  not  entitled  to 
recover  from  such  contractor  the  alleged  value  of  the  stocks  and 
bonds  received  as  compensation  for  the  construction  of  the 
road,  when  it  is  not  alleged  that  the  cost  of  constructing  the 
road  and  the  value  of  the  properties  acquired  from  the  con- 
tractor were  of  less  value  than  the  par  value  of  the  stock  and 
bonds  delivered  in  payment.  In  any  event,  although  the  pay- 
ment of  the  contractor  in  bonds  and  stocks  were  fraudulent, 
the  receiver  not  being  vested  with  rights  personal  to  the  cred- 
itors and  merely  standing  in  the  place  of  the  corporation,  can 
maintain  no  action  against  the  contractor  to  recover  the  al- 
leged value  of  the  stock  and  bonds,  being,  like  the  corporation, 
bound  by  an  equitable  estoppel.^^ 

§  294.  Stock  Issued  for  Property— Valuation  Should  Be 
Fair  and  Just — Necessity  of  Good  Faith  in  Transaction. 

If  stock  is  issued  for  property  the  value  thereof  should  be  a 
fair  and  just  equivalent  for  the  value  of  the  stock.^  And  where 
corporate  stock  is  to  be  paid  for  in  property  the  agreement 
therefor  should,  in  order  to  be  valid  as  against  creditors,  be  of 
such  a  character  as  to  evidence  an  intent  on  the  part  of  the 
stockholder  to  justly  and  fairly  pay  for  his  stock  in  that  man- 
ner and  not  to  thereby  avoid  just  payment.^ 

The  law  presumes,  however,  when  it  is  shown  that  the  stock 
in  a  corporation  has  been  paid  for  in  full  by  the  conveyance 
of  property,  and  there  is  no  evidence  of  value  of  the  property, 
that  the  consideration  was  adequate.^    While,  in  the  absence 

»B  Bostwick  V.  Young,  103  N.  Y.  Supp.  607,  118  App.  Div.  490,  aff'd  in 
(mem.)  194  N.  Y.  516,  87  N.  E.  1115. 

1  Van  Cleve  v.  Berkey,  143  Mo.  109,  44  S.  W.  743,  42  L.  R.  A.  593. 

2  Manhattan  Trust  Co.  v.  Seattle  Coal  &  Iron  Co.,  16  Wash.  499,  48  Pac. 
333,  737. 

3  Lea  V.  Iron  Belt  Mercantile  Co.   119  Ala.  271,  24  So.  28. 

■187 


§  295       PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

of  some  constitutional  or  statutory  provision  prohibiting  such 
action,  paid-up  shares  of  stock  may  be  issued  by  a  corporation 
for  the  purchase  of  property,  still  it  is  essential  that  the  cor- 
poration should  act  in  good  faith  and  that  the  purchase  should 
be  based  upon  a  fair  valuation  of  the  property;  there  should 
not  be  such  a  material  or  gross  overvaluation  between  the 
contracting  parties  as  to  constitute  a  fraud  upon  subsequent 
creditors,  for  in  such  a  case  the  latter  can  recover,  from  the 
persons  holding  such  shares,  the  difference  between  the  par 
value  of  the  stock  and  actual  value  of  the  property  so  pur- 
chased.^ So  where  the  charter  of  a  corporation  authorizes 
capital  stock  to  be  paid  for  in  property,  and  the  shareholders 
honestly  and  in  good  faith  pay  for  their  subscriptions  to  shares 
in  property  instead  of  money,  third  parties  have  no  ground  of 
complaint.^  And  a  stockholder  in  an  insolvent  corporation, 
who  has  paid  his  stock  subscription  in  full  by  a  transfer  of  a 
tract  of  land,  in  good  faith,  at  an  agreed  value,  for  the  use  of 
the  company's  business,  is  not  liable  in  equity  to  a  creditor 
of  the  corporation  who  had  knowledge  of  and  assented  to  the 
transaction  at  the  time  when  it  took  place,  solely  upon  the 
ground  that  the  land  turned  out  to  be  of  less  value  than  was 
agreed  upon.^ 

§  295.  Stock  Issued  for  Property — Material  Overvalua- 
tion— Stockholders  Not  Necessarily  Liable  to  Creditors 
Therefor— Good  Faith. 

Stockholders  of  a  corporation  are  not  necessarily  liable  to 
creditors  for  the  difference  between  the  nominal  value  of  their 
stock  and  the  real  value  of  property  transferred  to  the  corpo- 
ration even  though  there  was  a  material  overvaluation;  and 
such  hability  does  not  exist  where  a  firm  was  organized  into 
a  corporation  and  the  shareholders  received  their  stock  as 

*  Hastings  Malting  Co.  v.  Iron  Range  Brew.  Co.,  65  Minn.  28,  47  N.  W.  652. 
See  Wishard  v.  Hansen,  99  Iowa,  .307,  68  N.  W.  691,  61  Am.  St.  Rep.  138, 
5  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  437. 

5  Coit  V.  Gold  Amalgamating  Co.,  119  U.  S.  343,  30  L.  ed.  420,  7  Sup.  Ct. 
231. 

•  Fort  Madison  Bank  v.  Alden,  129  U.  S.  372,  9  Sup.  Ct.  332,  32  L.  ed.  764. 

488 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF  §  296 

"full  paid"  for  their  interest  in  the  firm  and  the  overvaluation 
of  the  assets  was  made  without  any  intent  to  so  overvalue  and 
was  adopted  in  good  faith 7  So  where  no  claim  is  made  that 
the  transaction  is  fraudulent  the  fact  that  stock  was  received 
in  payment  of  lands  transferred  to  the  corporation  at  a  price 
which  greatly  exceeded  their  real  value  is  immaterial  in  a 
suit  by  one  who  has  paid  debts  of  an  insolvent  corporation  in 
an  amount  greater  than  his  share  thereof.*  So  under  a  Louis- 
iana decision  it  is  not  sufficient  to  hold  shareholders  liable  as 
for  unpaid  subscriptions  that  the  property  purchased  with 
stock  at  its  par  value  is  overvalued,  but  the  transaction  must 
first  be  impeached  as  fraudulent  against  the  corporation.^ 

§  296.  Stock  Issued  for  Property — Shareholder  May  Be 
Liable  Where  Overvaluation  Shows  Fraud  Upon  Creditors 
Though  None  Intended. 

Where,  pursuant  to  an  agreement  among  themselves,  part- 
ners capitalize  the  partnership  property  at  a  valuation  greatly 
in  excess  of  its  true  value;  create  a  corporation  under  the  laws 
of  the  State  to  continue  the  former  partnership  business,  fixing 
its  capital  stock  at  a  sum  equal  to  the  inflated  value  placed  on 
the  partnership  property;  elect  themselves  managing  officers 
of  the  concern;  transfer  this  property,  at  such  inflated  value, 
to  the  corporation  in  exchange  for  its  entire  capital  stock 
which  they  cause  to  be  issued,  as  fully  paid  up,  to  each  part- 
ner, or  as  he  directed,  in  proportion  to  his  interest  in  the 
partnership;  and  the  corporation,  continuing  the  business, 
afterwards  becomes  insolvent,  the  transaction  will  be  regarded 
as  a  fraud  upon  the  corporate  creditors,  although  none  was 
intended  or  contemplated  by  the  parties  to  such  transaction. 
In  such  case,  each  partner  will  be  regarded  as  an  original  sub- 
scriber for  so  much  of  the  stock  as  was  thus  issued  to  him  and 

^  Taylor  v.  Cummings  (U.  S.  C.  C.  A.),  127  Fed.  108.  Compare,  however, 
Berry  v.  Rood,  168  Mo.  316,  67  S.  W.  644,  under  Mo.  Const.,  art.  12,  §  8,  and 
Rev.  Stat.,  1899,  §  962. 

8  Merrill  v.  Prescott,  67  Kan.  767,  74  Pac.  250. 

»  Merchants'  &  Mechanics'  Savings  Bank  v.  Belington  Coal  &  Coke  Co., 
51  W.  Va.  60,  41  S.  E.  390. 

489 


§  297      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

credited  on  his  subscription  for  the  actual  value  only  of  his 
interest  in  the  partnership  property  transferred  to  the  corpo- 
ration in  payment  of  such  subscription.  The  balance  left, 
after  applying  this  credit,  will  be  deemed  a  debt  due  from  him 
to  the  corporation,  and  therefore  corporate  assets.^" 

§  297.  Stock  Issued  for  Property — Valueless  Property — 
Material  Overvaluation. 

Although  a  statute  permits  stock  to  be  paid  for  in  property 
still  it  should  not  be  worthless  or  valueless,  and  where  stock- 
holders have  paid  for  their  stock  by  the  transfer  of  property 
of  such  character  they  will  still  be  liable  as  for  unpaid  subscrip- 
tions, upon  an  insolvent  corporation's  debt."  If  an  excessive 
valuation  is  placed  on  property  given  in  payment  for  stock, 
the  shareholders  receiving  such  stock  will  be  held  liable  to 
creditors  to  the  extent  of  the  difference  between  the  face  value 
of  the  stock  and  the  real  value  of  the  property  .^^  Where  a 
State  Constitution  and  statute  so  provide,  if  a  subscription 
for  stock  in  a  corporation  is  made  payable  in  property,  the 
property  must  be  taken  at  its  reasonable  money  value;  and 
though  a  margin  will  be  allowed  for  an  honest  difference  of 
opinion  as  to  its  value,  a  valuation  grossly  excessive,  know- 
ingly made,  while  its  acceptance  may  bind  the  corporation,  is 
a  fraud  on  creditors,  and  they  may  proceed  against  the  stock- 
holders individually  as  for  an  unpaid  subscription.^^  A  person 
who  actively  participated  in  securing  the  organization  of  a 
corporation  with  a  view  of  making  a  sale  of  property  to  it,  and 
who  in  fact  accepted  benefits  in  his  dealings  with  it,  with  full 
knowledge  that  the  stock  subscribed  was  to  be  paid  for  by  a 
conveyance  of  the  property  at  a  grossly  excessive  valuation, 
may  be  estopped  from  disputing  the  validity  of  the  transaction, 

10  Gates  v.  Tippecanoe  Stone  Co.,  57  Ohio  St.  60,  38  Ohio  L.  J.  275,  63 
Am.  St.  Rep.  705,  48  N.  E.  285. 

"  Salt  Lake  Hardware  Co.  v.  Tintic  Mill  Co.,  13  Utah,  423,  45  Pac.  200. 

12  Stout  V.  Hubbell,  104  Iowa,  499,  73  N.  W.  1060. 

13  Elyton  Land  Co.  v.  Birmingham  Warehouse  &  Elevator  Co.,  92  Ala. 
407,  9  So.  129,  12  L.  R.  A.  307,  9  Ry.  &  Corp.  L.  J.  488. 

490 


RIGHTS,    LIABILITIES    AXD    REMEDIES    OF  §  297 

or  proceeding  against  the  stockholders  individually;  but  the 
principle  cannot  be  extended  to  a  vendor,  who,  having  agreed 
to  sell  a  tract  of  land  to  a  corporation  then  being  organized, 
executed  a  bond  to  one  of  the  projectors  as  trustee  for  it,  re- 
citing therein  that  he  had  paid  five  thousand  dollars,  about 
one-tenth  of  the  purchase  money,  that  he  was  to  transfer  it 
to  the  corporation  when  fully  organized,  that  the  corporation 
should  then  execute  its  notes  for  the  balance  of  the  purchase 
money,  and  conditioned  that  a  conveyance  should  be  executed 
to  it  on  payment  of  the  notes;  and  who,  having  obtained  judg- 
ment against  the  corporation  on  the  unpaid  notes,  seeks  to 
enforce  an  individual  liability  against  the  stockholders,  as  for 
an  unpaid  subscription,  because  the  entire  capital  stock  of  the 
corporation,  two  hundred  thousand  dollars,  was  taken  as  sat- 
isfied by  their  conveyance  of  the  land  for  which  only  five 
thousand  dollars  had  been  paid.^'* 

A  purchaser  of  stock  in  a  corporation,  organized  under  the 
Stock  Corporation  Law  of  New  York,  and  the  amendments 
thereto, ^^"^  before  a  certificate  that  the  stock  has  not  been  fully 
paid  is  made  and  recorded,  and  when  the  stock  has  not  been 
fully  paid  for  because  of  overvaluation  of  property  which  had 
been  taken  in  payment  therefor,  is  liable  to  creditors  of  the 
company  for  an  amount  equal  to  the  amount  of  his  stock, 
although  he  bought  the  stock  without  knowing  of  the  over- 
valuation.^^ Again,  a  gross  and  obvious  overvaluation  of 
property  conveyed  to  a  corporation  in  consideration  of  an 
issue  of  stock  at  the  valuation,  is  strong  evidence  of  fraud  in 
an  action  against  a  stockholder  by  a  creditor  to  enforce  per- 
sonal liability  for  his  debt.^' 

So  the  averment  that  incorporators  conveyed  to  the  corpo- 

"  Elyton  Land  Co.  v.  Birmingham  Warehouse  &  Elevator  Co.,  92  Ala. 
407,  12  L.  R.  A.  307,  9  So.  129,  9  Ry.  &  Corp.  L.  J.  488. 

15  Laws,  1848,  chap.  40,  Laws,  1890,  chap.  564,  §  42,  Laws,  1909,  chap.  61, 
§55. 

i«  White,  Corbin  &  Co.  v.  Jones,  167  N.  Y.  158,  60  N.  E.  422,  rev'g  45  App. 
Div.  241,  61  N.  Y.  Siipp.  21. 

17  Coit  V.  Gold  Amalgamating  Co.,  119  U.  S.  343,  30  L.  ed.  420,  7  Sup.  Ct. 
231. 

491 


§  298      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

ration,  in  full  payment  of  one  million,  two  hundred  and  fifty 
thousand  dollars  of  stock,  real  estate  for  which  they  had  just 
paid  ninety  thousand  dollars  shows  the  absence  of  a  bona  fide 
exercise  of  judgment  and  discretion  in  making  the  valuation, 
and  intentional  noncompliance  with  the  requirement  that  the 
property  shall  be  taken  at  its  money  value,  and  is  a  sufficient 
averment  of  fraud.^*  The  valuation  placed  by  stockholders 
upon  property  given  for  stock  does  not  bind  the  court  so  as  to 
relieve  the  stockholders  from  their  liability  for  unpaid  subscrip- 
tions.^® 

The  record  of  incorporation  showing  that  stock  subscrip- 
tions were  paid  by  the  conveyance  of  property  does  not  op- 
erate as  constructive  notice  to  subsequent  creditors  of  the 
corporation  of  the  real  value  of  the  property  received  in  pay- 
ment of  the  subscriptions,  or  that  it  was  grossly  overvalued; 
the  creditor  is  justified  in  presuming  from  the  record,  that  the 
law  requiring  subscription  for  stock  to  be  paid  in  money  or  in 
property  at  its  reasonable  value  had  been  strictly  complied 
with.2o 

§  298.  Stock  Issued  for  Property  Which  Subsequently 
Becomes  Valueless  or  Consideration  Fails. 

A  liability  for  corporate  debts,  upon  the  ground  that  the 
stock  is  not  fully  paid  up,  is  not  created  against  the  officers  and 
stockholders  of  a  corporation  by  the  fact  that  its  stock  has 
been  issued  for  property  and  such  property  has  become  worth- 
less.^^ So  where  a  petition  by  the  receiver  of  an  insolvent  cor- 
poration showed  that  certain  shares  of  stock  of  the  corporation 
had  been  issued  by  it  in  payment  for  property  conveyed  to  it, 
which  conveyance  was  thereafter  judicially  void,  so  that  the 
consideration  for  the  shares  of  stock  issued  in  payment  wholly 
failed,  and  that  the  shares  had  been  transferred  to  various 
persons,  it  was  wdthin  the  court's  discretion  to  grant  leave  to 

18  Lea  V.  Iron  Belt  Mercantile  Co.,  119  Ala.  271,  24  So.  28, 

19  Dunlap  V.  Ranch,  24  Wash.  620,  64  Pac.  807. 

20  Lea  V.  Iron  Belt  Mercantile  Co.,  119  Ala.  271,  24  So.  28. 

21  Giddings  v.  Holter,  19  Mont.  263,  48  Pac.  8. 

492 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF       §§299,300 

file  a  bill  in  behalf  of  the  parties  interested  to  determine  the 
rights  of  such  stockholders.^^ 

§  299.  Judgment  Creditors— Stockholders'  Liability  to, 
for  Unpaid  Stock — Parties. 

Stockholders  of  record  arc  liable  for  unpaid  installments, 
although  in  fact  they  may  have  parted  with  their  stock,  or 
may  have  held  it  for  others;  and  in  the  absence  of  fraud  they 
are  bound  by  a  decree  against  their  corporation.  So  a  creditor 
may  subject  subscriptions  to  a  satisfaction  of  his  judgment 
by  a  bill  in  equity  where  his  legal  remedies  against  a  corpora- 
tion, which  has  not  made  an  assessment,  are  exhausted;  and 
where  subscriptions  to  stock  are  payable  as  called  for,  stock- 
holders cannot  object  when  an  assessment  to  pay  debts  is 
made,  that  the  corporate  duty  in  this  regard  had  not  been 
earlier  discharged. ^^  A  judgment  creditor  cannot  proceed  by 
a  bill  for  himself  alone  to  require  stockholders  to  pay  in  their 
unpaid  installments  for  stock  as  required  by  statute,  but  the 
proceeding  must  be  by  a  bill  in  behalf  of  all  the  other  creditors 
of  the  company  as  well  as  of  himself  .^^ 

§  300.  Amount  of  Creditors'  Recovery  on  Stock  May  Be 
Limited  by  His  Knowledge  of  Agreement  Under  Which 
Shares  Issued. 

A  creditor  is  bound  by  his  knowledge  of  the  amount,  though 
less  than  the  par  value,  upon  the  payment  of  which  shares 
were  to  be  considered  as  paid  up,  and  he  is,  therefore,  limited 
in  his  recovery  against  stockholders  upon  their  subscription 
liability  to  the  sum  so  agreed  upon.^^ 

22  McMaster  v.  Drew,  70  N.  J.  Eq.  6,  62  Atl.  559.  "  It  does  not  admit  of 
doubt  but  that  such  a  bill  could  have  been  filed  by  the  corporation  but  for  the 
fact  that  it  had  become  insolvent.  By  reason  of  its  insolvency,  no  proceeding 
involving  this  matter  could  be  taken  by  anyone  except  the  receiver,  and  by 
liim  only  by  leave  of  court."    Id.  7,  per  Magie,  Chancellor. 

23  Hawkins  v.  Glenn,  131  U.  S.  319,  33  L.  ed.  1S4,  9  Sup.  Ct.  739. 

As  to  unpaid  svbscriptions  see  also  Hambleton  v.  Glenn,  85  Va.  991,  13 
Va.  L.  J.  242,  9  S.  E.  129. 

24  Bickley  v.  Schlag,  46  N.  J.  Eq.  533,  8  Ry.  &  Corp.  L.  J.  290,  20  Atl.  250, 
31  Am.  &  Eng.  Corp.  Cas.  523. 

25  Miller  v.  Higginbotham,  29  Ky.  L.  Rep.  547,  93  S.  W.  655. 

493 


§30i        I'AKTIES  CONTINUED — CREDITOR.S — STOCKHOLDERS — 

§301.  Creditor  or  Stockholder  May  Sue  After  Demand 
Upon  and  Refusal  of  Corporate  Authorities  to  Act — Stock- 
holder May  Defend. 

Although  the  corporation  itself  should  bring  a  suit  at  law 
against  its  ofl&cers  or  directors  for  neglect  and  mismanage- 
ment whereby  loss  is  sustained  by  the  corporation,  never- 
theless an  action  may  be  maintained  in  a  court  of  equity  by 
creditors  or  shareholders  in  case  the  corporation  wrongfully 
refuses  or  is  disabled  to  bring  suit,  provided  proper  demand 
so  to  do  is  made.^^  And  where  proper  demand  is  made  upon 
the  corporate  authorities  to  protect  rights  of  or  to  redress  wrongs 
against  the  corporation  and  they  fail  to  act,  a  stockholder  may 
file  a  bill  on  behalf  of  the  corporation.^'' 

So  a  stockholder  in  a  corporation  may  sue  both  at  law  and 
in  equity  in  his  own  name  in  behalf  of  its  interest  and  to  vin- 
dicate a  wrong  done  to  it,  when  the  latter  cannot  or  will  not 
do  so  in  its  corporate  capacity;  and  under  like  circumstances 
a  stockholder  may  defend  in  his  own  name  an  action  brought 
against  a  corporation.^*    A  stockholder  may  also  sue  in  equity 

28  Wallace  v.  Lincoln  Savings  Bank,  89  Tenn.  6.30,  15  S.  W.  448,  9  Ry.  & 
Corp.  L.  J.  482,  13  Am.  &  Eng.  Corp.  Cas.  253,  4  Bkg.  L.  J.  249. 

See  also  the  following  cases: 

Maine:  Wells  v.  Dane,  101  Me.  67,  63  Atl.  324  (may  sue  when  proper 
officers  unable  or  unwilling) . 

Michigan:  Starr  v.  Shepard,  145  Mich.  302,  108  N.  W.  709,  13  Detroit  Leg. 
N.  528  (may  sue  after  request  and  neglect  of  authorities  to  act) . 

Missouri:  Exter  v.  Sawyer,  146  Mo.  302,  47  S.  W.  951  (may  sue  after  re- 
quest and  failure  to  act) . 

Nebraska:  State  v.  Holmes,  60  Neb.  39,  82  N.  W.  109  (may  sue;  neglect 
and  refusal  to  protect  property). 

New  Jersey:  Groel  v.  United  Electric  Co.,  70  N.  J.  Eq.  616,  61  Atl.  1061 
(may  sue ;  after  neglect  or  refusal) . 

South  Dakota:  Whitney  v.  Hazard,  18  S.  Dak.  490,  101  N.  W.  346  (may 
sue;  after  neglect  or  refusal). 

Tennessee:  Knapp  v.  Golden  Cross  Soc,  121  Tenn.  212,  118  S.  W.  390 
(may  sue ;  after  demand  and  refusal) . 

Texas:  People's  Inv.  Co.  v.  Crawford  (Tex.  Civ.  App.,  1898),  45  S.  W.  738 
(may  sue  after  refusal) . 

27  Foster  v.  Mansfield,  Coldwater  &  Lake  Michigan  R.  Co.  (U.  S.  C.  C), 
36  Fed.  627,  case  aff'd  in  146  U.  S.  88,  36  L.  ed.  899,  13  Sup.  Ct.  28. 

2s  Morrill  v.  Little  Falls  Manufacturing  Co.,  46  Minn.  260,  48  N.  W.  1124, 
10  Ry.  &  Corp.  L.  J.  133.    The  rules  by  which  a  stockholder's  right  to  defend 

494 


RIGHTS,    LlAiilLlTlES    AND    KEMEDIES    OF  §  301 

for  himself,  the  corporation,  and  other  stockholders  where  the 
proper  corporate  authorities  are  unwilling  or  unable  to  proceed 
with  the  measures  necessary  to  protect  the  interests  and  prop- 
erty of  the  corporation.^*^ 

Again,  in  case  of  a  wrong  to  a  corporation,  remediable  only 
by  judicial  interference,  and  the  persons  possessing  the  pri- 
mary right  or  its  officers  to  move  in  that  regard  fail  upon  de- 
mand being  made  by  a  stockholder  to  do  so,  or  without  such 
demand  in  case  the  circumstances  are  such  as  to  indicate  that 
the  same  would  be  useless,  any  stockholder  may  sue  on  be- 
half of  all  the  stockholders  to  protect  the  corporate  rights, 
making  the  wrongdoer  and  the  corporation  parties  defendant. 
But  whether  or  not  a  case  falls  within  the  principle  stated 
must  be  determined  by  its  own  peculiar  facts.  The  trial  court 
has  considerable  discretion  in  the  matter;  and  its  determina- 
tion that  a  suit  is  proper,  within  the  principles  justifying  its 
equitable  jurisdiction,  will  not  be  reversed  on  appeal  unless 
it  clearly  appears  to  be  erroneous.  Thus,  in  a  stockholder's 
action  against  the  corporation  and  its  president  to  vindicate 
the  corporation's  right  to  real  estate,  the  complaint  alleged 
that  there  had  been  no  meeting  of  the  stockholders  or  of  the 
directors  for  many  years;  that  the  directors  had  not  for  a  long 
time  paid  any  attention  to  the  corporate  affairs;  that  they 
left  the  president  in  full  control;  that  the  secretary,  a  large 
stockholder,  had  full  knowledge  of  the  president's  misdeeds, 

in  behalf  of  a  corporation  considered  and  applied  in  an  action  brought  by  a 
plaintiff  against  a  corporation  of  which  he  claims  to  be  a  president,  and  has 
caused  the  summons  upon  it  to  be  served  upon  himself  as  such  president  and 
upon  another  person  as  its  secretary,  and  where,  after  the  corporation  is  in 
default  for  want  of  answer,  stockholders,  also  made  defendants  in  such  ac- 
tion, but  not  served  with  the  summons  until  long  after  the  corporation  has 
defaulted,  make  application  to  defend  in  its  behalf,  their  proposed  answer 
disclosing  a  meritorious  defense  on  the  part  of  the  corporation,  and  also 
alleging  that  the  plaintiff  is  not  the  president,  and  that  the  person  whom  he 
has  recognized  as  secretary  is  not  the  secretary  of  the  corporation.  In  the 
consideration  of  such  an  application,  and  as  against  the  plaintiff  at  least,  the 
court  must  treat  the  corporation  as  having  been  duly  served  with  the  sum- 
mons, and  as  in  default  for  want  of  answer,  through  the  inexcusable  neglect 
of  its  officers. 
29  Wells  V.  Dane,  101  Me.  67,  63  Atl.  324. 

495 


§  oOl      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

acquiesced  therein,  and  was  so  hostile  to  stockholders  like 
plaintiff  that  he  suppressed  information  of  the  names  of  other 
officers  of  the  corporation;  that  the  president  suffered  and 
procured  real  estate  of  the  corporation  to  be  sold  for  taxes, 
and  by  mesne  conveyances  acquired  the  tax  titles  for  himself; 
that  a  request  on  the  corporation  to  bring  an  action  to  redress 
the  wrong  would  warn  the  president  and  stimulate  him  to 
pass  the  wrongfully  acquired  titles  to  innocent  parties;  that  a 
request  was  made  on  the  secretary  to  have  an  action  brought 
in  the  name  of  the  corporation,  which  was  refused.  It  was 
held  that  the  trial  court,  in  overruling  a  demurrer  to  the  com- 
plaint, had  reasonable  grounds  to  conclude  that  efficient  de- 
mand on  the  corporation  to  bring  an  action  was  impracticable, 
if  not  impossible.^''  A  communication  to  the  president  of  a 
corporation  presenting  the  matters  complained  of  and  re- 
questing action  by  the  directors  has  been  held  sufficient  to 
enable  stockholders  to  sue  in  their  own  names  to  obtain  the 
relief  so  demanded  and  refused .^^ 

A  request  to  the  managing  officers  of  a  corporation  to  in- 
stitute an  action  to  set  aside  and  cancel  a  fraudulent  issue  of 
corporate  stock,  and  their  refusal,  is  all  that  is  necessary  to 
enable  an  individual  stockholder  to  maintain  the  suit.  It  is 
not  necessary  that  he  go  further,  and  request  other  stock- 
holders to  commence  the  action. ^^  One  or  more  stockholders 
may  sue  in  equity,  in  behalf  of  himself  or  themselves  and  other 
stockholders  to  have  a  merger  and  union  of  two  corporations 
declared  ultra  vires  and  void  and  to  enjoin  such  unlawful  acts; 
and  such  suit  may  be  maintained  against  the  corporation  and 
those  participating  in  the  alleged  wrongful  acts,  where  demand 
has  first  been  made  upon  the  corporate  authorities  to  institute 
the  suit  and  they  have  refused.  The  court,  per  Shields,  J., 
said:  "It  is  well  settled  that  courts  of  equity  have  jurisdiction 
to  define  and  determine  the  extent  and  limitations  of  the 
powers  of  corporations,   and  to  declare  contracts,   or  other 

30  Donnelly  v.  Sampson,  135  Wis.  368,  115  N.  W.  1089. 

31  Ball  V.  Rutland  Rd.  Co.  (U.  S.  C.  C),  93  Fed.  513. 

32  Shaw  V.  Staight,  107  Minn.  152,  20  L.  R.  A.  1077,  119  N.  W.  951. 

496 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF  §  302 

corporate  action,  made  or  threatened  by  the  corporation  or 
its  officers,  in  excess  and  violation  of  those  powers,  invahd, 
and  to  restrain  and  prohibit  the  performance  of  them.  The 
right  of  stockholders  in  proper  cases  to  maintain  suits  for 
these  }mrposes  is  also  well  settled. ^^  If  corporation  directors 
are  chargeable  with  misconduct  in  their  office  and  the  corpo- 
ration is  disabled  to  sue  at  law  or  it  neglects  through  fraud  or 
collusion  to  seek  redress,  an  individual  stockholder  may  main- 
tain a  suit  in  equity  against  such  directors  where  they  have 
been  requested  to  permit  suit  to  be  brought  by  the  stockholder 
in  the  corporate  name  and  they  have  refused  to  do  so.^"* 

§  302.  When  Demand  Upon  Corporate  Authorities  and 
Their  Refusal  a  Condition  Precedent  to  Suit. 

Where  the  cause  of  action  belongs  to  the  corporate  entity 
it  is  only  where  the  corporation,  either  actually  or  virtually, 
refuses  to  institute  or  defend  an  action  that  one  or  all  the 
stockholders  can  appear  in  its  behalf .^^  In  order  to  enable 
creditors  or  shareholders  of  a  corporation,  which  is  not  disabled 
from  suing  but  is  a  going  concern,  to  sue  in  equity,  a  demand 
should  be  made  upon  the  directors  in  office  and  not  on  the 
president  alone;  and  where,  after  a  demand  upon  the  presi- 
dent to  bring  suit,  no  request  has  been  preferred  to  the  di- 

33  Knapp  V.  Golden  Cross,  121  Tenn.  212,  118  S.  W.  390. 

34  Allen  V.  Curtis,  26  Conn.  456. 

35  Miller  v.  Murphy,  17  Colo.  408,  30  Pac.  46. 

That  demand  and  refusal  conditions  precedent  unless  demand  useless,  see 
the  following  cases : 

Alabama:  Crow  v.  P'lorence  Ice  &  Coal  Co.,  143  Ala.  541,  39  So.  401. 

Georgia:  Cornell  v.  Sims,  111  Ga.  828,  36  S.  E.  627. 

Illinois:  Perry  County  v.  Stebbins,  66  111.  App.  427. 

Indiana:  Wright  v.  Floyd  (Ind.  App.,  1909),  86  N.  E.  971 ;  Supreme  Sitting 
of  Order  of  Iron  Hall  v.  Baker,  1.34  Ind.  293,  33  N.  W.  1128,  20  L.  R.  A.  210. 

Iowa:  Troutman  v.  Council  Bluffs  St.  Fair  &  Carnival  Co.  (Iowa,  1909), 
120  N.  W.  730. 

Massachusetts:  Dumphy  v.  Traveler  Newspaper  Assoc,  146  Mass.  495, 
16  N.  E.  426. 

Pennsylvania:  Wolf  v.  Pennsylvania  Rd.  Co.,  195  Pa.  St.  91,  45  Atl.  436. 

Virginia:  Virginia  Passenger  &  Power  Co.  v.  Fisher,  104  Va.  121,  51  S.  E. 
198. 

West  Virginia:  Ward  v.  Hotel  Randolph  Co.  (W.  Va.,  1909),  63  S.  E.  613. 

32  497 


§  .'302      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

rectors,  and  they  have  never  decHned  to  .sue,  the  failure  to 
prefer  such  request  would  ordinarily  be  fatal.^ 

Stockholders  must  first  apply  to  the  corporate  authorities 
before  a  court  of  equity  will  entertain  a  bill  by  them  to  remedy 
corporate  wrongs  committed  by  officers  of  the  corjooration.^^ 
A  stockholder  or  a  majority  of  the  stockholders  cannot  come 
into  equity  to  restrain  the  action  of  the  directors  whethei- 
de  jure  or  de  facto  in  a  matter  not  ultra  vires  unless  the  corpo- 
ration itself  refuses  to  act,  or  is  incapable  of  seeking  adequate 
redress.^*  A  stockholder  in  a  private  corporation,  or  a  minor- 
ity of  the  stockholders,  cannot  maintain  a  bill  in  equity  to 
prevent  illegal  action  on  the  part  of  the  majority,  without  a 
previous  request  to  the  proj^er  officers  to  interfere,  and  their 
failure  or  refusal  to  do  so;  unless  facts  are  stated  which  show 
that  such  request  would  be  unavailing  and  useless  .^^ 

A  stockholder's  action  to  set  aside  a  contract  made  by  his 
corporation  upon  the  ground  that  it  was  unconscionable  does 
not  lie  where  he  made  no  demand  that  the  corporation  bring 
the  action  and  the  corporation,  made  defendant,  also  alleges 
the  invalidity  of  the  contract.  And  a  failure  to  make  a  de- 
mand that  the  corporation  sue  is  not  excused  by  alleging  that 
the  majority  of  the  directors  who  authorized  the  contract  are 
still  in  office,  if  there  be  no  charge  that  they  were  guilty  of 
wrongdoing.^''  Again,  where  it  does  not  appear  that  any  de- 
mand was  made  upon  the  directors  to  defend  a  mortgage  fore- 
closure suit  against  the  corporation  or  that  there  was  any  re- 
fusal to  defend  it,  minority  stockholders  owning  only  a  small 
amount  of  the  stock  cannot  maintain  a  suit  in  equity  to  re- 
strain the  foreclosure  where,  as  the  basis  for  the  injunction 

36  Wallace  v.  Lincoln  Savings  Bank,  89  Tenn.  6.30,  1.5  .S.  W.  448,  9  Ry.  & 
Corp.  L.  J.  482,  1.3  Am.  &  Eng.  Corp.  Cas.  25.3,  4  Bkg.  L.  J.  249. 

37  Boyd  V.  Sims,  87  Tex.  771,  11  S.  W.  948;  Rathbone  v.  Parkersburg 
Gas  Co.,  31  W.  Va.  798,  8  S.  E.  570;  Taylor  v.  Holmes,  127  U.  S.  489,  ,32 
L.  ed.  179,  8  Sup.  Ct.  1192. 

38  Moses  V.  Tompkins,  84  Ala.  613,  4  So.  763. 

39  Mack  V.  De  Bardeleben  Coal  &  Iron  Co..  90  Ala.  396,  8  So.  150,  9  L. 
R.  R.  650,  8  Ry.  &  Corp.  L.  J.  .394,  31  Am.  &  Eng.  Corp.  Cas.  389. 

«  McCoy  V.  Gas  Engine  &  Power  Co.,  135  App.  Div.  (N.  Y.)  771. 

498 


RIGHTS,    LIAUILITIES    AXD    KK.MKDIKS    OF  §  303 

bill,  there  is  only  a  claim  of  coUusicju  between  the  complain- 
ants in  the  foreclosure  suit  and  the  officials.'*' 

A  stockholder  in  a  building  and  loan  association  com[)lain- 
ing  of  undue  advantage  given  by  the  association  to  holders  of 
paid-up  stock,  cannot  maintain  a  bill  in  ecjuity  against  the 
corporation  to  redress  the  alleged  corporate  wrongs,  until  he 
has  done  all  things  in  his  power  to  obtain,  within  the  corpo- 
ration, redress  for  the  wrongs  complained  of;  and  a  bill  filed 
for  such  purpose  which  fails  to  allege  an  effort  on  the  (complain- 
ant's part  to  have  the  wrongs  redressed  within  the  corpora- 
tion, or  else  which  shows  a  satisfactory  reason  for  its  failure 
to  do  so,  cannot  be  maintained  and  is  subject  to  demurrer.''^ 

§  303.  When  Demand  Upon  and  Refusal  of  Corporate 
Authorities  Not  a  Condition  Precedent  to  Suit. 

A  demand  may  be  dispensed  with  in  the  State  Courts  under 
certain  circumstances,  as  where  the  corporate  management  is 
under  control  of  the  guilty  parties.'*^  So  it  is  not  necessary  to 
make  a  demand  upon  either  the  corporation  or  its  directors  in 
order  to  enable  a  stockholder  to  sue  to  restrain  its  directors 
from  misappropriating  the  moneys  of  the  corporation  where 
the  persons  chargeable  with  the  wrongful  acts  are  those  upon 
whom  the  demand  must  be  made."*^  And  when  directors  or 
officers  of  a  corporation  are  charged  with  mismanagement  of 
the  corporate  property  a  stockholder  may  be  permitted  to 
sue  in  his  own  name  when  it  is  apparent  that  an  application 
for  redress  through  corporate  action  would  be  useless."*^    So 

«  Alexander  v.  Searey,  81  Ga.  536,  8  S.  E.  630. 

*2  Johnson  v.  National  Building  &  Loan  Assoc,  125  Ala.  465,  28  So.  2. 

«  Miller  v.  Murphy,  17  Colo.  408,  30  Pac.  46.  See  also  Sigwald  v.  City 
Bank,  82  S.  C.  382,  385,  64  S.  E.  .398. 

Demand  unnecessary  when  corporation  cannot  sue.  Stebbins  v.  Perry 
County,  167  111.  567,  47  N.  E.  1048. 

Demand  unnecessary  when  there  is  no  projXT  authority  upon  whom  to 
make  demand  and  it  would  be  unavailing.  Sheridan  Brick  Works  v.  Marion 
Trust  Co.,  157  Ind.  292,  61  N.  E.  666,  87  Am.  St.  Rep.  207. 

Refusal,  rvhen  insufficient,  see  Hendrickson  v.  Bradley  (U.  S.  C.  C.  A.), 
85  Fed.  508,  29  C.  C.  A.  .303. 

«  Wickersham  v.  Crittenden,  93  Cal.  17,  28  Pac.  788. 

«  Sigwald  V.  City  Bank,  82  S.  C.  382,  385,  64  S.  E.  398. 

491) 


§  oOo       PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

where  a  corporation  is  exclusively  under  the  control  of  its 
directors  and  officers  whose  acts  and  management  are  cjues- 
tioned.  and  a  demand  by  a  stockholder  that  the  corporation 
bring  an  action  against  the  officers  would  be  idle  and  fruitless, 
equity  permits  the  stockholder  to  bring  the  action  in  his  own 
name.^  A  stockholder  may  also  sue  in  ecjuity  in  his  own  name 
to  enforce  a  right  of  the  corporation,  without  first  requesting 
the  directors  to  sue,  when  it  is  made  to  appear  that  if  such  re- 
quest had  been  made  it  would  have  been  refused,  or,  if  granted, 
that  the  litigation  following  would  necessarily  be  subject  to 
the  control  of  persons  opposed  to  its  success.  Thus,  where 
directors  of  a  corporation  are  themselves  the  wrongdoers,  or 
the  partisans  of  the  wrongdoer,  they  are  incapacitated  from 
acting  as  the  representatives  of  the  corporation  in  any  liti- 
gation which  may  be  instituted  for  the  correction  of  the  wrong 
which  it  is  alleged  they  have  committed  or  approved."*^  And  it 
would  evidently  be  useless  for  a  stockholder  to  apply  for  re- 
dress through  corporate  action  where  the  corporation  is  in  the 
hands  of  a  receiver  and  no  application  could  successfully  be 
made  at  a  meeting  of  the  stockholders  or  before  the  board  of 
directors  charged  with  mismanagement,  where  the  receiver  is 
one  of  the  parties  charged  with  the  wrongdoing,  as  in  such 
case  he  would  not  and  could  not  sue  himself.'*^    Again,  a  de- 

*6  Lawrence  v.  Weber,  65  Misc.  (N.  Y.)  603. 

47  Knoop  V.  Bohmrich,  49  N.  J.  Eq.  82,  23  Atl.  118,  36  Am.  &  Eng.  Corp. 
Cas.  315. 

48  Sigwald  V.  City  Bank,  82  S.  C.  382,  385,  64  S.  E.  398.  The  court,  per 
Jones,  J.,  said:  "The  case  is  much  like  Brinckenhoff  v.  Bostwick,  88  N.  Y. 
52,  wherein  demurrer  was  overruled.  Appellants  contend,  plaintiff's  only- 
remedy  was  to  have  the  receiver  removed  and  a  new  one  appointed  who 
could  be  directed  by  the  court  to  conduct  the  litigation.  But  the  present 
suit  is  before  the  court  which  appointed  the  receiver  and  the  court  may  not 
care,  at  this  juncture,  to  remove  the  receiver,  as  no  charges  are  made  against 
him  as  such,  and  may  consider  that  the  ends  of  justice  would  as  well  be  met 
by  permitting  the  present  action  to  continue  with  the  receiver  as  a  party 
defendant. 

"  Judge  Gage  was  of  the  opinion  that  such  leave  to  maintain  the  action 
should  now  be  given  to  plaintiff,  and  we  see  no  want  of  power  or  impropriety 
in  such  determination,  if  the  absence  of  previous  leave  is  a  mere  irregu- 
larity and  not  jvu'isdictional. 

"  It  will  be  observed  that  th6  suit  is  practically  against  the  directors  and 

500 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF  §  304 

mand  and  i-efvisal  upon  the  corporate  authorities  is  luniecessary 
to  enable  a  stockholder  to  maintain  an  action  in  equity  for 
relief  where  a  contract  is  wrongfully  taken  by  the  corporation's 
president  in  his. own  name  instead  of  in  the  company's  name 
and  said  stockholder,  who  was  a  director  and  owned  one-half 
the  stock,  had  no  notice  of  the  meeting  at  which  it  was  alleged 
the  board  of  directors  approved  such  action  and  was  not  con- 
sulted in  the  matter  of  approving  the  same.'*'*  So  a  stock- 
holder may  sue  to  restrain  the  unlawful  transfer  of  corporate 
stock  by  the  directors  to  a  consolidated  corporation;  nor  is  it 
necessary  to  consult  the  directors  in  such  case.^° 

§  304.  Effect  of  Demand  and  Refusal  Dependent  Upon 
Circumstances — Discretion  of  Directors — Simulated  De- 
mand. 

It  is  plain  that  the  question  of  the  right  of  a  stockholder  to 
obtain  redress  and  the  necessity  of  a  demand  upon  and  re- 
fusal of  the  corporate  authorities  as  a  condition  precedent 
must  rest  upon  and  be  decided  with  reference  to  the  facts  in 
each  particular  case.^^  And  it  does  not  follow  that  the  mere 
refusal  of  a  corporation  to  sue  will  authorize  a  stockliolder  who 
is  dissatisfied  therewith  to  bring  suit,  as  a  very  wide  discretion 
is  reposed  in  the  directors,  and  it  is  not  the  duty  of  managers 
of  such  corporations  to  bring  suit  upon  every  request  based 
upon  alleged  wrong  or  injury;  and  if  the  refusal  be  in  good 
faith  the  courts  will  rarely  entertain  a  shareholder's  suit  for 
the  same  cause  of  action  and  so  override  the  refusal.  To  jus- 
tify the  suit  the  refusal  must  have  been  wrongful ;  ^^  an  honest 

is  not  to  enforce  any  liability  of  the  receiver  as  such.  It  is  not  intended  to 
recover  or  affect  assets  in  the  control  of  the  court,  but  to  augment  the  assets 
for  distribution.  Such  consideration  might  well  have  moved  the  court  to 
hold  that  leave  to  bring  the  action  was  unnecessary,  if  the  stockholders' 
right  to  sue  was  complete  on  the  other  ground  mentioned." 

49  Davis  V.  Gemmel,  70  Md.  356,  17  Atl.  259,  5  Rd.  &  Corp.  L.  J.  447. 

50  Butts  V.  Simpsonville  &  B.  C.  Turnp.  Co.,  10  Ky.  L.  Rep.  669,  10  S.  W. 
134,  2  L.  R.  A.  594. 

51  Elliott  V.  Puget  Sound  Wood  Products  Co.,  52  Wash.  637,  641,  101 
Pac.  228. 

52  Wallace  v.  Lincoln  Savings  Bank,  89  Tenn.  630,  15  S.  W.  448,  9  Ry.  & 
Corp.  L.  J.  482,  13  Am.  &  Eng.  Corp.  Cas.  253,  4  Bkg.  L.  J.  249. 


§  305      PARTIES  CONTINUED CREDITORS — STOCKHOLDERS — 

and  fair  refusal  precludes  suit.^^  So  where  the  request  on  the 
directors  to  sue  in  the  corporation's  name  is  simulated  and 
does  not  express  the  actual  nature  of  the  action  intended  to  be 
brought  the  stockliolders  will  be  denied  the  relief  sought,  such 
as  the  appointment  of  a  receiver,  an  accounting,  the  rescission 
of  an  assessment  and  an  injunction  to  restrain  the  sale  of  stock 
to  pay  the  assessment.^'*  It  is  held  that  the  question  of  liti- 
gation is  not  one  for  the  managers  to  determine  and  that  the 
knowledge  or  consent  of  the  directors  is  necessary,  otherwise 
the  suit  will  be  dismissed  when  relief  in  equity  is  sought  by 
the  secretary  of  a  corporation  in  its  behalf  .^^ 

§  305,  Demand  Upon  and  Refusal  of  Corporate  Au- 
thorities— Necessity  of  Alleging  and  Showing  Same. 

A  stockholder  in  a  corporation  which  has  passed  the  term  of 
its  corporate  existence,  and  has  long  ceased  to  exercise  its 
corporate  franchises,  who  desires  to  obtain  equitable  relief  for 
it,  must  in  order  to  maintain  an  action  therefor  in  his  own 
name,  show  that  he  has  endeavored  in  vain  to  secure  action 
on  the  part  of  the  directors,  if  there  be  any,  or  to  have  the 
stockholders  elect  a  new  board  of  directors,  and  must  disclose 
when  he  acquired  his  interest  in  the  corporation.^^  And  where 
a  stockholder  of  a  corporation  in  order  to  protect  its  rights  and 

53  Kessler  v.  Ensley  Co.  (U.  S.  C.  C),  123  Fed.  546. 

54  Bacon  v.  Irvine,  70  Cal.  221,  11  Pac.  646. 

55  Weir  Furnace  Co.  v.  Aushutz-Bradberry  Co.,  10  Pa.  Dist.  Rep.  81,  31 
Pitts.  Leg.  J.  (N.  S.)  200. 

58  Taylor  v.  Holmes,  127  U.  S.  489,  8  Sup.  Ct.  1192,  32  L.  ed.  179. 

See  also  the  following  cases: 

United  States:  Hawes  v.  Oakland,  104  U.  S.  450,  26  L.  ed.  827  (must  ap- 
pear that  complainant  made  an  earnest  effort  to  obtain  redress  at  the  hands 
of  the  directors  and  shareholders  of  the  corporation  and  that  the  ownership 
of  the  stock  was  vested  in  him  at  the  time  of  the  transactions  of  which  he 
complains  or  was  thereafter  transferred  to  him  by  operation  of  law);  Sav- 
ings &  Trust  Co.  of  Cleveland  v.  Bear  Valley  Irrig.  Co.  (U.  S.  C.  C),  112  Fed. 
693. 

Colorado:  Miller  v.  Murphy,  17  Colo.  408,  30  Pac.  46  (or  that  stockholder 
cannot  obtain  redress  either  through  the  managing  body,  or  the  stockholders, 
or  that  effort  to  do  so  would  be  unavailing) ;  Smith  v.  Bulkley,  18  Colo.  App. 
227,  70  Pac.  958  (must  show  collusion  or  refusal). 

502 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF  §  305 

property  agaiiLst  the  threatened  action  of  a  thu-d  party,  filed 
his  bill  against  the  latter  and  the  corporation,  alleging,  inter 
alia,  that  the  directors,  although  thereunto  requested,  had 
neglected  and  refused  to  institute  proceedings,  it  was  held, 
that  he  must  show  a  clear  case  of  such  absolute  and  unjusti- 
fiable neglect  and  refusal  of  the  directors  to  act  as  would  lead 
to  his  irreparable  injury  should  he  not  be  permitted  to  bring 
suit.'^'  So  it  must  be  shown  by  a  stockholder,  who,  in  his  own 
behalf,  seeks  an  accounting  and  equitable  relief  generally,  that 
he  has  earnestly  endeavored  to  induce  the  managers,  or  the 
body  of  stockholders  to  take  some  remedial  action;  and  the 
details  of  his  efforts  must  also  be  shown.^* 

In  Alabama  where  a  bill  is  filed  by  a  stockholder  of  a  corpo- 
ration, to  have  redressed  alleged  corporate  wrongs,  without 
having  made  a  request  of  the  managing  body  of  the  defendant 
corporation  to  have  corrected  the  grievances  complained  of, 
the  complainant  must  aver  in  his  bill  the  facts  constituting  his 
excuse  for  not  making  such  request  with  particularity  and 
definiteness;  the  averment  of  conclusions  will  not  suffice,  but 
the  facts  upon  which  these  conclusions  are  based  must  be 
averred.  And  before  a  stockholder  can  maintain  a  suit  in  his 
own  name  against  a  corporation  of  which  he  is  a  member, 
to  redress  alleged  corporate  wrongs,  he  must  show  to  the  sat- 
isfaction of  the  court  that  he  has  done  all  in  his  power  to  ob- 
tain, within  the  corporation  itself,  the  redress  of  the  wrongs 
complained  of;  that  he  has  made  an  honest  effort  to  get  the 
governing  body  of  the  corporation  to  remedy  the  wrong,  and, 

Connecticut:  Allen  v.  Curtis,  26  Conn.  456  (or  that  request  has  been  made 
and  refused). 

Indiana:  Wright  v.  Floyd  (Ind.  App.,  1909),  86  N.  E.  971. 

Kansas:  Home  Min.  Co.  v.  McKibben,  60  Kan.  387,  56  Pac.  756  (must 
show  wrongful  or  fraudulent  neglect  of  interests). 

Kentucky:  Pittsburg,  C.  C.  &  St.  L.  Ry.  Co.  v.  Dodd,  115  Ky.  176,  24  Ky. 
L.  Rep.  2057,  72  S.  W.  822  (what  showing  of  facts  as  to  request  and  refusal 
sufficient). 

Missouri:  Loomis  v.  Missouri  Pac.  Ry.  Co.,  165  Mo.  469,  65  S.  W.  962 
(what  is  not  a  sufficient  showing). 

57  Detroit  v.  Dean,  106  U.  S.  537,  27  L.  ed.  300,  1  Sup.  Ct.  482,  560. 

5s  Robinson  v.  West  Virginia  Loan  Co.  (U.  S.  C.  C),  90  Fed.  770. 

50.3 


§  3()G       PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

failing  with  them,  he  then  appHed  to  the  stockholders  as  a 
body  to  take  action  towards  redressing  the  grievances  com- 
plained of.^^  So  under  another  decision  in  the  same  State  a 
bill  filed  against  a  corporation  must  show  that  apphcation  was 
first  made  to  the  board  of  directors  or  to  the  stockholders  to  re- 
dress the  wrongs  complained  or  for  authority  to  prosecute  the 
suit,  or  facts  showing  that  it  could  not  be  done,  or  that  it  was 
not  reasonable  to  require  it,  or  that  it  would  be  unavailing.^" 
If  a  bill  in  equity  by  a  stockholder  against  the  corporation 
shows  that  a  majority  of  the  directors  are  also  stockholders 
and  directors  of  a  rival  corporation,  which  has  bought  up  a 
majority  of  the  stock  of  the  defendant  corporation,  and  are 
using  their  voting  power  in  the  interest  of  said  rival  corporo- 
tion,  to  the  detriment  of  the  other,  this  dispenses  with  the  ne- 
cessity of  a  previous  request  for  action  by  the  directors;  but 
if  it  shows  that,  of  seven  directors,  only  three  have  been  elected 
by  the  voting  power  of  the  rival  corporation,  an  averment  that 
one  of  the  four  old  directors  in  fact  has  no  interest  in  either 
corporation,  but  holds  his  stock  and  votes  in  the  interest  and 
at  the  direction  of  the  president  of  the  rival  corporation,  does 
not  dispense  with  the  necessity  for  such  previous  request.^^ 

§  306.  Same  Subject. 

It  is  held  in  Georgia  that  as  a  general  proposition,  stock- 
holders in  a  corporation  cannot  in  their  own  names  institute 
an  action  against  it,  nor  defend  one  brought  against  it,  until 
a  request  from  them  to  the  directors  to  institute  or  defend  such 
action  has  been  made  and  refused,  which  fact  must  be  alleged 
in  either  instance.  Such  allegation,  however,  may  be  omitted 
when  the  corporate  management  is  under  the  control  of  par- 
ties who,  it  is  alleged,  are  guilty  of  fraud  or  collusive  conduct 
in  refusing  to  bring  or  to  defend  the  suit  which  such  stock- 

59  Decatur  Mineral  Land  Co.  v.  Palm,  113  Ala.  531,  21  So.  315,  59  Am.  St. 
Rep.  140. 

ao  Roman  v.  Woolfolk,  98  Ala.  219,  13  So.  212. 

61  Mack  V.  De  Bardeleben  Coal  &  Iron  Co.,  90  Ala.  396,  8  So.  150,  9  L.  R. 
A.  G50,  8  Ry.  &  Corp.  I..  J.  394,  31  Am.  &  Eng.  Corp  Cas.  389. 

504 


RIGHTS,     LIABILITIES    AXD    REMEDIES    OF  §  306 

holders  desire  shall  be  histituted  or  defended,  iiiit  in  neither 
of  these  events  can  the  stockholders  institute  or  defend  an  ac- 
tion in  the  name  of  the  corporation.  On  the  contrary,  the  cor- 
poration must  be  a  party  defendant  to  the  action,  and  sufficient 
allegations  of  the  failure  of  the  corporate  authorities  to  take 
action  be  made,  to  authorize  the  stockholders  to  intervene  in 
their  own  name.^^ 

It  is  also  decided  in  Kentucky  that  it  is  well  settled  that  an 
action  to  recover  corporate  property  must  be  brought  in  the 
name  of  the  corporation,  and  that  such  an  action  cannot  be 
maintained  by  one  or  more  stockholders  unless  it  should  be 
shown  that  the  corporation  or  its  directors  declined  to  bring 
the  action,  and  that  the  interests  of  the  stockholders  make  it 
necessary  that  one  should  be  instituted.  When  this  state  of 
case  is  presented,  an  action  to  recover  corporate  property  or  to 
protect  the  interests  of  the  corporation,  may  be  brought  by 
the  stockholders.^^ 

Under  a  New  York  decision  an  averment  of  a  demand  made 
upon  a  corporation  to  sue,  and  its  refusal  or  unreasonable  neg- 
lect so  to  do,  is  essential  to  enable  the  plaintiff  stockholder  to 
sue  in  his  own  name.®"^  It  is  also  decided  in  that  State  that  a 
stockholder's  action  being  derivative,  the  plaintiff  must  show 
either  a  demand  and  a  refusal  of  the  corporation  to  sue,  or 
that  a  demand  would  be  futile,  in  that  those  in  control  of  the 
corporation  are  the  wrongdoers  so  that  an  action  by  the  cor- 
poration would  not  be  prosecuted  in  good  faith .^^ 

Under  a  Washington  decision  a  court  of  equity  will  not  en- 
tertain a  bill  by  stockholders  to  set  aside  a  contract  made  by 
officers  of  the  corporation,  alleged  to  be  contrary  to  the  in- 

82  Cornell  V.  Sims,  111  Ga.  828,  36  S.  E.  627. 

63  Reinecke  v.  Bailey,  33  Ky.  L.  Rep.  977,  112  S.  W.  569,  citing  Collier  v. 
DeeringCamp  Ground  Assoc,  23  Ky.  Law  Rep.  1799;  P.,  C,  C.  &  St.  L.  R. 
R.  Co.  V.  Dodd,  24  Ky.  Law  Rep.  2057;  Jones  v.  Johnson,  10  Bush,  649; 
10  Cyc.  pp.  963,  967. 

64  Flynn  v.  Brooklyn  City  R.  R.  Co.,  158  N.  Y.  493,  53  N.  E.  520,  aff'g 
41  N.  Y.  Supp.  566,  9  App.  Div.  269.  As  to  what  must  be  shown  see  Rosen- 
baum  V.  Rice,  83  N.  Y.  Supp.  494,  86  App.  Div.  617. 

65  McCoy  V.  Gas  Engine  &  Power  Co.,  135  App.  Div.  (N.  Y.)  771. 

505 


§   'A07       I'AHTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

terests  of  the  corporation  and  made  without  authority  unless 
it  is  shown  in  the  complaint  that  the  stockholders  have  sought 
redress  in  the  corporation  or  that  it  would  be  fruitless  for  them 
to  do  so.^^ 

§  307.  Enforcing  Stockholders'  Liability — Exhausting 
Remedies  Against  Corporation — When  Judgment  and  Exe- 
cution Unsatisfied  Are  Conditions  Precedent. 

Wliere  the  statutes  of  the  State  which  creates  a  corporation, 
making  the  stockholders  liable  for  the  corporate  debts,  pro- 
vide a  special  remedy,  the  liability  of  a  stockholder  can  be  en- 
forced in  no  other  manner  in  a  court  of  the  United  States. 
And  where  the  statutes  of  a  State  make  the  stockholders  of  a 
manufacturing  corporation  liable  for  its  debts  until  its  capital 
stock  has  been  paid  in  and  a  certificate  thereof  recorded;  and 
originally  provided  that  the  property  of  stockholders  might 
be  taken  on  writ  of  attachment  or  execution  issued  against 
the  corporation,  or  the  creditor  might  have  his  remedy  against 
the  stockholders  by  bill  in  equity;  and  since  modified  by  enact- 
ing that  all  proceedings  to  enforce  the  Uability  of  a  stockholder 
for  the  debts  of  a  corporation  shall  be  either  by  suit  in  equity 
or  by  action  of  debt  on  the  judgment  obtained  against  the  cor- 
poration; a  creditor  of  the  State  enacting  such  statute,  cannot 
bring  an  action  at  law  against  the  executor  of  a  stockholder  in 

68  Elliott  V.  Puget  Sound  Wood  Products  Co.,  52  Wash.  637,  101  Pac.  228. 
The  court,  per  Dunbar,  J.,  said  (at  p.  641)  as  to  the  general  rule:  "This  may 
be  a  technical  rule  yet  it  is  founded  on  general  principles  of  justice  and  of 
necessity  in  the  transaction  of  corporate  business  though  the  officers  of 
the  corporation,  in  the  absence  of  fraud  or  oppression,  must  be  allowed  to 
transact  their  own  business  and  settle  their  own  difficulties;  the  duty  of  the 
stockholder  being  to  bow  to  the  will  of  the  majority  as  expressed  through 
their  agents. 

"  It  is  said  by  the  appellants  in  their  brief  that  a  corporation  has  no  means 
of  acting  except  through  its  agents,  and  that  the  acts  complained  of  in  this 
case  are  the  acts  of  those  agents;  therefore  a  court  of  equity  will  interfere 
at  the  suit  of  a  shareholder  without  any  proof  or  allegation  of  a  demand 
upon  such  agents,  for  a  demand  would  ordinarily  be  nugatory  under  these 
circumstances.  Of  course,  it  is  well  answered  that  every  grievance  in  a  cor- 
poration may  arise  from  the  acts  of  its  agents  or  directors,  and  that  if  the 
position  of  the  aj)pellants  is  tenable,  the  general  rule  would  be  destroyed." 

50() 


RIGHTS,     LIABILITIES    AND    REMEDIES    OF  §  307 

the  Circuit  Court  of  the  I'liited  States  in  auotlier  State,  with- 
out having  obtained  a  judgment  against  the  corporation,  even 
if  the  corporation  has  been  adjudged  bankrupt.^^  General 
creditors  of  a  corporation  must  rechice  their  claims  against  it  to 
judgment  and  so  exhaust  their  remedies  before  th(>y  can  main- 
tain a  suit  against  stockholders  in  a  Federal  court  of  equity.*'* 

It  is  decided  in  Georgia  that  even  though  a  corporation  has 
ceased  to  do  business  and  has  made  a  pro  rata  distribution  of 
its  property  among  its  shareholders,  still  it  is  necessary  that 
a  claim  be  reduced  to  judgment  in  order  to  enable  a  creditor 
to  hold  stockholders  liable.^^ 

In  Kansas  the  return  of  an  execution  unsatisfied  is  held 
sufficient  to  enable  suit  to  be  brought  against  a  stockholder.'" 

lender  the  New  York  Stock  Corporation  Law  '^  no  action 
can  be  brought  against  a  stockholder  for  any  debt  of  the  cor- 
poration until  judgment  therefor  has  been  recovered  against 
the  corporation,  and  an  execution  thereon  has  been  returned 
unsatisfied  in  whole  or  in  part,  and  the  amount  due  on  such 
execution,  with  costs,  is  the  amount  recoverable.  These  pro- 
visions as  to  judgment  and  execution,  therefore,  constitute 
conditions  precedent  to  the  maintenance  of  an  action  by  a 
creditor.'^    And  the  statute  must  be  complied  with;  nor  does 

87  Fourth  National  Bank  v.  Francklyn,  120  U.  S.  747,  30  L.  ed.  825,  7 
Sup.  Ct.  757.  See  Swan  Land  &  C^attle  Co.  v.  Frank,  148  U.  S.  GO:^,  .'^7  L.  ed. 
577,  13Sup.  Ct.  6!)1. 

When  judgment  and  execution  unsatisfied  condition  precedent  to  suit, 
see  New  Hampshire  Sav.  Bank  v.  Richey  (U.  S.  C.  C.  A.),  121  Fed.  956, 
58  C.  C.  A.  294. 

Action  cannot  be  maintained  where  corporation  itself  estopped.  Kessler 
V.  Ensley  Co.  (U.  S.  C.  C),  123  Fed.  546. 

88  New  Hampshire  Sav.  Bank  v.  Richey  (U.  S.  C.  C.  A.),  121  Fed.  956, 
58  C.  C.  A.  94. 

8a  Lamar  v.  Alhson,  101  Ga.  270,  28  S.  E.  686. 

70  Thompson  v.  Pfeifer,  60  Kan.  409,  56  Pac.  763. 

71  N.  Y.  Laws,  1890,  chap.  564,  §  55,  as  amended  by  Laws,  1892,  chap. 
688;  Laws,  1909,  chap.  61. 

72  National  Bank  of  Auburn  v.  DilHngham,  147  N.  Y.  603,  611,  71  N.  Y. 
St.  Rep.  253,  42  N.  E.  338;  Rocky  xMountain  Nat.  Bank  v.  BHss,  89  N.  Y. 
338.  See  United  States  Glass  Co.  v.  Levett,  53  xN[.  Y.  Supp.  688,  24  Misc. 
424. 

507 


§  .SOS      PARTIES  CONTINUED — CREDITORS — STOCKHOLDERS — 

the  inability,  because  of  the  crowded  condition  of  the  calendar, 
to  obtain  a  judgment  in  an  action  which  has  been  commenced, 
or  the  insolvency  of  the  corporation  constitute  any  excuse  for 
noncompliance.'^ 

An  action  against  a  stockholder  in  a  limited  liability  com- 
pany organized  under  the  "Business  Corporation  Act"  of 
New  York  '•*  to  recover  a  debt  of  the  corporation  under  the 
provision  of  the  act  '^  making  such  a  stockholder  liable  for  the 
debts  of  the  company  to  an  amount  equal  to  his  stock  until 
the  whole  amount  of  capital  stock  has  been  paid  in  and  cer- 
tificate filed,  could  be  maintained  after  a  suit  had  been  com- 
menced against  the  corporation  but  before  judgment  against 
it.  The  remedy  of  the  creditor  suing,  after  recovery  of  judg- 
ment against  the  stockholder,  was  simply  suspended  until 
after  judgment  and  execution  against  the  corporation  and  re- 
turn thereof  unsatisfied.'''^ 

Under  an  Ohio  decision  the  statutory  liability  of  stock- 
holders for  corporate  debts  cannot,  however,  be  enforced  by  a 
creditor  until  after  levy  and  return  of  execution  as  unsatis- 
fied, where  the  corporation  continues  its  business  and  has 
property,  even  though  insufficient  to  satisfy  its  debts  in  full, 
which  may  be  made  subject  to  levy  and  sale  on  execution.'^' 

§  308.  Enforcing  Stockholders'  Liability  —  Exhausting 
Remedies  Against  Corporation — When  Judgment  and  Exe- 
cution Unsatisfied  Are  Not  Conditions  Precedent. 

The  statutory  liability  of  stockliolders  may  be  enforced  by 
creditors  or  any  of  them  without  first  proceeding  against  the 
corporation  after  it  has  become  insolvent  and  assigned  its  prop- 

73  So  held  in  Gause  v.  Boldt,  99  N.  Y.  Supp.  442,  49  Misc.  340,  100  N.  Y. 
Supp.  1117.    See  United  Glass  Co.  v.  Vary,  152  N.  Y.  121,  46  N.  E.  .312. 

74  Act  1875,  chap.  611,  Laws  of  1875,  Business  Corp.  Laws,  Laws,  1009, 
chap.  12,  §  6. 

75  Section  37. 

76  Walton  V.  Coe,  110  N.  Y.  109,  16  N.  Y.  St.  Rep.  866,  17  N.  E.  676, 
4  Rd.  &  Corp.  L.  J.  377. 

"  Barrick  v.  Gifford,  47  Ohio  St.  ISO,  23  Ohio  L.  J.  313,  2  Am.  R.  &  Corp. 
Rep.  690,  24  N.  E.  259,  31  Am.  &  Eng.  Corp.  Cas.  484. 

5()8 


RIGHTS,     LIAHILITIIO.S    AND    REMEDIES    OF  §  308 

erty  for  (ho  benefit  of  creditors.^^  If  a  corporation  has  been 
dissolved  and  cannot  be  sued  a  creditor  can  proceed  to  enfoix-e 
the  payment  of  unpaid  subscriptions  without  first  estabhsh- 
ing  his  claim^**  And  a  judgment  and  unsatisfied  execution  are 
not  a  prerequisite  to  a  suit  by  a  creditor  against  a  stockholder 
for  an  unpaid  subscription  where  the  corporation  has  ceased 
to  carry  on  business,  is  insolvent  and  in  a  receiver's  hands.®'' 

Under  a  Kansas  decision,  a  corporation  which  ceases  to  do 
business  for  more  than  one  year  is  deemed  to  be  dissolved,  for 
the  purpose  of  enabling  creditors  to  enforce  tlie  individual  lia- 
bility of  stockholders;  but  such  cessation  of  business  does  not 
operate  as  a  legal  and  complete  dissolution  of  the  corporation 
for  any  purpose  other  than  the  one  named.  And  in  that  State 
a  creditor  of  an  insolvent  corporation  may  enforce  the  indi- 
vidual liability  of  stockholders,  under  the  general  statutes  of 
that  State, '^^  when  there  is  no  property  subject  to  be  taken  on 
execution,  notwithstanding  there  may  at  the  time  be  assets 
of  the  corporation  in  the  hands  of  an  assignee  to  be  ultimately 
apphed  in  payment  of  corporate  debts.*^ 

So  under  a  Washington  decision,  a  judgment  is  not  a  pre- 
requisite in  the  absence  of  a  statute  where  the  corporation  is 
insolvent  and  has  no  assets,  the  suit  by  a  creditor  to  enforce 
unpaid  stock  subscriptions  being  in  the  nature  of  a  creditor's 
bill.«3 

When  the  performance  of  a  condition  becomes  impossible 
by  the  operation  and  effect  of  a  statute,  that  is,  becomes  il- 
legal, the  performance  is  excused  and  the  rights  of  the  parties 
will  be  preserved.    The  courts  will  not  require  that  useless  and 

78  Barrick  v.  Gifford,  47  Ohio  St.  180,  23  Ohio  L.  J.  .313,  24  N.  E.  259,  2 
Am.  R.  &  Corp.  Rep.  690,  31  Am.  &  Eng.  Corp.  Cas.  484.  See  also  Salt 
Lake  Hardware  Co.  v.  Tintic  Mills  Co.,  13  Utah,  423,  45  Pac.  200,  4  Am.  & 
Eng.  Corp.  Cas.  (N.  S.)  224. 

79  Lewiston  v.  Stoddard.  7S  Conn.  575,  63  Atl.  621. 

80  Williams  v.  Chamberlain,  29  Ky.  L.  Rep.  606,  94  S.  W.  29. 

81  Gen.  Stat.,  1897,  chap.  66,  §  50. 

82  Sleeper  v.  Norris,  59  Kan.  555,  53  Pac.  757,  9  Am.  &  Eng.  Corp.  Cas. 
(N.  S.)  45. 

83  Chilberg  v.  Siebenbaum,  41  Wash.  663,  84  Pac.  598. 

509 


§  oi)8      I'AliTIEW  CONTINUED — CREDITORS — STOCKHOLDERS — 

unwarranted  action  be  taken.  Thus  in  an  action  brought 
under  the  Stock  Corporation  Law  of  New  York,*^  to  recover 
against  stockholders  for  debts  of  a  corporation  to  an  amount 
equal  to  the  amount  unpaid  on  their  stock,  it  appeared  that 
the  claim  was  proved  against  the  corporation  in  bankruptcy 
proceedings  and  plaintiff  received  a  dividend  thereon.  It  was 
held  that  the  stockholders  are  protected  by  lawful  proceed- 
ings in  a  court  of  paramount  jurisdiction  in  the  premises  as 
fully  as  they  could  have  been  by  full  compliance  with  the 
State  law,  and  that  the  failure  to  obtain  a  judgment  and  re- 
turn of  execution  unsatisfied,  as  required  by  the  Stock  Corpo- 
ration Law,*^  was  excused  by  the  discharge  of  the  corporation 
in  bankruptcy.  Again,  any  judgment  resting  on  a  debt  cov- 
ered by  a  discharge  in  bankruptcy  must  be  canceled  by  the 
court  in  which  it  was  rendered,  upon  application  made  pur- 
suant to  §  1268  of  the  Code  of  Civil  Procedure.*^  And  in  that 
State  an  employe  of  a  corporation  having  recovered  judg- 
ment in  a  city  court  against  the  corporation  for  services 
rendered,  need  not  file  a  transcript  of  the  judgment  with  the 
county  clerk  and  exhaust  his  remedy  against  the  corporation 
by  the  execution  of  a  court  of  record  before  suing  stockholders.*^ 
It  is  sufficient  if  he  exhaust  his  remedy  against  the  personal 
property  of  the  corporation  by  the  execution  of  the  city  court.** 
An  averment  that  a  judgment  has  been  recovered  and  an  ex- 
ecution returned  unsatisfied  against  a  corporation  is  unnec- 
essary in  a  suit  by  creditors  to  enforce  stockholders'  liability 
for  corporate  debts  where  insolvency,  an  assignment  for  cred- 
itors and  financial  inability  to  carry  on  the  corporate  business 
are  alleged.*^ 

**  Section  54,  Laws,  1890,  chap.  564,  as  amended  by  Laws,  1892,  chap.  688; 
Laws,  1901,  chap.  354.  See  Laws,  1909,  chap.  61,  §  56,  Birdseye's  Gumming 
&  Gilbert's  Consol.  L.  of  N.  Y.  Annot.,  p.  5773. 

85  Section  55. 

86  Firestone  Tire  &  Rubber  Co.  v.  Agnew,  194  N.  Y.  165,  86  N.  E.  116, 
rev'g  112  N.  Y.  Supp.  907,  128  App.  Div.  518. 

87  N.  Y.  Stock  Corporation  Law,  §§  57,  59,  Laws,  1909,  chao.  61,  5  Birds- 
eye's  Cumming  &  Gilbert's  Consol.  Laws  N.  Y.  Annot.  pp.  5775-6. 

88  Padros  v.  Swarzenbach,  134  App.  Div.  (N.  Y.)  811. 

89  Morgan  v.  Lewis,  46  Ohio  St.  1,  17  N.  E.  558,  20  Ohio  L.  J.  423. 

510 


HKIHTS,     LIAiUIJTIKS    AM)    HIOMKDIKS    OK     §§309',  310 

§  'MV.).  Stockholders'  Liability  Dissolution  as  Condition 
Precedent  to  Enforcing  Same. 

Where  a  statute  provides  that  stockholders  in  a  corporation 
arc  liable,  upon  a  dissolution  of  the  company,  for  the  debts 
thereof  to  an  amount  equal  to  the  amount  of  the  par  value  of 
the  stock  held  by  them  at  the  time  of  such  dissolution,  then 
the  dissolution  is  a  condition  precedent  that  must  appear  be- 
fore the  creditor  can  enforce  this  statutory  liability  by  suit 
against  the  shareholder.  Such  dissolution  need  not,  however, 
be  first  established  by  legislative  enactment  or  by  judicial  pro- 
ceedings before  the  company's  creditors  can  proceed  directly 
against  the  stockholders  to  enforce  their  statutory  liability 
for  debts  of  the  corporation.  It  is  sufficient  for  the  declaration 
to  state  that  the  corporation  was  dissolved  on  or  about  a  date 
stated  therein.  Such  a  dissolution  takes  place,  in  the  sense  in 
which  the  term  is  used  in  the  statute  when  the  corporation 
has  debts  and  no  assets  and  has  ceased  to  act  and  to  exercise 
its  corporate  functions,  or  has  suffered  acts  to  be  done  which 
end  the  object  for  which  it  was  created;  and  the  facts  and  cir- 
cumstances relied  upon  as  constituting  such  dissolution  are 
matters  of  evidence  and  need  not  be  averred  in  the  pleadings.^" 

§  310.  Effect  of  Equity  Rule  94— When  Demand  Upon 
Directors  for  Relief  Is  and  Is  Not  Condition  Precedent 
Stockholders — Right    to    Protect    Corporation    When    Di- 
rectory Derelict. 

In  the  Federal  Courts  a  demand  upon  the  managing  board 
of  the  corporation  is  necessary  under  Rule  94  before  a  stock- 
holder can  maintain  a  suit.^^ 

Equity  Rule  94,  which  is  intended  to  secure  the  Federal 
Courts  from  imposition  upon  their  jurisdiction,  recognizes  the 

90  Gibbs  V.  Davis,  27  Fla.  531,  S  So.  63.3.  The  statute  which  provides  an 
additional  summary  remedy  to  creditors  is  held  in  this  case  not  to  super- 
sede the  statutory  remedy  set  forth  in  the  text.  The  statute  of  1887  changes 
the  liability  of  stockholders  in  corporations  so  as  to  limit  such  liability  to 
the  amount  that  remains  unpaid  upon  their  subscriptions  but  does  not  af- 
fect rights  and  liabilities  which  accrued  prior  to  its  enactment,  and  the  above 
suit  was  instituted  in  1886. 

ei  Miller  v.  Murphy,  17  Colo.  408,  30  Pac.  46. 

511 


§  310      PAUTIKS  c:ONTINUED — CREDITORS — STOCKHOLDERS — 

riglit  of  the  corporate  directory  to  corporate  control,  and  ex- 
presses primarily  the  conditions  which  must  i)recede  the  right 
of  the  stockholders  to  protect  the  corporation  in  cases  where 
the  directory  is  derelict;  but  the  requirements  of  the  rule  may 
be  dispensed  with  where  they  do  not  apply  by  reason  of  the 
antagonism  between  the  directory  and  the  corporate  interest. 
Said  rule  is  intended  to  have  a  practical  application,  and  it 
does  not  apply  where  the  corporate  interests  can  only  be  pro- 
tected by  a  suit,  which,  if  successful,  would  be  detrimental  to 
all  the  directors  in  other  capacities.  So  where  stockholders  of 
a  lessor  corporation  sued,  for  its  benefit,  the  lessee  corporation, 
the  directors  of  the  two  corporations  being  almost  identical 
and  the  lessee  corporation  also  owning,  or  holding  the  voting 
power,  of  sufficient  stock  of  the  lessee  corporation  to  control 
a  stockholder's  meeting,  the  fact  that  the  stockholders  bring- 
ing the  suit  made  no  demand  for  relief  upon  the  board  of  di- 
rectors nor  any  effort  to  obtain  relief  at  a  stockholders'  meet- 
ing does  not  prevent  them  from  maintaining  the  bill.*'^  Nor 
under  said  Equity  Rule  94  is  it  necessary  to  make  demand 
upon  the  corporate  authorities  to  sue  if  it  is  apparent  from  the 
bill  that  such  a  demand  would  be  useless  and  it  is  not  a  condi- 
tion precedent  to  a  suit.*^^  If  the  averments  of  the  bill  show 
that  the  corporation  is  controlled  by  defendants,  Equity  Rule  94 
does  not  require  a  stockholder  complainant  to  set  out,  what 
his  efforts  were  to  induce  action  by  the  corporation.^^    A  stock- 

92  Delaware  &  Hudson  Co.  v.  Albany  &  Susquehanna  Ry.  Co.,  213  U.  S. 
435,  53  L.  ed.  862,  29  Sup.  Ct.  540.  Qucere,  and  not  decided,  whether  stock- 
holders have  power  to  compel  directors  to  institute  suits  to  which  the  latter 
are  opposed.  See  as  to  Equity  Rule  94;  Church  v.  Citizens'  Street  Ry.  Co. 
(U.  S.  C.  C),  78  Fed.  526;  Excelsior  Pebble  Phosphate  Co.  v.  Brown  (U.  S. 
C.  C),  74  Fed.  321,  42  U.  S.  App.  55,  20  C.  C.  A.  428. 

93  Eldred  v.  American  Palace-Car  Co.  (U.  S.  C.  C),  99  Fed.  168.  See  also 
Weir  V.  Bay  State  Gas  Co.  (U.  S.  C.  C),  91  Fed.  940. 

94  Berwind  v.  Canadian  Pac.  Ry.  Co.  (U.  S.  C.  C),  98  Fed.  158. 
Equity  Rule  94;  When  demurrer  sustained  because  complainant  had  not 

by  averments  in  his  bill  brought  himself  within  the  directions  prescribed  by 
Equity  Rule  94,  104  U.  S.  ix-x,  respecting  suits  brought  by  stockholders  in 
a  corporation  against  the  corporation  and  other  parties,  founded  on  rights 
which  might  be  properly  asserted  by  the  corporation.  Quincy  v.  Steele, 
120  U.  S.  241,  30  L.  ed.  624,  7  Sup.  Ct.  496,  520. 

512 


RIGHTS,    LIABILITIES    AND    REMEDIES    OF      §§31],  312 

holder's  bill  to  set  aside  a  sale  of  property  by  the  ('ori)()ratioii 
based  on  fraud  of  the  president  and  directors  cannot  bo  main- 
tained under  Equity  Rule  94  unless  it  is  shown  by  the  bill 
that  a  demand  was  made  upon  the  stockholders  to  take  ac- 
tion and  the  cause  of  the  failure  of  the  efforts  made  and  the 
nature  of  such  efforts.^^ 

§  311.  Judgment  Creditor's  Right  to  Sue— Parties— Con- 
ditions Precedent. 

If  judgment  creditors,  who  have  established  a  corporation's 
insolvency  by  judgment  and  an  unsatisfied  execution,  sue  the 
stockholders  to  recover  unpaid  subscriptions  otlier  creditors 
may  join  with  them  in  the  suit  without  first  establishing  their 
claims  by  judgments.^^  Where  a  corporation  as  creditor  re- 
covers judgment  against  another  corporation  for  the  purchase 
price  of  goods,  and  an  execution  is  issued  and  returned  unsat- 
isfied, and  the  corporation  becomes  insolvent,  such  creditor 
cannot  thereafter  charge  the  stockholders  of  the  corporation 
as  partners  or  its  officers  or  trustees  with  the  debt,  there  being 
no  fraudulent  intent  alleged  and  proved;  as  the  State  alone 
can  complain  of  the  violation  of  its  laws;  and  the  fact  that 
judgment  was  recovered  against  the  corporation  affords  con- 
clusive evidence  that  the  trustees  in  contracting  the  debt  did 
not  exceed  their  authority.  This  applies  even  though  the  cap- 
ital stock  of  the  corporation  was  not  fully  subscribed  at  the 
time  the  debt  was  contracted.**^  If  a  judgment  is  obtained 
against  a  foreign  corporation  in  a  State  where  it  has  its  prin- 
cipal place  of  business,  creditors  can  sue  stockholders  there 
without  first  obtaming  judgment  against  the  corporation  in  the 
State  where  it  was  incorporated  and  in  which  it  has  no  assets."* 

§  312.  Order   of  Court  Requiring   Remedies  to  Be   Ex- 
hausted— Statute  Limitations. 
An  order  of  the  court  requiring  all  remedies  to  be  exhausted 

85  Macon  D.  &  S.  R.  Co.  v.  Shailer  (U.  S.  C.  C.  A.),  141  Fed.  585. 

96  Williams  v.  Chamberlain,  29  Ky.  L.  Rep.  606,  94  S.  W.  29. 

97  American  Radiator  Co.  v.  Kinnear  (Wash,,  1909),  105  Pac.  630. 

98  McConey  v.  Belton  Oil  &  Gas  Co.,  97  Minn.  190,  106  N.  W.  900. 

33  513 


§  31-       TAliriEa  t'UNTlNUED — CKEDITOKS — «TUC'KHULDEIiS~ 

agaiiist  stockholders  primarily  liable  for  the  debts  of  a  bank 
before  its  reorganization,  before  enforcing  assessment  against 
stockholders  secondarily  liable  to  creditors,  must  receive  a 
reasonable  construction  and  not  a  technical  one.  It  is  not  to 
be  construed  as  requiring  the  exhaustion  of  all  remedies  against 
stockholders  primarily  liable  in  favor  of  whom  the  statute  of 
Umitations  has  run.^^ 

89  State  ex  rel.  Pope  v.  Germania  Bank  of  St.  Paul,  106  Minn.  446,  45.3, 
119  N.  W.  61.  This  was  not  an  original  action  to  enforce  the  liability  of 
stockholders,  but  a  proceeding  to  secure  the  distribution  of  a  fund  paid  into 
court  by  certain  stockholders  (appellants)  in  full  of  their  stock  liabihty 
upon  condition  that,  if  for  any  reason  it  should  be  determined  that  there 
was  an  overpayment  the  amount  should  be  repaid.  The  case  was  one  of  a 
petition  by  a  receiver  of  an  insolvent  bank  for  the  annulment  of  an  order 
which  restrained  the  receiver  from  enforcing  an  assessment  against  stock- 
holder.s  in  the  bank  secondarily  liable  to  creditors  and  praying  that  he  be 
ordered  to  distribute  a  certain  fund  to  the  creditors.  Two  orders  were  made, 
one  discharging  the  restraining  order  and  decreeing  that  all  remedies  against 
the  persons  primarily  liable  had  been  substantially  exhausted,  and  the  othef 
that  said  fund  be  distributed  according  to  law  by  the  receiver  with  other 
moneys  now  or  which  may  hereafter  come  into  his  hands.  From  the  latter 
order  there  was  an  appeal,  affirmed. 


514 


ACTIUNW    AT    LAW — LlALilLITV,    GENERALLY 


^oi3 


CHAPTER  XVIII 


ACTIONS  AT  LAW — LIABILITY,  GENERALLY 


§  313.  Form    of    Action — Effect    of    §  317.  Liability   of   Corporations   to 


Code     Provisions,     Gener- 
ally. 

314.  Actions  Under  Statutes,  Gen- 

erally. 

315.  Ejectment. 

316.  Forcible     Entry     and      De- 

tainer. 


Third  Persons  for  Negli- 
gent, Willful,  Wanton  or 
Malicious  Acts  of  Servants. 

318.  Negligent    Acts    of    Corpora- 

tions, Generally. 

319.  Election — Form   of   Action — 

Contract  or  Tort;  Waiver. 


§  313.  Form  of  Action — Effect  of  Code  Provisions,  Gen- 
erally. 

Notwithstanding  a  provision  of  a  civil  code  abolishes  all 
distinctions  between  actions  at  law  and  suits  in  equity  and 
the  common-law  forms  of  actions  and  suits,  still  the  rules  of 
law  which  govern  and  control  the  manner  of  enforcing  a  cause 
of  action  must  of  necessity  depend  upon  the  nature  of  the 
cause  of  action  sought  to  be  enforced,  and,  until  the  nature  of 
the  cause  of  action,  if  any,  arising  out  of  a  given  state  of  facts 
pleaded  is  determined,  the  rules  of  law  governing  the  case  are 
impossible  of  ascertainment  and  application.^  "While  it  is 
true  that  the  Code  has  abolished  the  distinctions  between 
actions  at  law  and  suits  in  equity,  and  has  provided  that  there 
shall  be  but  one  form  of  action  for  the  enforcement  and  pro- 
tection of  private  rights  and  the  redress  and  prevention  of 
private  wrongs,  yet  there  still  exist  certain  elements  or  features 
pertaining  to  actions  which  are  unchanged  thereby.  These  do 
not  belong  to  the  action  as  a  judicial  instrument  for  establish- 
ing a  right,  but  inhere  to  and  belong  to  the  primary  and 
remedial  rights  themselves.  For  the  enforcement  and  pro- 
tection of  these  rights  but  one  form  of  action  exists,  but,  as 
iCarbondale  Investment  Co.  v.  Burdick,  67  Kan.  329,  72  Pac.  781. 

515 


§  oi4  ACTIONS    AT    LAW^LIABILITY,    GENERALLY 

to  the  remedies  which  he  back  of  all  forms  of  action,  the  law 
still  recognizes  and  observes  distinctions  which  are  as  vital  as 
before  the  Code.  It  is  just  as  necessary  to-day  as  it  ever  was 
that  a  suitor  should  so  state  his  cause  of  action  that  the  court 
may  determine  whether  it  be  ex  contractu  or  ex  delicto  J  ^  ^ 
Under  the  code  system  of  California  the  court  may  grant  any 
relief,  legal  or  equitable,  to  which  a  party  may  be  entitled,  and 
the  mere  fact  that  the  plaintiff  in  framing  the  complaint  pro- 
ceeded upon  a  certain  theory  of  his  rights  affords  no  ground 
for  sustaining  a  general  demurrer  if  the  complainant  allege  facts 
which  entitle  him  to  relief  upon  some  other  theory.^ 

§  314.  Actions  Under  Statutes,  Generally. 

A  person  discriminated  against  by  an  express  company  may 
hold  such  company  liable  in  damages  for  the  excess  paid  by 
him  over  that  charged  to  others,  where  a  statute  provides  that 
the  railroad  commissioner  may  fix  rates  or  charges  for  certain 
public  service  corporations  and  also  obligating  such  com- 
panies to  fix  rates  without  discrimination  and  making  them 
liable,  for  extortionate  charges,  in  a  civil  or  criminal  action.'* 

Charges  involuntarily  paid  to  a  gas  company  by  a  private 
consumer  in  excess  of  the  rates  prescribed  by  the  ordinance 
under  which  the  company  is  operating  may  be  recovered  back, 
although  a  right  of  action  therefor  is  not  expressly  conferred 
by  the  ordinance  which  prescribes  the  rates  .^  If  statutory 
double  damages  are  provided  for  in  case  of  baggage  lost  or 
carelessly  or  willfully  injured  by  a  railroad  company  such 
enactment  applies  to  personal  baggage  and  does  not  authorize 
a  recovery  of  such  damages  by  a  traveling  salesman  for  the 
loss  of  his  sample  case  even  though  it  was  checked  as  baggage.*^ 
Again,  a  transferee  of  warehouse  receipts  which  designate  and 

2  Dessert  Lumber  Co.  v.  Wadleigh,  103  Wis.  318,  79  N.  W.  237,  per  Bar- 
deen,  J. 

3  Bell  V.  Bank  of  California  (Cal.,  1908),  94  Pac.  889,  891. 

*  American  Express  Co.  v.  Crawley,  88  Miss.  525,  41  So.  261. 

5  Pingree  v.  Mutual  Gas  Co.,  107  Mich.  156,  2  Det.  L.  N.  639,  65  N.  W.  6. 
Assumpsit  to  recover  overcharges  for  gas  furnished. 

6  New  Orleans  &  Northeastern  Rd.  Co.  v.  Shackelford,  87  Miss.  610,  40 
S.  W.  427. 

516 


ACTIONS    AT    LAW — LAIBILITY,    GENERALLY  §  315 

guarantee  the  grade  and  quantity  of  wheat  stored  may,  under 
a  statute  requiring  the  dehvcry  of  the  commodity  stored  to 
the  owner  of  the  receipts  on  their  dehvery,  liold  the  ware- 
houseman Hable  for  damages  for  the  refusal  to  deliver  to  him 
the  wheat  demanded  and  delivering  an  inferior  grade  of  wheat/ 

§  315.  Ejectment." 

Ejectment  may  be  maintained  by  the  holder  in  trust  of  the 
legal  title  to  property  for  a  religious  corporation  against  one 
in  possession  without  a  legal  or  equitable  title."  And  where  a 
railroad  has  been  granted  public  lands  by  Congress  it  may 

7  Lawson  v.  Genesee  Farmers'  Alliance  Joint  Stock  Co.  (Idaho,  1895),  43 
Pac.  191.  Action  brought  under  the  provisions  of  an  act  entitled,  "An  act 
governing  the  storage  of  gi'ain,  flour,  wool  or  other  produce  when  received 
for  storing,  shipping,  grinding  or  manufacturing,"  approved  January  15, 
1891  (1  Sess.  Laws,  p.  12),  to  recover  damages  for  an  alleged  breach  of  con- 
tract contained  in  warehouse  receipts  issued  by  defendant  on  receipt  of 
certain  wheat  delivered  to  it  for  storage  by  the  transferrer  of  the  receipts. 

8  See  §  313,  herein. 

9  Church  of  Christ  v.  Reorganized  Church  of  Jesus  Christ  of  L.  D.  S.  (U.  S. 
C.  C),  71  Fed.  250,  1  C.  C.  A.  397,  36  U.  S.  App.  379,  aff'd  in  70  Fed.  179,  17 
C.  C.  A.  387,  36  U.  S.  App.  110. 

What  title  and  possession  a  sufficient  basis  of  action  of  ejectment,  see  the  fol- 
lowing cases: 

United  States:  Valcalda  v.  Silver  Peak  Mines  (U.  S.  C.  C.  A.),  86  Fed.  90, 
56  U.  S.  App.  666,  29  C.  C.  A.  591;  Northern  Pac.  Rd.  Co.  v.  Cannon,  46 
Fed. 237. 

Alabama:  Jackson  Lumber  Co.  v.  McCreary,  136  Ala.  278,  34  So.  850  (on 
strength  of  plaintiff's  own  title) ;  McClendon  v.  Equitable  Mtge.  Co.,  122  Ala. 
384,  25  So.  30. 

California:  Southern  Pacific  R.  Co.  v.  Burr,  86  Cal.  279,  24  Pac.  1032 
(railroad  grantee  of  public  lands  may  maintain  ejectment  against  prior  oc- 
cupant without  title). 

Colorado:  Chivington  v.  Colorado  Springs  Co.,  9  Colo.  597,  14  Pac.  212 
(on  strength  of  plaintiff's  own  title). 

Indiana:  Silver  Creek  Cement  Corp.  v.  Union  Lime  Co.,  138  Ind.  297,  35 
N.  E.  125  (on  strength  of  plaintiff's  own  title). 

Iowa:  Lathrop  v.  American  Emigrant  Co.,  41  Iowa,  547  (on  strength  of 
plaintiff's  own  title). 

Michigan:  Michigan  Cent.  R.  Co.  v.  McNaughton,  45  Mich.  87,  7  N.  W. 
712. 

NebrasJca:  Chicago,  Burlington  &  Quincy  Rd.  Co.  v.  Schalkopf,  54  Neb. 
448,  74  N.  W.  826  (on  strength  of  plaintiff's  own  title). 

New  Mexico:  New  Mexico  Rio  Oande  &  P.  R.  Co.  v.  Crouch,  4  N.  M.  141, 

517 


§  SIT)  ACTIONS    AT    LAW — LIABILITY,    GENERALLY 

maintain  ejectment  therefor  against  persons  holding  under 
void  subsequent  patents.^"  If  land,  however,  is  excepted  from 
a  claimed  grant  of  land  to  a  railroad  company  it  cannot  main- 
tain ejectment  therefor  even  though  defendant  has  no  valid 
claim  thereto." 

Ejectment  cannot  be  maintained  against  a  railroad  com- 
pany if  the  landowner,  knowing  that  such  company  has  entered 
upon  his  land  and  is  engaged  in  constructing  its  road  without 
having  complied  with  the  statutes  requiring  either  payment 
by  agreement  or  proceedings  to  condemn,  remains  inactive 
and  permits  it  to  go  on  and  expend  large  sums  in  the  work;  in 
such  case  he  will  be  restricted  to  a  suit  for  damages.^^  So 
where  a  railroad  company  acting  under  a  contract  of  purchase 
of  land  enters  thereupon  with  the  owner's  consent,  part  of  the 
purchase  price  having  been  paid  and  promissory  notes  taken 
for  the  balance,  and  at  a  great  expense  places  its  tracks,  etc., 
thereon,  the  owner,  who  has  reserved  the  title  in  himself  until 
satisfaction  of  the  notes,  cannot  maintain  ejectment  therefor 
notwithstanding  the  nonpayment  of  the  notes  and  the  bar  of 

13  Pac.  201  (one  expelled  from  public  lands  by  those  without  better  title 
may  maintain  ejectment  under  statute). 

Rhode  Island:  New  York,  New  Haven  &  Hfd.  Rd.  Co.  v.  Horgan,  25  R.  I. 
408,  56  Atl.  179. 

Tennessee:  Bleidorn  v.  Pilot  Mountain  Coal  &  M.  Co.,  89  Tenn.  166,  204, 
15  S.  W.  737. 

Texas:  Sebastian  v.  Martin  Brown  Co.,  75  Tex.  291,  12  S.  W.  986  (on 
strength  of  plaintiff's  own  title);  Parker  v.  Fort  Worth  &  D.  C.  R.  Co.,  71 
Tex.  132,  8  S.  W.  541. 

Virginia:  Sulphur  Mines  Co.  v.  Thompson,  93  Va.  293,  25  S.  E.  23. 

West  Virginia:  Holly  River  Coal  Co.  v.  Howell,  36  W.  Va.  489,  15  S.  E. 
214. 

As  to  requisite  title,  possession,  etc.,  as  basis  of  action  generally,  see  ar- 
ticle "Ejectment"  by  Joseph  A.  Joyce  and  Howard  C.  Joyce.  15  Cyc. 
pp.  17  et  seq. 

10  Northern  Pacific  Rd.  Co.  v.  Miller,  20  Wash.  21,  54  Pac.  603. 

"  De  Lacey  v.  Northern  Pac.  R.  Co.  (U.  S.  C.  C.  A.),  72  Fed.  726,  19 
C.  C.  A.  157,  44  U.  S.  App.  257. 

12  Donohue  v.  El  Paso  &  Southwestern  Ry.  Co.,  214  U.  S.  499,  53  L.  ed.  1060, 
29  Sup.  Ct.  698,  relying  upon  Northern  Pacific  Ry.  Co.  v.  Smith,  171  U.  S. 
260,  43  U.  S.  157,  18  Sup.  Ct.  794;  citing  New  York,  City  of,  v.  Pine,  185 
U.  S.  93,  46  L.  ed.  820,  22  Sup.  Ct.  593;  Roberts  v.  Northern  Pacific  Ry. 
Co.,  158  U.  S.  1,  39  L.  ed.  873,  15  Sup.  Ct.  756. 

518 


ACTIONS    AT    LAW — LIABILITY,    GENERALLY  §  315 

the  statute  of  limitations. '-"'  The  owner  of  land  may  also  be  pre- 
cluded by  statutory  provisions  for  proceedings  for  assessment  of 
damages  and  the  charter  of  a  railroad  corporation,  from  main- 
taining ejectment  for  a  portion  of  a  right  of  way  of  a  corpora- 
tion with  power  to  obtain  the  same  by  condemnation,  gift  or 
purchase  and  who  has  acquired  it  by  purchase  from  a  regularly 
created  corporation.^"*  And  the  mere  ownershij)  of  the  shore, 
where  title  stops  at  the  water's  edge  by  reason  of  the  public 
character  of  such  water,  does  not  entitle  one  to  maintain  eject- 
ment to  obtain  possession  of  land  beyond  the  water's  edge.^^ 

In  a  Pennsylvania  case  a  railroad  company,  holding  town 
lots  adjoining  thoir  roadbed,  ostensibly  for  a  basin  to  connect 
with  river  navigation,  having  mortgaged  the  entire  road 
with  its  corporate  privileges  and  appurtenances,  but  without 
specific  mention  of  the  lots,  became  embarrassed,  under  pro- 
ceedings thereon  by  the  sheriff;  the  lots  having  been  sold 
under  execution  against  the  company  and  bought  by  the 
plaintiffs  therein,  in  an  ejectment  therefor  by  them  against 
the  purchasers  under  the  mortgage,  the  jury  were  instructed 
that  if  the  lots  were  not  appurtenant  to  the  road  and  essential 
and  indisputably  necessary  to  the  enjoyment  of  its  franchises, 
and  as  such  included  in  the  mortgage,  the  plaintiffs  were  en- 
titled to  recover,  referring  the  question  of  appurtenancy  and 
necessity  to  them  as  matters  of  fact.  It  was  held  that  the 
instruction  was  not  error.^^  If  telegraph  poles  are  placed  on  a 
public  highway  over  plaintiff's  land  and  no  compensation 
therefor  has  been  paid  ejectment  Hes  to  compel  the  removal 
of  such  poles.^^    So  a  purchaser  of  land  over  which  a  telegraph 

13  Atlanta,  K.  &  N.  Rd.  Co.  v.  Barker,  105  Ga.  534,  31  S.  E.  452. 

"  Saunders  v.  Memphis  &  R.  S.  R.  Co.,  101  Tenn.  206,  47  S.  W.  155. 

15  Illinois  Steel  Co.  v.  Bilot,  109  Wis.  418,  84  N.  W.  855,  rehearing  denied, 
85  N.  W.  402.  Land  covered  by  the  waters,  lakes  or  ponds,  or  by  water 
partaking  of  like  character  as  regards  public  rights,  though  in  form  con- 
veyed by  a  Federal  or  State  patent,  is  vested  in  the  State  the  same  after 
such  conveyance  as  before,  such  conveyance,  as  to  such  land,  being  abso- 
lutely void;  title  to  such  land  to  high  water  mark  enjoj^ed  to  same  extent  as 
were  tidal  waters  by  rules  of  common  law. 

leShamokin  Valley  Rd.  Co.  v.  Livermore,  47  Pa.  465. 

17  Postal  Teleg.  Cable  Co.  v.  Eaton,  170  111.  513,  49  N.  E.  365. 

510 


§  31()  ACTIONS    AT    LAW — LIABILITY,    GENERALLY 

company  has,  without  right,  constructed  its  lines  may  bring 
ejectment,  inasmuch  as  such  piu-chaser  succeeds  to  all  the 
grantor's  rights.^*  Where  a  statutory  remedy  is  made  ex- 
clusive of  all  other  remedies  and  land  has  been  appropriated 
by  a  levee  board,  ejectment  therefor  and  for  damages  cannot  be 
maintained. ^^  Where  the  plaintiffs'  case,  as  set  forth  in  their 
complaint  in  ejectment,  merely  states  a  reliance  on  the  Fifth 
Amendment  to  the  Constitution  and  on  a  certain  article  of  a 
treaty  and  the  Circuit  Court  decided  no  question  as  to  the 
application  or  construction  of  the  Constitution  or  the  validity 
or  construction  of  the  treaty  the  Federal  Supreme  Court  is 
without  jurisdiction  to  review  on  a  writ  of  error  the  action  of 
that  court.  A  case  may  be  said  to  involve  the  construction 
or  application  of  the  Constitution  of  the  United  States  when 
a  title,  right,  privilege  or  immunity  is  claimed  under  that  in- 
strument; but  a  definite  issue  in  respect  to  the  possession  of  the 
right  must  be  distinctly  deducible  from  the  record  before  the 
judgment  below  can  be  raised  on  the  ground  of  error  in  the 
disposal  of  such  a  claim  by  its  decision.  The  same  rule  is  ap- 
plicable to  a  treaty  .^*^ 

§  316.  Forcible  Entry  and  Detainer.^i 

There  is  nothing  in  the  nature  of  the  possession  of  a  rail- 
road, or  of  a  section  of  a  railroad,  which  takes  it  out  of  the 
operation  of  the  language  of  the  statutes  of  Arkansas  against 
forcibly  entry  and  detainer,  or  out  of  the  general  principle 
which  lies  at  the  foundation  of  all  suits  of  forcible  entry  and 
detainer,  that  the  law  will  not  sanction  or  support  a  possession 
acquired  by  violence,  but  will,  when  appealed  to  in  this  form 
of  action,  compel  the  party  who  thus  gains  possession  to  sur- 

Whether  additional  burden  on  abutting  owners  imposed  by  telegraph  and 
telephone  and  electric  railway  lines  in  street,  see  Joyce  on  Electric  Law 
(2d  ed.),  §§  295-348. 

18  Postal  Teleg.  Cable  Co.  v.  Eaton,  170  lU.  513,  49  N.  E.  365,  39  L.  R.  A. 
722. 

19  Owens  V.  Yazoo,  Mississippi  Delta  Levee  Rd.,  74  Miss.  269,  21  So.  12. 

20  Muse  V.  Arlington  Hotel  Co.,  168  U.  S.  430,  42  L.  ed.  531,  18  Sup.  Ct. 
109. 

21  See  §  313,  herein. 

520 


ACTIONS    AT    LAW — LIABILITY,    GENERALLY  §  317 

render  it  to  the  party  whom  he  diKspossessed,  without  inquiring 
which  party  owns  tlie  property  or  has  the  legal  right  to  the 
possession/^  So  where  a  statute  makes  one  guilty  of  forcible 
entry  and  detainer  without  regard  to  the  manner  of  his  acquir- 
ing real  property  where  he  unlawfully,  by  force,  menaces  and 
threats  of  violence,  retains  possession  of  and  holds  such  prop- 
erty, an  action  of  forcible  entry  and  detainer  may  be  main- 
tained against  a  corporation  where  it  keeps  possession  of  land 
for  two  years  after  judgment  against  it  for  possession,  and  for 
damages  for  unlawful  detainer,  and  after  demand  made  for 
the  possession  .^^ 

§  317.  Liability  of  Corporations  to  Third  Persons  for 
Negligent,  Willful,  Wanton  or  Malicious  Acts  of  Servants.^'^ 

It  may  be  stated  here  as  the  basis  of  remedies  against  a 
corporation  that  the  rules  as  to  the  hability  of  a  master  for  the 
negligence,  want  of  skill,  or  willful  acts  of  his  servant  apply 
equally  to  corporations  as  to  private  individuals.^^  So  for  the 
torts  of  a  servant  the  hability  of  a  railroad  company  is  limited 
to  those  done  within  the  scope  of  the  employment  in  further- 
ance of  its  business.^®  And  under  a  much  cited  and  rehed 
upon  case  in  the  Federal  Supreme  Court  a  master  is  liable  for 
the  tortuous  acts  of  his  servant,  when  done  in  the  course  of 
his  employment,  although  they  may  be  done  in  disobedience 
of  the  master's  orders.  Thus  where  a  suit  was  brought  against 
a  railroad  company,  by  a  person  who  was  injured  by  a  collision, 
it  was  correct  in  the  court  to  instruct  the  jury,  that,  if  the 

22  Iron  Mountain  &  Helena  R.  R.  v.  Johnson,  119  U.  S.  608,  30  L.  ed.  504, 
7  Sup.  Ct.  339. 

Degree  of  force  necessary  to  bring  entry  within  statute,  see  Smith  v.  Detroit 
Loan  &  B.  Assoc,  115  Mich.  340,  4  Det.  L.  N.  916,  73  N.  W.  395,  39  L.  R. 
A. 410. 

Sufficiency  of  title  or  possession  as  basis  of  action  of  forcible  entry  and  de- 
tainer, see  Chicago,  P.  &  St.  L.  Ry.  Co.  v.  Vaughn,  99  111.  App.  386;  Roch- 
ester V.  Gate  City  Mining  Co.,  86  Mo.  App.  447. 

23  Eccles  V.  Union  P.  Coal  Co.,  15  Utah,  14,  48  Pac.  148. 

24  See  §  313,  herein. 

25  Evansville  &  Crawfordsville  Rd.  Co.  v.  Baum,  26  Ind.  70.  See  also 
Central  of  Georgia  Ry.  Co.  v.  Brown,  113  Ga.  414,  .38  S.  E.  989. 

28  Jones  V.  Seaboard  Air  Line  Ry.  Co.,  150  N.  C.  473,  64  S.  E.  205. 

521 


§  317  ACTIONS    AT    LAW — LIABILITY,    GENERALLY 

plaintiff  was  lawfully  on  the  road,  at  the  time  of  the  collision, 
and  the  collision  and  consequent  injury  to  him  were  caused  by 
the  gross  negligence  of  one  of  the  servants  of  the  defendants, 
then  and  there  employed  on  the  road,  he  was  entitled  to  re- 
cover, notwithstanding  the  circumstances,  that  the  plaintiff 
was  a  stockholder  of  the  company,  riding  by  invitation  of  the 
president,  paying  no  fare,  and  not  in  the  usual  passenger  cars. 
And,  also,  that  the  fact  that  the  engineer  having  control  of 
the  colliding  locomotive,  was  forbidden  to  run  on  that  track  at 
the  time,  and  had  acted  in  disobedience  of  such  orders,  was  no 
defense  to  the  action.^''  Under  the  Louisiana  Civil  Code^*  the 
responsibihty  of  masters  is  confined  to  damages  occasioned  by 
their  servants  in  the  "exercise  of  the  functions  in  which  they 
are  employed,"  and  they  are  not  Hable  for  collateral  torts  com- 
mitted by  servants  while  attending  to  the  duties  of  their  em- 
ployment .^^ 

In  Minnesota  a  master  is  responsible  for  the  torts  of  his  serv- 
ant, done  in  the  course  of  his  employment  with  a  view  to  the 
furtherance  of  his  master's  business,  and  not  for  a  purpose  per- 
sonal to  himself,  whether  the  same  be  done  willfully,  but  within 
the  scope  of  his  agency,  or  in  excuse  of  his  authority,  or  con- 
trary to  the  express  instructions  of  the  master.^'' 

Under  a  New  York  case  the  rule  is  declared  that  for  acts  of 
the  servant  done  within  the  general  scope  of  his  employment 
and  while  engaged  in  the  master's  business,  and  done  with  a 
view  to  the  furtherance  of  that  business  and  the  master's  in- 
terest the  latter  will  be  responsible,  whether  the  act  be  done 
negligently,  wantonly,  or  even  willfully .^^ 

27  Philadelphia  &  Reading  R.  R.  Co.  v.  Derby,  14  How.  (55  U.  S.)  468, 
14  L.  ed.  502. 

28  Article  2320. 

29  Vara  v.  R.  M.  Quigley  Construction  Co.,  114  La.  261,  38  So.  102. 

30  Barrett  v.  Minneapolis,  St.  Paul  &  Sault  Ste.  Marie  Ry.  Co.,  106  Minn. 
51,  117  N.  W.  1047,  18  L.  R.  A.  (U.  S.)  416. 

31  Wallace  v.  John  A.  Casey  Co.,  116  N.  Y.  Supp.  394,  132  App.  Div.  35, 
41,  per  Miller,  J.,  citing  and  quoting  from  Mott  v.  Consumers'  Ice  Co.,  73 
N.  Y.  543.  The  company,  however,  in  the  principal  case,  was  held  not 
liable  under  the  rule  that  the  recipient  of  charity  assumes  the  risk  of  negli- 
gence of  the  donor's  servant. 

522 


ACTIONS    AT    LAW — LIABILITY,    GENERALLY  §  317 

Under  an  Ohio  decision  the  test  of  the  nui;sL{>r's  habihty  is 
not  whether  the  act  of  the  servant  was  done  during  the  exist- 
ence of  the  employment,  but  whether  it  was  done  while  engaged 
in  the  service  of  and  while  acting  for  the  master  in  the  prosecu- 
tion of  his  business.  If  not  so  employed  the  master  is  not 
liable  .^^ 

32  Lima  Ry.  Co.  v.  Little,  67  Ohio  St.  91,  65  N.  E.  861. 

When  corporation  not  liable  for  acts  of  servant;  injuries  to  third  persons,  see 
the  following  cases: 

United  States:  St.  Louis  Southwestern  Ry.  Co.  v.  Harvey,  144  Fed.  806, 
75  C.  C.  A.  536  (railroad  company  not  liable  for  servant's  acts  not  done 
within  the  scope  of  employment  nor  in  conducting  master's  business  nor  by 
acts  of  servant  in  using  master's  facilities  without  his  consent) ;  Bowen  v. 
Illinois  Cent.  R.  Co.,  186  Fed.  306,  69  C.  C.  A.  444. 

Alabama:  Palos  Coal  &  Coke  Co.  v.  Benson  (mem.),  145  Ala.  664,  39  So. 
727  (mining  company  not  liable  for  assault  committed  by  servant  when  not 
done  within  line  of  duties). 

Arkansas:  St.  Louis  &  San  Francisco  Rd.  Co.  v.  Wyatt,  84  Ark.  193,  105 
S.  W.  72  (carrier  not  liable  for  assault  by  servant  outside  of  scope  of  employ- 
ment and  done  when  not  on  duty) . 

Illinois:  Illinois  Steel  Co.  v.  Zolnowski,  118  111.  App.  209  (not  liable  un- 
less done  in  course  of  employment,  etc.);  Belt  Railway  Co.  v.  Banicki,  102 
111.  App.  642  (trespass  in  case  for  personal  injuries;  employment  of  watch- 
man to  keep  trespassers  away  does  not  give  authority  to  shoot  them;  master 
not  responsible  for  acts  of  servant  done  outside  of  master's  business  and  done 
to  accomplish  some  end  personal  to  servant). 

Indiana:  Louisville  &  Nashville  Rd.  Co.  v.  Gillen,  166  Ind.  321,  76  N.  E. 
1058  (master  not  liable  where  acts  of  servant  are  independent  of  his  em- 
ployment or  duty  or  of  his  master's  business);  Louisville,  New  Albany  & 
Chicago  Ry.  Co.  v.  Palmer,  13  Ind.  App.  161,  39  N.  E.  881,  41  N.  E.  400 
(not  liable  unless  done  within  scope  of  employment,  etc.,  damage  to  land  by 
fire). 

Kansas:  Hudson  v.  Missouri,  Kansas  &  Texas  Ry.  Co.,  16  Kan.  470  (mas- 
ter not  liable  unless  servant's  acts  done  within  scope  of  employment,  etc.; 
action  to  recover  from  railway  company  for  personal  injuries). 

Kentucky:  Mace  v.  Ashland  Coal  &  Iron  Ry.  Co.,  118  Ky.  885,  20  Ky.  L. 
Rep.  865,  82  S.  W.  612  (where  complaint  does  not  show  that  alleged  7nalicious 
or  mischievous  act  of  servant  was  connected  with  his  duty  to  master  or  done 
in  the  exercise  of  that  duty  no  cause  of  action  is  stated). 

Louisiana:  McDermott  v.  American  Brewing  Co.,  105  La.  124,  29  So.  498, 
S3  Am.  St.  Rep.  225,  52  L.  R.  A.  684  (assaidt  by  servant;  held  to  have  acted 
outside  of  scope  of  employment  and  company  not  liable) . 

Maine:  Moran  v.  Rockland,  Thomaston  &  Camden  St.  Ry.  Co.,  99  Me.  127, 
58  Atl.  176  (when  servant  acting  without  employer's  authority  and  beyond 
scope  of  employment  master  not  responsible;  action  on  case  for  negligence 
of  railroad  corporation  causing  injuries  and  death). 

523 


§  318  ACTIONS    AT    LAW — LIABILITY,    GENERALLY 

§  318.  Negligent  Acts  of  Corporations,  Generally.^' 

A  passenger  on  a  railroad  sued  it  and  its  receiver  in  an  ac- 
tion at  law  in  a  State  Court  to  recover  for  injuries  received 

Massachusetts:  Fairbanks  v.  Boston  Storage  Warehouse  Co.,  189  Mass. 
419,  75  N.  E.  7.37,  109  Am.  St.  Rep.  646  {assault  committed  by  servant;  not 
within  scope  of  his  employment;  company  not  liable);  Brown  v.  Boston  Ice 
Co.,  178  Mass.  108,  59  N.  E.  644,  86  Am.  St.  Rep.  469  (injury  inflicted  on 
children  done  outside  of  scope  of  employment;  master  not  liable). 

Michigan:  Wiltse  v.  State  Road  Bridge  Co.,  6.3  Mich.  639,  30  N.  W.  370 
(master's  responsibility  grows  out  of,  is  measured  by  and  begins  and  ends 
with  his  control  of  his  servant;  action  on  case;  bridge  corporation  held  not 
liable) ;  Wood  v.  Detroit  City  Ry.  Co.,  52  Mich.  402,  50  Am.  St.  Rep.  259,  18 
N.  W.  124  (corporation  not  liable  if  act  of  servant  was  willfid) ;  Chicago  & 
Northwestern  Ry.  Co.  v.  Bayfield,  37  Mich.  205  (master  not  liable  for  wrong 
intentionally  or  recklessly  done  by  servant  beyond  the  scope  of  his  business, 
that  is,  for  personal  trespass  or  tort  of  servant). 

Minnesota:  Slater  v.  Advance  Thresher  Co.,  97  Minn.  305,  107  N.  W.  133, 
56  R.  A.  (N.  S.)  598  (company  not  liable  for  wrongful  acts  of  servant  causing 
injury  when  done  outside  of  the  duty  for  which  employed);  Johnson  v. 
Pioneer  Fuel  Co.,  72  Minn.  405,  75  N.  W.  719  (corporation  not  hable  for 
assault  by  servant  not  done  in  scope  of  or  in  furtherance  of  corporation's 
business) ;  Peterson  v.  Western  Union  Teleg.  Co.,  72  Minn.  41,  74  N.  W.  1022, 
40  L.  R.  A.  661,  8  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  517  (telegraph  company 
not  liable  for  the  transmission  by  its  operator  of  a  libelous  message  if  act  law- 
ful). 

Mississippi:  Canton  Cotton  Warehouse  Co.  v.  Pool,  78  Miss.  147,  28  So. 
823,  84  Am.  St.  Rep.  620  (acts  of  servant  independent  of  business  or  em- 
ployment company  not  liable). 

Missouri:  Walker  v.  Hannibal  &  St.  Joseph  Rd.  Co.,  121  Mo.  575,  26 
S.  W.  360,  42  Am.  St.  Rep.  547,  24  L.  R.  A.  363  (railroad  company  not  lia- 
ble unless  servant's  tortious  acts  done  in  course  of  employment) ;  Haehl  v. 
Wabash  Rd.  Co.,  119  Mo.  325,  24  G.  W.  737  (company  not  liable  for  assault 
of  servant  not  done  in  scope  of  or  to  further  corporation's  business). 

New  Hampshire:  Rowell  v.  Boston  &  M.  R.  Co.,  68  N.  H.  358,  44  Act.  488 
(done  for  own  purpose  and  not  to  further  master's  orders  or  work;  master 
not  Uable). 

New  Jersey:  Kieman  v.  New  Jersey  Ice  Co.,  74  N.  J.  L.  175,  63  Atl.  998 
{assault  of  boy  on  ice  wagon  by  driver;  company  not  liable) ;  Hollie  v.  San- 
ford  Ross,  68  N;  J.  L.  324,  53  Atl.  472,  59  L.  R.  A.  943,  96  Am.  St.  Rep.  546, 
rev'g  67  N.  J.  L.  60,  50  Atl.  342  (plaintiff  was  shot  by  watchman;  nonsuit). 

New  York:  Sharp  v.  Erie  Rd.  Co.,  184  N.  Y.  100,  76  N.  E.  923.  See  Id., 
85  N.  Y.  Supp.  553,  90  App.  Div.  502  (railroad  company  not  liable  for  act 
of  detective  in  killing  boy  trespasser  where  act  was  malicious  or  to  affect  his 
own  purpose);  Hogle  v.  H.  H.  Franklin  Mfg.  Co.,  112  N.  Y.  Supp.  881,  128 
App.  Div.  403  (master  not  liable  for  malicious  acts  of  servants  unless  he  has 

33  See  §  313,  herein. 

524 


ACTIONS    AT    LAW — LIABILITY,    GENEIIALLY  §  318 

when  traveling  on  its  road  while  it  was  in  the  hands  of  the  re- 
ceiver. The  case  was  removed  to  the  Federal  Circuit  Court 
where  a  trial  was  had.    The  receivership  had  been  terminated 

knowledge  of  thereof  and  fails  to  use  reasonable  means  to  suppress  the 
same);  Franklin  v.  Brooklyn  Daily  Eagle,  99  N.  Y.  Supp.  300,  113  App. 
Div.  443  (newspaper  publisher  not  liable  for  assault  by  employ^  not  done 
within  scope  of  employment);  Feneran  v.  Singer  Mfg.  Co.,  47  N.  Y.  Supp. 
284,  20  App.  Div.  574  (assault  by  servant  committed  while  doing  act  con- 
trary to  instructions;  company  not  liable). 

North  Carolina:  Daniel  v.  Atlantic  Coast  Line  Rd.  Co.,  136  N.  C.  517,  48 
S.  E.  816,  67  L.  R.  A.  455  (action  for  malicious  prosecution  and  false  arrest 
and  imprisonment;  T-dilroad  company  not  liable  for  acts  of  agent  in  causing 
arrest  there  being  no  proof  of  previous  authority  or  of  ratification) . 

Rhode  Island:  Bemton  v.  James  Hill  Mfg.  Co.,  26  R.  I.  192,  58  Atl.  664 
(company  not  liable  for  willfrd  assault  not  done  in  performance  of  any  duty 
due  master). 

Soidh  Dakota:  Vi^aaler  v.  Great  Northern  Ry.  Co.,  18  S.  Dak.  420,  100 
N.  W.  1097,  112  Am.  St.  Rep.  794,  70  L.  R.  A.  731  (railroad  company  not 
liable  for  assault  committed  by  direction  of  servant  but  not  done  within 
scope  of  his  authority). 

Texas:  St.  Louis  Southwestern  Ry.  Co.  of  Texas  v.  Mayfield,  35  Tex.  Civ. 
App.  82  (railroad  company  not  liable  for  injury  to  trespasser  where  servant 
is  doing  something  master  has  not  ordered  done  or  to  exercise  discretion 
concerning;  burden  of  proof  on  plaintiff  to  show  wrongful  act  was  done  in 
prosecution  of  master's  business);  Lytle  v.  Crescent  News  &  Hotel  Co.,  27 
Tex.  Civ.  App.  530,  66  S.  W.  240  (master  not  liable  where  servant's  acts  in 
shooting  another  are  independent  of  employment  and  not  within  scope 
thereof) . 

Washington:  Robinson  v.  McNeill,  18  Wash.  163,  51  Pac.  355  (where  act 
of  servant  is  not  within  scope  of  authority  a  railroad  company  is  not  liable 
for  injuries  sustained  by  a  boy  falling  off  a  hand  car  loaned  by  said  servant) . 

When  corporation  liable  for  acts  of  servant;  injuries  to  third  persons,  see  the 
following  cases: 

United  States:  Pendleton  v.  Kinsley,  3  Cliff  (U.  S.  C.  C),  416,  Fed.  Cas. 
No.  10,922  (case  to  recover  damages  for  injuries  resulting  to  passenger 
from  assault  and  battery  inflicted  upon  him  by  steamboat  clerk.  The  prin- 
cipal in  this  class  of  cases  is  liable  for  misconduct  of  employe  when  it  oc- 
casions injury  to  the  passenger  whether  arising  from  malice  or  neglect). 

Alabama:  Palos  Coal  &  Coke  Co.  v.  Benson  (mem.),  145  Ala.  664,  39  So. 
727  (liable  for  torts  of  servants  done  or  caused  to  be  done  in  or  about  the 
duties  or  business  assigned  to  them);  City  Delivery  Co.  v.  Henry,  139  Ala. 
161,  34  So.  389  (master  liable  for  injuries  willfully  and  intentionally  inflicted 
by  servant  acting  within  scope  or  line  of  employment) . 

Arkansas:  Duggins  v.  Watson,  15  Ark.  118,  60  Am.  Dec.  560  (collision  of 
vessels  and  loss  of  cattle). 

California:  Maynard  v.  Firemen's  Fund  Ins.  Co.,  34  Cal.  48,  91  Am.  Dec. 
672. 

525 


§  318  ACTIONS    AT    LAW — LIABILITY,    GENERALLY 

before  the  commencement  of  the  action,  and  the  property  had 
by  order  of  the  court  been  transferred  to  the  company.  The 
company  contended  that  it  was  not  liable,  or,  if  liable,  that  the 
claim  could  only  be  enforced  in  equity.    The  trial  resulted  in  a 

Georgia:  Southern  Ry.  Co.  v.  James,  118  Ga.  340,  45  S.  E.  303,  63  L.  R.  A. 
257  (liable  for  wanton  and  reckless  act  of  servant  in  shooting  tramp  when  act 
done  to  further  master's  business  and  while  acting  under  authority  to  ar- 
rest persons  stealing  rides  on  trains). 

Illinois:  Illinois  Cent.  Ry.  Co.  v.  King,  179  111.  91,  53  N.  E.  552,  aff'g  77 
111.  App.  581  (liable  for  willful  and  malicious  act  of  servant  done  within 
scope  of  employment  and  duty);  Chicago,  Burlington  &  Quincy  Rd.  Co.  v. 
Sykes,  96  111.  162  (action  for  damages  against  railroad  company  tor  causing 
death  of  one  about  to  take  a  train);  Northwestern  Rd.  Co.  v.  Hack,  66  111. 
238  {boy  trespasser  injured  by  wrongful  act  of  servant  of  railroad  company) ; 
Chicago  Rd.  Co.  v.  Dickson,  63  111.  151,  14  Am.  St.  Rep.  114  {wanton  and  ma- 
licious acts  of  employee  of  railroad  company;  company  liable);  Toledo,  Wa- 
bash &  Western  Ry.  Co.  v.  Harmon,  47  111.  298,  95  Am.  Dec.  489  (injury 
caused  by  act  of  engineer  in  negligently  and  maliciously  letting  steam  escape, 
frightening  horses);  Ziegenhein  v.  Smith,  116  111.  App.  80  (trespass  for  as- 
sault committed  by  servant  to  further  purpose  for  which  employed) ;  Alton 
Ry.  &  Illuminating  Co.  v.  Cox,  84  111.  App.  202  (liable  for  torts  of  servant 
done  within  scope  of  employment). 

Indiana:  Pittsburg,  Cincinnati,  Chicago  &  St.  Louis  Ry.  Co.  v.  Sullivan, 
141  Ind.  83,  40  N.  E.  138,  50  Am.  St.  Rep.  313,  27  L.  R.  A.  840  (corporation 
liable  for  servant's  wrongful  or  willfrd  act  done  within  scope  of  general  author- 
ity although  indirectly  authorized) ;  Citizens'  Street  Rd.  Co.  of  Indianapolis 
V.  Willoeby,  134  Ind.  563,  33  N.  E.  627  (master  liable  when  servant  acting 
within  scope  of  employment  willfully  inflicts  injury  on  another);  Indiana, 
Bloomington  &  Western  Ry.  Co.  v.  Burdge,  94  Ind.  46  (allegation  that  in- 
jury to  passenger  on  railroad  was  caused  by  acts  of  company's  agent  done 
in  a  willfid,  reckless,  careless  and  unlawful  manner  is  good  on  demurrer,  but 
there  must  be  proof  that  act  was  willfid);  Pittsburg,  Cincinnati  &  St.  Louis 
Rd.  Co.  V.  Theobald,  51  Ind.  246  {injury  to  passenger);  Jeffersonville  Rd. 
Co.  V.  Rogers,  38  Ind.  116,  10  Am.  St.  Rep.  103  {ejection  of  passenger;  general 
rule  as  to  liability  of  corporation  for  agent's  acts  stated). 

Kentucky:  Sherley  v.  Billings,  71  Ky.  (8  Bush)  147,  8  Am.  St.  Rep.  451 
(steamboat  owners  liable  for  assault  upon  passenger  by  a  clerk  of  the  boat) ; 
Hawkins  &  Co.  v.  Riley,  56  Ky.  (17  B.  Mon.)  101  (proprietors  of  stage  coaches 
liable  for  recklessness  or  negligence  of  drivers) ;  Illinois  Cent.  Rd.  Co.  v.  Mar- 
tin, 33  Ky.  L.  Rep.  666  (liable  whether  act  of  is  negligent  or  wanton) ;  Lick- 
ing Rolling  Mill  Co.  v.  Fischer,  8  Ky.  L.  Rep.  89  {trespass  for  loss  by  fire; 
corporation  liable  for  servant's  wrongful  and  willfid  acts  done  within  scope 
of  employment  and  in  discharging  master's  business). 

Louisiana:  Keene  v.  Lizardi,  3  La.  273  [5  La.  (O.  S.)  431],  25  Am.  Dec. 
197  (owners  of  vessels — master  liable  for  inhuman  abuse  of  passenger),  Id., 
3  La.  505  [6  La.  (O.  S.)  315,  26  Am.  Dec.  478]. 

520 


ACTIONS    AT    LAW-    LIAIHLITV,    (5ENEUALLV  §  olS 

verdict  and  judgment  for  the  plaintiff.  It  was  held  that  the 
company  was  liable  to  the  plaintiff  in  an  action  at  law  for  the 
damages  found  by  the  jury;  that  as  the  railway  company  had 
procured,  or,  at  least,  acquiesced  in  the  withdrawal  of  the  re- 

Maine:  Goddard  v.  Grand  Trunk  R.  C'o.,  57  Me.  202,  2  Am.  St.  Rep.  39 
(common  carrier  of  passengers  responsible  for  willful  misconduct  of  servant 
towards  passenger). 

Maryland:  Baltimore  Consol.  Ry.  Co.  v.  Pierce,  89  Md.  495,  45  L.  R.  A. 
527,  4.3  Atl.  940  (injuries  sustained  through  alleged  negligence  of  motor- 
man;  rule  stated  that  willful  injury  done  by  servant  in  course  of  employ- 
ment renders  master  liable) . 

Massachusetts:  Aiken  v.  Holyoke  Street  Ry.  Co.,  184  Mass.  269,  68  N.  E. 
238  (tort  against  street  railway  company  for  personal  injuries  caused  by 
motorman;  reckless  or  willful  acts  of  servant  done  in  course  of  employment 
renders  master  liable);  Krulwitz  v.  Eastern  Rd.  Co.,  140  Mass.  573,  575, 
5  N.  E.  500  (tort  for  assaidt  and  false  imprisonment,  also  for  malicious  pros- 
ecution; passenger  prosecuted  by  conductor  of  railroad  for  fraudulently 
evading  fare;  "want  of  probable  cause  and  malice  on  the  part  of  the  con- 
ductor, if  established  may  be  imputed  to  corporation) ;  Reed  v.  Home  Sav. 
Bank,  130  Mass.  443,  445,  39  Am.  St.  Rep.  468;  (malicious  prosecution;  fraud 
or  malice  of  authorized  agents  imputed  to  corporation). 

Michigan:  Chicago  &  Northwestern  Ry.  Co.  v.  Bayfield,  37  Mich.  205 
(responsible  for  acts  of  servant  done  in  furtherance  of  master's  interests 
and  within  scope  of  his  business,  but  done  in  excess  or  even  disobedience  of 
his  orders). 

Minnesota:  Lesch  v.  Great  Northern  Ry.  Co.,  93  Minn.  435,  101  N.  W. 
965  (master  is  responsible  for  the  acts  of  his  servants  if  committed  with  a 
view  of  the  furtherance  of  the  master's  business,  whether  the  same  be  neg- 
ligently or  willfully  done;  corporation  liable  on  this  case  for  acts  of  trespass 
of  watchmen  employed  to  watch  its  property  and  search  for  same  when 
taken  away);  Peterson  v.  Western  Union  Teleg.  Co.,  72  Minn.  41,  74  N.  W. 
1022,  40  L.  R.  A.  661,  8  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  517  (telegraph  com- 
pany liable  for  the  transmission  by  its  operator  of  a  libelous  message  if  act 
wrongful,  and  this  is  so  irrespective  of  the  question  of  negligence). 

Mississippi:  Barmore  v.  Vicksburg,  Shreveport  &  Pacific  Ry.  Co.,  85 
Miss.  426,  70  L.  R.  A.  627,  38  So.  210  (railroad  company  held  liable  for 
servant's  gross  negligence  and  wanton  injury  to  trespasser  on  track;  master 
to  escape  liability  must  prove  that  servant  had  abandoned  duties  of  his  em- 
ployment and  gone  about  some  purpose  of  his  own  not  incident  to  but  in- 
dependent of  scope  of  employment) . 

Missouri:  Ephland  v.  Missouri  Pacific  Ry.  Co.,  137  Mo.  187,  37  S.  W.  820, 
35  L.  R.  A.  107,  50  Am.  St.  Rep.  498,  38  S.  W.  926  (railroad  company  held 
hable  for  acts  of  servant  though  not  done  in  performance  of  express  duty; 
master  liable  for  acts  of  servant  committed  in  course  of  employment); 
Haehl  v.  Wabash  Rd.  Co.,  119  Mo.  325,  24  S.  W.  737  (railroad  company 
liable  for  act  of  watchman,  whose  duty  was  to  keep  trespassers  off  defend- 

527 


§  318  ACTIONS    AT    LAW — LIABILITY,    GENERALLY 

ceivership  and  the  discharge  of  the  receiver,  and  the  cancella- 
tion of  the  bond,  and  had  accepted  the  restoration  of  its  road, 
largely  increased  in  value  by  the  betterments,  a  ground  was 

ant's  bridge,  in  shooting  and  killing  a  trespasser;  exemplary  damages  were 
awarded  under  code);  Malecek  v.  Tower  Grove,  etc.,  R.  Co.,  57  Mo.  17 
{assaiilt  and  abixse  of  passenger;  admissions  of  agent  when  binding) ;  Gillett  v. 
Missouri  Valley  R.  Co.,  55  Mo.  315,  17  Am.  Rep.  65.3  (malicious  prosecution 
by  railroad  company;  liability  for  agent's  malicious  acts). 

Nebraska:  Chicago,  Rock  Island  &  Pacific  Ry.  Co.  v.  Kerr,  74  Neb.  1, 
104  N.  W.  49  (personal  injuries  caused  by  negligence  of  railroad  company's 
servant;  company  liable  for  servant's  negligent,  wanton,  willful,  or  malicious 
acts  done  within  scope  of  employment  and  while  about  his  master's  business). 

Nevada:  Quigley  v.  Central  Pacific  R.  Co.,  11  Nev.  350,  21  Am.  St.  Rep. 
757  (railroad  corporation  liable  for  wanton  acts  of  agents,  per  Hawley,  C.  J.). 

New  Jersey:  Brokaw  v.  New  Jersey  R.  Co.,  32  N.  J.  L.  328,  90  Am.  Dec. 
659  (ejection  of  plaintiff /rom  railroad  car  by  servant  of  company). 

New  York:  Sharp  v.  Erie  Rd.  Co.,  184  N.  Y.  100,  76  N.  E.  923,  see  Id., 
85  N.  Y.  Supp.  553,  90  App.  Div.  502  (railroad  company  liable  for  act  of 
detective  in  killing  boy  trespasser  stealing,  where  act  done  within  scope  of 
employment  though  servant  exceeds  his  authority  or  disregards  orders) ; 
Mott  V.  Consumers'  Ice  Co.,  73  N.  Y.  543  (action  to  recover  damages  for  in- 
juries alleged  to  have  been  sustained  through  carelessness  of  driver  of  ice  cart 
of  company) ;  Shea  v.  Sixth  Avenue  Rd.  Co.,  62  N.  Y.  180,  20  Am.  St.  Rep. 
480  (street  car  stopped  so  as  to  obstruct  passage;  traveler  desiring  to  cross 
street  attempted  to  cross  over  car  platform  and  was  thrown  off  by  driver  of 
car);  Rose  v.  Imperial  Engine  Co.,  112  N.  Y.  Supp.  8,  127  App.  Div.  885 
(master  liable  for  acts  of  servant  or  agent  done  in  course  of  employment 
even  if  wanton  or  malicious.  Id.,  887) ;  Van  Sicklen  v.  Jamaica  Electric  Light 
Co.,  61  N.  Y.  Supp.  210,  45  App.  Div.  1,  aff'd  in  168  N.  Y.  650,  61  N.  E.  1135 
(for  acts  of  servant  in  injuring  property  where  act  done  within  scope  of  em- 
ployment) . 

North  Carolina:  Pierce  v.  North  Carolina  Rd.  Co.,  124  N.  C.  83,  32  S.  E. 
399,  44  L.  R.  A.  316  (where  act  of  servant  willful  and  malicious  but  is  done 
within  scope  of  employment  and  discharge  of  duties,  master  is  liable;  hoy 
frightened  by  brakeman  and  killed  by  train;  company  liable). 

Ohio:  Nelson  Business  College  Co.  v.  Lloyd,  60  Ohio  St.  448,  54  N.  E.  471, 
46  L.  R.  A..  314,  71  Am.  St.  Rep.  729  (employer  liable  for  willfid  or  malicious 
acts  of  his  servant  done  in  the  course  of  the  servant's  employment) ;  Stran- 
ahan  Brothers  Catering  Co.  v.  Coit,  55  Ohio  St.  398,  4  L.  R.  A.  506,  45 
N.  E.  634  (master  liable  for  servant's  malicious  acU  whereby  others  are  in- 
jured when  acts  done  are  within  scope  of  employment  and  in  execution  of 
services  for  which  he  was  engaged  by  master). 

Pennsylvania:  Pittsburg,  Alleghany  &  Manchester  Passgr.  Rd.  Co.  v.  Dona- 
hue, 70  Pa.  St.  119  (boy  riding  on  car  willfully  and  wantonly  struck  by  driver). 

Wisconsin:  Croker  v.  Chicago  &  Northwestern  Co.,  36  Wis.  657,  17  Am. 
St.  Rep.  504  (indecent  approach  and  assault  by  railroad  conductor  on  female 
passenger;  company  liable). 

528 


ACTIONS    AT    LAW — LIABILITY,    GENERALLY  §  319 

afforded  to  charge  an  assumption  of  such  valid  claims  against 
the  receiver  as  were  not  satisfied  by  him,  or  by  the  court  which 
discharged  him.^^ 

Payment  by  a  fire  insurance  company  of  a  claim  for  property 
destroyed  by  the  negligence  of  a  railroad  company,  is  not 
voluntary,  and  may  be  recovered  back,  where  the  insured  had 
previously  made  a  settlement  with  the  railroad  company,  re- 
ceiving payment  in  full,  which  fact  he  concealed  from  the  in- 
surance company,  although  the  latter  knew  that  he  was  making 
a  claim  against  the  railroad  company .^^ 

Evidence  of  negligence  as  a  warehouseman  does  not  warrant 
a  recovery  for  negligence  of  a  carrier  in  a  suit  against  the  latter 
on  bills  of  lading.^^ 

§319.  Election — Form  of  Action — Contract  or  Tort; 
Waiver.^^ 

There  may  be  a  waiver  and  a  suit  brought  either  in  contract 
or  tort  where  there  is  a  breach  of  contract  and  fraud .^^  So  it  is 
settled  that  for  negligence  by  a  common  carrier  in  transporting 
goods  intrusted  to  it  suit  may  be  brought  either  in  tort  or  con- 
tract for  damages  ^^  to  recover  for  injuries  sustained  by  a  pas- 
senger through  negligence  of  the  carrier;  '*"  and  for  ejection  of  a 
passenger .^^    Again,  a  tort  may  be  waived  and  a  suit  brought  in 

34  Texas  &  Pacific  Ry.  Co.  v.  Bloom,  164  U.  S.  636,  41  L.  ed.  580,  17  Sup. 
Ct.  216.  See  also  Texas  &  Pacific  Ry.  Co.  v.  Johnson,  151  U.  S.  81,  14  Sup. 
Ct.  250,  38  L.  ed.  81,  23  U.  S.  App.  143,  60  Fed.  979,  9  C.  C.  A.  300,  85  Tex. 
283,  20  S.  W.  133. 

35  Chickasaw  County  Farmers'  Mut.  F.  Ins.  Co.  v.  Weller,  98  Iowa,  731, 
68  N.  W.  443.  Action  at  law  to  recover  money  with  interest  thereon,  al- 
leged to  have  been  fraudulently  obtained. 

38  Gratiot  Street  Warehouse  Co.  v.  St.  Louis,  A.  &  T.  H.  R.  Co.,  221  111. 
418,  77  N.  E.  675,  aff'g  122  111.  App.  405. 

37  See  §  313,  herein. 

3«  Missouri  Savings  &  Loan  Co.  v.  Rice,  84  Fed.  131,  28  C.  C.  A.  305. 

39  Eckert  v.  Pennsylvania  Rd.  Co.,  211  Pa.  St.  267,  107  Am.  St.  Rep.  57, 
60  Atl.  781  (action  for  trespass).  See  also  Denman  v.  Chicago,  Burlington  & 
Quincy  Rd.  to.,  52  Neb.  140,  71  N.  W.  967. 

40  McMurtry  v.  Kentucky  Central  Rd.  Co.,  84  Ky.  462,  8  Ky.  L.  Rep.  462, 
IS.W.  815. 

«  Louisville  &  Nashville  Rd.  Co.  v.  Hine,  121  Ala.  234,  25  So.  857;  Chi- 
cago, Burlington  &  Quincy  Rd.  Co.  v.  Spirk,  51  Neb.  167,  70  N.  W.  926; 

34  529 


§  319  ACTIONS    AT    LAW — LIABILITY,    GENERALLY 

assumpsit; '^  or  on  special  contract;''^  or  on  an  implied  prom- 
ise.'*^ So  a  bailor  may  waive  the  tort  arising  out  of  the  duty  of 
a  bailee,  who  has  come  lawfully  into  the  possession  of  the 
former's  property,  and  sue  in  assumpsit  based  upon  the  bailee's 
implied  promise  under  the  bailment.'*^  The  tort  may  also  be 
waived  and  suit  brought  in  assumpsit,  where  there  is  a  con- 
version of  property;  ■^'^  where  there  is  a  trespass,  and  stone  is 
quarried  and  used  beneficially  so  that  it  is  unreclaimable;  "^^ 
where  there  has  been  an  embezzlement  or  misappropriation  by 
a  clerk  of  a  bank's  money;  ^^  where  there  has  been  a  misappli- 
cation by  a  bank  of  moneys  to  a  debt;^^  where  money  has  been 
fraudulently  obtained  from  a  bank;  ^^  where  suit  is  by  bank  de- 
positor for  amount  of  altered  checks  in  excess  of  sum  for  which 
actually  drawn;  ^^  and  where  goods  are  taken  in  trespass;  ^^ 
and  where  there  is  a  conversion  of  property ;  ^^  or  the  party  may 
waive  the  right  to  recover  in  trover  and  sue  on  implied  con- 

Lovings  V.  Norfolk  &  Western  Ry.  Co.,  47  W.  Va.  582,  35  S.  E.  962  ("civil 
action  for  the  recovery  of  money  due  for  damages  for  a  wrong;"  held  that 
plaintiff  could  recover  whatever  he  showed  himself  entitled  to  recover  in 
the  action  either  ex  contractu  or  ex  delicto). 

42  Shober  &  Carqueville  Lithographing  Co.  v.  Schedler,  63  111.  App.  48 
(conversion  of  goods). 

*3  Denman  v.  Chicago,  Burlington  &  Quincy  Rd.  Co.,  52  Neb.  140,  71 
N.  W.  967  (transportation  of  goods  by  carrier). 

«  Hirsch  v.  Leatherbee  Lumber  Co.,  69  N.  J.  L.  509,  55  Atl.  645  (con- 
version of  personal  property). 

«  De  Loach  Mill  Mfg.  Co.  v.  Standard  Sawmill  Co.,  125  Ga.  377,  54  S.  E. 
157. 

48  Farmers'  &  Merchants'  B;ink  v.  Bennett  &  Co.,  120  Ga.  1012,  48  S.  E. 
398. 

47  Phelps  v.  Church  of  Our  Lady  Help  of  Christians,  99  Fed.  683,  40  C.  C. 
A.  72. 

48  Lipscomb  v.  Citizens'  Bank  of  Galena,  66  Kan.  243,  71  Pac.  583. 

49  Winfield  National  Bank  v.  Railroad  Loan  &  Savings  Assoc,  71  Kan. 
58,  81  Pac.  202. 

50  Branch  Bank  at  Montgomery  v.  Parrish,  20  Ala.  433. 

51  Critten  v.  Chemical  National  Bk.,  171  N.  Y.  219,  232,  59  L.  R.  A.  529, 
modifying  70  N.  Y.  Supp.  246,  60  App.  Div.  241. 

52  Florida  Central  &  Pac.  Ry.  Co.  v.  Scarlett,  91  Fed.  349,  33  C.  C.  A.  554, 
under  Ga.  Code,  §  3811,  Code,  1882,  §  2955. 

53  Tidewater  Quarry  Co.  v.  Scott,  105  Va.  160,  164,  52  S.  E.  835,  115 
Am.  St.  Rep.  864. 

530 


ACTIONS    AT    LAW — LIAIULITY,    GENERALLY  §  319 

tract.^''  Again,  a  shipper  may  waive  the  contract  and  sue  the 
carrier  in  tort  to  recover  for  injury  caused  by  neghgcncc  to 
property  in  transit.^^    But  tort  for  a  trespass  on  land  cannot  be 

54  Sage  V.  Shepard  &  Morse  Lumber  Co.,  39  N.  Y.  Supp.  449,  9  App.  Div. 
290,  aff'd  in  (mem.)  158  N.  Y.  672,  52  N.  E.  1126. 

When  action  ex  contractu;  carriers: 

Alabama:  Seaboard  Air  Line  Ry.  v.  Hubbard,  142  Ala.  546,  38  So.  75U 
(breach  of  contract  for  affreightment  of  goods);  Nashville,  ('hattanooga  & 
St.  Louis  Ry.  Co.  v.  Parker,  123  Ala.  683,  27  So.  323  (injuries  to  horse  in 
transportation  and  unloading);  Louisville  &  Nashville  Rd.  Co.  v.  Brinker- 
hoff  &  Co.,  119  Ala.  528,  24  So.  885  (failure  to  deliver  goods);  Tallassee 
Falls  Mfg.  Co.  v.  Western  Ry.  of  Alabama,  117  Ala.  520,  23  So.  139,  67  A. 
S.  R.  179  (cotton  burned). 

Georgia:  Louisville  &  Nashville  Rd.  Co.  v.  Spinks,  104  Ga.  692,  30  S.  E. 
698  (breach  of  contract  to  transport  person). 

Kentucky:  Lexington  &  Eastern  Ry.  Co.  v.  Lyons,  104  Ky.  23,  28,  20  Ky. 
L.  Rep.  516,  46  S.  W.  209  (ejection  of  passenger);  Chicago  &  Eastern  Rd. 
Co.  V.  Chestnut  Bros.,  28  Ky.  L.  Rep.  404,  89  S.  W.  298  (delay  in  delivering 
shipment  of  poultry);  Louisville  &  Nashville  Rd.  Co.  v.  Wathen,  22  Ky.  L. 
Rep.  82,  49  S.  W.  185  (live  stock);  Spink  v.  Louisville  &  Nashville  Rd.  Co., 
21  Ky.  L.  Rep.  778,  52  S.  W.  1067  (when  on  contract  for  ejection  of  pas- 
senger) . 

Maryland:  Western  Maryland  Rd.  Co.  v.  Schawn,  97  Md.  563,  55  Atl. 
701  (ejection  of  passenger). 

Missouri:  Moffatt  Commission  Co.  v.  Union  Pacific  Ry.  Co.,  113  Mo. 
App.  544,  88  S.  W.  117  (when  not  liable  for  breach  of  contract;  destruction 
of  goods;  delayed  by  floods);  Gann  v.  Chicago  Great  Western  Ry.  Co.,  72 
Mo.  App.  34  (contract  to  furnish  cars). 

Nebraska:  Denman  v.  Chicago,  Burlington  &  Quincy  Rd.  Co.,  52  Neb. 
140,  71  N.  W.  967  (delay  in  transportation  of  cattle). 

New  York:  Busch  v.  Interborough  Rapid  Transit  Co.,  96  N.  Y.  Supp.  747, 
110  App.  Div.  705,  aff'd  in  187  N.  Y.  388,  80  N.  E.  197  (action  for  breach  of 
contract  and  not  for  assault  and  battery,  though  assault  committed); 
Spencer  v.  Wabash  Rd.  Co.,  55  N.  Y.  Supp.  948,  36  App.  Div.  446  (failure 
to  safely  transport  baggage;  action  on  special  contract). 

56  Waters  v.  Mobile  &  Ohio  Rd.  Co.,  74  Miss.  534,  21  So.  240. 

When  action  ex  delicto;  carriers: 

Alabama:  Southern  Ry.  Co.  v.  Bunnell,  138  Ala.  247,  254,  36  So.  380 
(ejection  of  passenger). 

California:  Gorman  v.  Southern  Pacific  Co.,  97  Cal.  1,  31  Pac.  1112  (ejec- 
tion of  passenger). 

District  of  Columbia:  Chesapeake  &  Ohio  Ry.  Co.  v.  Patton,  23  App.  D.  C. 
113  (injury  to  United  States  postal  clerk.  Examine  Martin  v.  Pittsburg  & 
Lake  Erie  Rd.  Co.,  203  U.  S.  284,  27  Sup.  Ct.  100,  31  L.  ed.  184,  aff'g  72 
Ohio  St.  659). 

Georgia:  Seals  v.  Augusta  Southern  Rd.  Co.,  102  Ga.  817,  29  S.  E.  116 
(carrying  passenger  past  station),  70  Ga.  368  (ejection  of  passenger). 

531 


§  319  ACTIONS    AT    LAW — LIABILITY,    GENERALLY 

waived  by  the  owner  and  a  suit  brought  against  the  trespasser 
on  contract  for  rent  or  for  use  and  occupancy .^^ 

Indiana:  Pittsburg,  Cincinnati,  Chicago  &  St.  Louis  Ry.  Co.  v.  Higgs, 
165  Ind.  694,  76  N.  E.  299,  4  L.  R.  A.  (N.  S.)  1081  (personal  injuries); 
Citizens'  Street  Rd.  Co.  of  Indianapolis  v.  Willoeby,  134  Ind.  563,  564, 
33  N.  E.  627  (injury  to  passenger  by  conductor  of  street  railway  company 
throwing  him  off  car) ;  Pittsburg,  Cincinnati,  Chicago  &  St.  Louis  Ry.  Co.  v. 
Call,  37  Ind.  App.  232,  76  N.  E.  816  (ejection  by  ticket  agent);  Pittsburg, 
Cincinnati,  Chicago  &  St.  Louis  Ry.  Co.  v.  Street,  26  Ind.  App.  224,  233, 
237,  59  N.  E.  404  (ejection  of  passenger);  Parrill  v.  Cleveland,  Cincinnati, 
Chicago  &  St.  Louis  Ry.  Co.,  23  Ind.  App.  638,  55  N.  E.  1026  (Hve  stock); 
Chicago,  St.  Louis  &  Pittsburg  Rd.  Co.  v.  Graham,  3  Ind.  App.  28,  29  N.  E. 
170  (not  ex  contractu;  injuries;  ejection  of  passenger). 

Kansas:  Atchison,  Topeka  &  Santa  Fe  Rd.  Co.  v.  Wilkinson,  55  Kan.  83, 
39  Pac.  1043  (baggage  of  passenger  injured  by,  accepted  and  retained  by 
him);  Atchison,  Topeka  &  Santa  Fe  Rd.  Co.  v.  Long,  5  Kan.  App.  644,  47 
Pac.  993  (ejection  of  passenger). 

Massachusetts:  Robinson  v.  Northampton  St.  Ry.  Co.,  157  Mass.  224,  32 
N.  E.  1  (failure  of  street  car  to  stop;  personal  injuries). 

Montana:  Nelson  v.  Great  Northern  Ry.  Co.,  28  Mont.  297,  72  Pac.  642 
(delay  of  live  stock). 

Nebraska:  Fremont,  Elkhorn  &  Missouri  Valley  Rd.  Co.  v.  Hagblad,  72 
Neb.  773,  101  N.  W.  1033,  1041,  4  L.  R.  A.  (N.  S.)  254  (not  an  action  on 
contract  nor  an  action  at  common  law  stated;  personal  injury). 

New  Jersey:  Ferine  v.  North  Jersey  Street  Ry.  Co.,  69  N.  J.  L.  230,  54 
Atl.  799  (ejection  of  passenger;  not  limited  to  action  on  contract  but  has 
one  in  tort). 

New  York:  Eddy  v.  Syracuse  Rapid  Transit  Ry.  Co.,  63  N.  Y.  Supp.  645, 
50  App.  Div.  109  (ejection  of  passenger). 

Ohio:  Pittsburg,  Cincinnati  &  St.  Louis  Ry.  Co.,  55  Ohio  St.  370,  13  Ohio 
Cir.  Ct.  R.  39,  45  N.  E.  712,  60  Am.  St.  Rep.  706  (ejection  of  passenger); 
Toledo  &  Ohio  Central  Ry.  Co.  v.  Marsh,  17  Ohio  Cir.  Ct.  R.  379,  9  O.  C.  D. 
548  (ejection  of  passenger). 

South  Carolina:  Pickens  v.  South  Carolina  &  Georgia  Rd.  Co.,  54  S.  C. 
498,  32  S.  E.  567  (failure  to  carry  person  to  destination). 

Texas:  San  Antonio  &  Arkansas  Pass  Ry.  Co.  v.  Graves  (Tex.  Civ.  App., 
1899),  49  S.  W.  1103  (delay  in  shipping  goods) ;  Marchand  Central  Ry.  Co.  v. 
Goodman,  20  Tex.  Civ.  App.  109,  48  S.  W.  778  (ejection  of  passenger). 

Wisconsin:  McKeon  v.  Chicago,  Milwaukee  &  St.  Paul  Ry.  Co.,  94  Wis. 
477,  69  N.  W.  175,  35  L.  R.  A.  252,  59  Am.  St.  Rep.  910  (personal  injuries 
and  maltreatment  of  passenger  occupying  berth;  failure  to  awaken  and  then 
hurrying  out  at  station;  miscarriage). 

56  Commonwealth  Title  Ins.  &  Trust  Co.  v.  Dokko,  71  Minn.  533,  74 
N.  W.  891. 


532 


ACTIONS  AT  LAW  CONTINUED — ACTIONS   EX   CONTRACTU    §  320 


CHAPTER  XIX 

ACTIONS  AT  LAW  CONTINUED — ACTIONS  EX  CONTRACTU 

§  320.  Action    Ex    Contractu — Con-  §  323.  Assumpsit    By    and    Against 
tracts    Express    and     Im-                     Banks, 

plied — Instances,       Gener-  324.  Debt, 

ally.  325.  Covenant. 

321.  Assumpsit.  326.  Book  Account. 

322.  Assumpsit — Account    Stated. 

§  320.  Action  Ex  Contractu — Contracts  Express  and  Im- 
plied— Instances,  Generally.^ 

The  rule  is  settled  in  Missouri  that  an  action  for  damages  on 
an  attachment  bond,  though  it  requires  the  commission  of  a 
tort  to  constitute  a  breach  of  the  contract,  nevertheless  is  an 
action  ex  contractu,  not  ex  delicto.^  So  an  action  to  recover  for 
the  removal  of  timber  from  the  mortgaged  premises  by  the  pur- 
chaser, pending  disaffirmance  of  the  mortgage  sale  and  re- 
demption thereunder,  is  ex  contractu  and  not  ex  delicto.^  And 
where  a  company  contracted  to  construct  an  electric  light  plant 
for  a  city  in  a  workmanlike,  safe  and  skillful  manner,  according 
to  plans  and  specifications  agreed  upon  by  the  defendant  and 
the  plaintiff;  that  in  the  erection  of  j^oles,  stringing  wires  and 
placing  arc  lamps,  it  would  use  the  best  material  and  have 
perfect  insulation  in  the  transmission  of  the  electric  current; 
that  each  cross-arm  should  be  provided  with  its  full  number  of 
pins  and  insulators,  whether  required  by  the  number  of  wires 
or  not;  and  in  consequence  of  a  breach  of  such  agreement  the 
city  had  suffered  damage  by  being  compelled  to  pay  for  an  in- 

1  See  §  313,  herein. 

2  State  ex  rel.  Hinde  v.  United  States  Fidelity  &  Guaranty  Co.,  135  Mo. 
App.  160,  115S.  W.  1081. 

3  Richardson  v.  McCreary  &  Co.,  158  Ala.  65,  48  So.  341. 

533 


§  320  ACTIONS  AT  LAW  CONTINUED — 

jury,  and  sues  to  recover  from  defendant  the  amount  which  it 
had  been  obhgated  to  so  pay,  the  action  is  one  for  breach  of  the 
company's  contract  and  not  an  action  sounding  in  tort  for  negU- 
gence  for  which  the  city  was  the  sufferer."* 

In  a  case  in  the  Federal  Supreme  Court  an  agreement  in  writ- 
ing between  a  mining  company  and  a  machinist  stated  that 
while  in  its  employ  he  was  seriously  hurt  under  circumstances 
which  he  claimed,  and  it  denied,  made  it  liable  to  him  in  dam- 
ages; that  six  months  after  the  injury,  both  parties  being 
desirous  of  settling  his  claim  for  damages,  the  company  agreed 
to  pay  him  regular  wages  and  to  furnish  him  with  certain  sup- 
plies while  he  was  disabled,  and  carried  out  that  agreement  for 
six  months,  at  the  end  of  which,  after  he  had  resumed  work,  it 
was  agreed  that  the  company  should  give  him  such  work  as 
he  could  do,  and  pay  him  wages  as  before  his  injury,  and  this 
agreement  was  kept  by  both  parties  for  a  year;  and  then,  in  lieu 
of  the  previous  agreements,  a  new  agreement  was  made  that  his 
wages  "from  this  date"  should  be  a  certain  sum  monthly,  and 
he  should  receive  certain  supplies,  and  he  on  his  part  released 
the  company  from  all  liability  for  his  injury,  and  agreed  that 
this  should  be  a  full  settlement  of  all  his  claims  against  the 
company.  It  was  held  that  the  last  agreement  was  not  termina- 
ble at  the  end  of  any  month  at  the  pleasure  of  the  company,  but 
bound  it  to  pay  him  the  wages  stipulated,  and  to  furnish  him  the 
supplies  agreed  as  long  as  his  disability  to  do  full  work  con- 
tinued; and  that,  if  the  company  discharged  him  from  its  serv- 
ice without  cause,  he  was  entitled  to  elect  to  treat  the  contract 
as  absolutely  and  finally  broken  by  the  company,  and,  in  an 
action  against  it  upon  the  contract,  to  introduce  evidence  of 
his  age,  health  and  expectancy  of  life,  and,  if  his  disability  was 
permanent,  to  recover  the  full  value  of  the  contract  to  him  at 
the  time  of  the  breach,  including  all  that  he  would  have  re- 
ceived in  the  future  as  well  as  in  the  past  if  the  contract  had 
been  kept,  deducting,  however,  any  sum  that  he  might  have 
earned  already  or  might  thereafter  earn,  as  well  as  the  amount 

*  Owensboro,  City  of,  v.  Westinghouse,  Church,  Kerr  &  Co.  (U.  S.  C.  C.  A.), 
165  Fed.  :«5,  91  C.  C.  A.  335. 

534 


ACTIONS  EX  CONTRACTU  §  320 

of  any  loss  that  the  defendant  sustained  by  the  loss  of  his  serv- 
ices without  its  fault.^ 

In  a  New  York  case  an  action  was  brought  to  recover  for 
moneys  expended  and  services  rendered  by  plaintiff  at  the 
alleged  request  of  defendant,  and  for  its  use  and  benefit.  Plain- 
tiff was,  without  fault  on  his  part,  denied  the  claimed  contract, 
although  he  was  able  and  willing  to  perform  it.  In  the  action 
to  recover  for  his  services  and  expenses,  it  was  held  that  by 
certain  acts  of  the  defendant's  board  of  directors,  the  negoti- 
ations with  the  plaintiff  might  be  deemed  to  have  been  recog- 
nized, and,  in  some  sense,  treated  as  having  been  made  on  be- 
half of  defendant;  that  plaintiff  had  a  right  to  assume  that  the 
persons  with  whom  he  negotiated  legitimately  represented  de- 
fendant; that  this,  together  with  the  fact  that  the  moneys 
expended  were  for  the  benefit  of  defendant,  justified  a  finding 
of  an  agreement  between  plaintiff  and  defendant  that  he  should 
have  the  contract  and  that  the  services  were  rendered  and  ex- 
penses incurred  at  the  request  of  defendant,  and  that  such  find- 
ings were  sufficient  to  sustain  a  recovery.^ 

But  in  an  Iowa  case  it  appeared  that  the  defendant  corpora- 
tion and  an  improvement  company  employed  the  same  secre- 
tary and  treasurer,  though  in  no  other  wise  connected.  Plain- 
tiff contracted  with  the  improvement  company,  and  a  third 
person,  to  construct  a  tile  drain  on  property  belonging  to  the 
improvement  company.  Plaintiff  also  contracted  with  the 
defendant  to  construct  a  tile  drain  on  its  land,  adjoining  that 
of  the  improvement  company.  The  bills  were  presented  to  the 
secretary  of  both  companies,  who,  in  payment  thereof,  gave  a 
note  signed  by  the  improvement  company,  for  the  amount  due 
for  the  construction  of  both  drains.  The  order  issued  by  the 
defendant  corporation  upon  its  contract  with  plaintiff,  was  in- 
dorsed by  plaintiff,  and  surrendered  to  the  secretary,  as  an 

5  Pierce  v.  Tenn.  Coal,  Iron  &  R.  R.  Co.,  173  U.  S.  1,  43  L.  ed.  591,  19 
Sup.  Ct.  335,  5  Am.  Neg.  Rep.  747,  rev'g  81  Fed.  814,  52  U.  S.  App.  355, 
26  C.  C.  A.  6.32,  8  Am.  &  Eng.  R.  Cas.  (N.  S.)  742. 

8  Wilson  V.  Kings  County  Elevated  Rd.  Co.,  114  N.  Y.  487,  24  N.  Y.  St. 
Rep.  81,  21  N.  E.  1015. 

535 


§  321  ACTIONS  AT  LAW  CONTINUED — 

officer  of  the  improvement  company,  and  was  subsequently 
paid  by  the  treasurer  of  the  defendant  to  the  improvement 
company.  It  appeared  that  in  all  these  transactions  the  plain- 
tiff supposed  that  there  was  but  one  company,  the  defendant, 
with  which  it  was  deahng;  but  it  did  not  appear  that  there  was 
any  misrepresentation,  deceit  or  fraud,  on  the  part  of  the  de- 
fendant, or  its  officers.  It  was  held  that  a  verdict  for  defend- 
ant was  properly  directed.'^  Unless  a  check  drawn  upon  a  bank 
is  accepted  or  the  bank  notified  no  action  lies  against  the 
drawee.^ 

If  a  railway  company  abandons  part  of  its  line  and  ceases  to 
maintain  a  piece  of  track  which  it  had  contracted  to  maintain, 
it  has  the  right  to  do  so,  subject  to  the  payment  of  damages  for 
the  violation  of  the  contract;  to  be  recovered,  if  necessary,  in  an 
action  at  law.^ 

§  321.  Assumpsit.!" 

Assumpsit  may  be  maintained  by  a  corporation.^^  And  an 
action  on  assumpsit  may  also  be  maintained  against  a  corpora- 
tion aggregate  founded  upon  its  acts  done  within  the  lawful 
purposes  for  which  it  was  organized.!^    So  whenever  a  corpo- 

7  Scoville  Plumbing  Co.  v.  Highland  Park  Land  Co.,  99  Iowa,  303,  68 
N.  W.  684. 

8  State  ex  rel.  St.  Amand  v.  Bank  of  Commerce,  49  La.  Ann.  1060,  22 
So.  207. 

8  Hoard  v.  Chesapeake  &  O.  Ry.,  123  U.  S.  222,  31  L.  ed.  130,  8  Sup.  Ct. 
74. 

10  See  §  313,  herein. 

11  Beene  v.  Cahaba  &  Macon  R.  Co.,  3  Ala.  660  (a  corporation  may  main- 
tain assumpsit  upon  a  contract  to  take  its  stock  at  a  specific  price) ;  Metho- 
dist Episcopal  Church  v.  Wood,  5  Ohio  (5  Ha.),  283,  Id.,  Wright,  12  ["no 
reasoning  will  be  required  of  us,  to  prove,  that  one  individual  corporator 
may  be  made  liable  at  law,  to  the  corporation  of  which  he  is  a  member,  in 
the  same  way  that  every  other  individual  would  be."  Id.,  288  (side  page  287) 
per  Wright,  J.    A  case  of  assumpsit  for  money  had  and  received]. 

12  United  States:  Chesapeake  &  Ohio  Canal  Co.  v.  Knapp,  34  U.  S.  (9  Pet.) 
541,  9  L.  ed.  222;  Bank  of  Columbia  v.  Patterson,  11  U.  S.  (7  Cranch)  299, 
3  L.  ed.  .351. 

Maryland:  Cape  Sable  Company's  Case,  3  Bland  (Md.),  606. 
Massachusetts:  Hayden  v.  Middlesex  Turnpike,  10  Mass.  397,  6  Am.  Dec. 
143. 

536 


ACTIONS   EX  CONTRACTU  §  321 

ration  aggregate  is  acting  within  the  scope  of  the  legitimate 
purposes  of  its  institution,  all  parol  contracts  made  by  its  au- 
thorized agents  are  express  promises  of  the  corporation;  and  all 
duties  imposed  on  them  by  law,  and  all  benefits  conferred  at 
their  request,  raise  imphed  promises,  for  the  enforcement  of 
which  an  action  lies.  So  upon  a  special  contract,  executed  on 
the  part  of  the  plaintiff,  indebitatus  assumpsit  will  lie  for  the 
price.^^  Assumpsit  cannot,  however,  be  sustained  unless  there 
is  an  express  contract  or  the  facts  are  such  that  the  law  will 
imply  a  contract.^'*  Indebitatus  assumpsit  lies  for  the  recovery 
of  dues  which  are  owing  to  an  association  in  accordance  with  its 

Michigan:  Hart  Mfg.  Co.  v.  Maim's  Boudoir  Car  Co.,  65  Mich.  564,  32 
N.  W.  820  (assumpsit  was  brought,  but  the  only  question  was  to  whom  were 
the  goods  sold  and  credit  given). 

New  Jersey:  Antopoeda  Baptist  Church,  Trustees  of,  v.  Mulford,  8  N.  J. 
L. 182. 

New  York:  Dunn  v.  Rector,  etc.,  of  St.  Andrew's  Church,  14  Johns. 
(N.  Y.)  118;  Danforth  v.  Scholarie  Turnpike  Co.,  12  Johns.  (N.  Y.)  227. 

Pennsylvania:  Chestnut  Hill  &  Spring  House  Turnpike  Co.  v.  Rutter,  4 
Serg.  &  R.  (Pa.)  6,  16,  8  Am.  Dec.  675,  per  Gibson,  J.,  relying  upon  the  lan- 
guage of  Judge  Story  in  Bank  of  Columbia  v.  Patterson,  7  Cranch  (11  U.  S.), 
299;  Overseers  of  Poor  of  North  Whitehall  Twp.  v.  Overseers  of  Poor  of 
South  Whitehall  Twp.,  3  Serg.  &  R.  (Pa.)  117. 

South  Carolina:  Waring  v.  Catawba  Co.,  2  Bay  (S.  C),  109  (assumpsit 
for  goods  sold  and  for  work  and  labor,  etc.). 

Texas:  San  Antonio,  City  of,  v.  Lewis,  9  Tex.  69  (all  parol  contracts  made 
by  the  authorized  agents  of  a  corporation,  within  the  scope  of  the  legiti- 
mate purposes  of  its  institution  are  express  promises  of  the  corporation ;  and 
all  duties  imposed  upon  them  by  law,  and  all  benefits  conferred  at  their  re- 
quest, raise  implied  premises  for  the  enforcement  of  which  an  action  will 
lie). 

Vermont:  Proctor  v.  Webler,  1  D.  Chip.  (Vt.)  371;  Id.,  456,  note;  Poultney 
v.  Wills,  1  Aiken  (Vt.),  180  (for  money  had  and  received  lies  against  a  cor- 
poration, same  as  against  an  individual). 

13  Bank  of  Columbia  v.  Patterson,  7  Cranch  (11  U.  S.),  299,  3  L.  ed.  351. 

M  Reilly  v.  Crown  Petroleum  Co.,  213  Pa.  St.  595,  63  Atl.  253.  The  court, 
per  Mestrezat,  J.,  said:  "It  is  therefore  clear  that  assumpsit  will  not  lie. 
This  action  cannot  be  sustained  unless  there  was  an  express  contract  or  the 
law  will  imply  a  contract;  Bethlehem  Borough  v.  Perseverance  I'ire  Co.,  81 
Pa.  St.  445;  McClosky  v.  Miller,  72  Pa.  St.  151.  Here,  it  is  admitted,  there 
was  no  contractual  relation  between  the  parties.  It  is  also  clear  that  the 
facts  attending  the  possession  of  the  premises  and  the  taking  of  the  oil  by 
the  defendant  company  are  not  such  that  the  law  will  imply  a  contract  on 
the  part  of  the  defendant  company  to  pay  for  the  oil  which  it  look.     On  the 

537 


§  321  ACTIONS   AT  LAW   CONTINUED — 

by-lavva.'^  So  a  corporation  may  be  liable  in  assumpsit  for 
work  and  labor  done.^*^  So  a  turnpike  corporation  may  be  sued 
for  work  and  labor  performed  and  materials  furnished.^'  A 
party  to  a  contract  can  also  sue  on  a  quantum  meruit  for  the 
value  of  services  performed  or  can  bring  an  action  on  the  con- 
tract for  damages  where  the  wrongful  act  of  the  other  party 
to  said  contract  has  prevented  its  full  performance.^*  And 
where  the  defendant  has  prevented  the  completion  of  work  for 
which  the  plaintiff  had  transported  labor  and  material  to  per- 
form and  was  not  in  default,  an  action  quantum  meruit  may  be 
maintained.'^  An  original  action  may  be  maintained  against 
a  corporation,  pubHc  or  private,  upon  a  claim  which  its  proper 
auditing  board  has  refused  to  allow  in  whole  or  in  part,  unless 
the  statute  has  provided  or  directed  other  proceedings  to  enforce 
it.^"  Where  the  consideration  of  a  contract  for  the  sale  and  con- 
veyance of  land  has  wholly  failed,  assumpsit  is  the  appropriate 
action  to  recover  back  money  paid  under  the  contract,  al- 
though the  contract  be  under  seal.^^  But  a  plaintiff  who  by 
ejectment  has  recovered  possession  of  land  cannot  maintain 
an  action  of  assumpsit  for  the  value  of  oil  mined  upon  the  land 
by  the  defendant  while  in  possession.^^  And  a  corporation  can- 
contrary,  the  facts  repel  any  inference  of  an  agreement  on  the  part  of  the 
defendant  company  to  pay  for  the  oil  taken  by  it,  and  conclusively  show- 
that  the  defendant  company  had  the  actual  adverse  possession  of  the  land 
for  oil  purposes  during  the  time  the  oil  was  taken  from  it.  Under  such 
circumstances,  the  law  will  not  imply  a  contract  by  the  occupant  to  pay  for 
the  profits  of  the  land  taken  during  his  adverse  possession  of  the  property." 

15  Elm  City  Club  v.  Howes,  92  Me.  211,  42  Atl.  392. 

16  Underwood  v.  Newport  Lyceum,  1  Fla.  129,  41  Am.  Dec.  260. 

17  Dunningtons  v.  Pres.  &  Dir.  N.  W.  Turnpike  Road,  6  Gratt.  (Va.)  160. 

18  Welston  Coal  Co.  v.  FrankUn  Paper  Co.,  57  Ohio  St.  182,  39  Ohio  L. 
J.  16,  48  N.  E.  888. 

i«  Southern  Pacific  Co.  v.  American  Well  Works,  172  111.  9,  49  N.  E.  575, 
aff'g  67  111.  App.  512. 

20  Willow  Springs  Irrigation  Dist.  v.  Wilson,  74  Neb.  269,  104  N.  W.  165, 
a  case  of  an  action  by  a  civil  engineer  to  recover  from  the  corporation  the 
value  of  services  rendered  under  a  written  contract. 

21  Newberry  Land  Co.  v.  Newberry,  95  Va.  Ill,  3  Va.  Law  Reg.  584,  27 
N.  E.  899 

22  Reilly  v.  Crown  Petroleum  Co.,  213  Pa.  St.  .595,  63  Atl.  253.  The  court, 
per  Mestrezat,  J.,  said:  "This  question  is  settled  alike  by  reason  and  au- 

538 


ACTIONS  EX  CONTRACTU  §  321 

not  sue  to  recover  money  paid  by  others  upon  a  contract,  the 
consideration  whereof  has  wholly  failed,  where  it  appears  that 
at  the  time  of  the  contract  the  corporation  was  not  in  existence, 
the  money  was  not  paid  by  or  for  it,  or  for  any  of  its  liabilities, 
and  the  contract  was  not  made  for  its  benefit,  but  wholly  for 
the  benefit  of  the  parties  to  the  contract,  and  there  has  been 
no  subsequent  assignment  to  it,  or  acceptance  by  it,  of  the 
benefit  of  the  contract.^^  Where  a  contract  is  ultra  vires,  and  a 
corporation  has  received  money  under  it  which  in  equity  and 
good  conscience  belongs  to  another  and  which  it  ought  to  pay 
over,  it  is  liable  for  it  in  an  action  for  money  had  and  received, 
with  interest  after  demand.^    Where  a  building  and  loan  as- 

thority.  A  plaintiff  cannot  maintain  an  action  of  ejectment  when  he  is 
in  possession  of  the  premises.  In  bringing  the  action  of  ejectment,  there- 
fore, the  plaintiffs  admitted  the  defendant  in  possession  of  the  land  at  least 
for  the  purpose  of  mining  and  producing  oil  and  removing  it  from  the  prem- 
ises. The  action  resulted  in  a  judgment  ousting  the  defendant  company 
from  the  possession  for  oil  purposes  which  must  be  regarded  as  having  been 
held  adversely  to  the  plaintiffs.  During  the  time  defendant  company  held 
possession,  it  drilled  the  well  and  took  the  oil  for  which  this  action  was 
brought.  It  is  the  profits  or  proceeds  of  the  land  taken  by  the  defendant 
during  its  adverse  holding  of  the  premises  which  the  plaintiffs  have  the 
right  to  recover.  *  *  *  It  is  well  settled  by  a  long  line  of  decisions  of 
this  court  that  after  a  recovery  in  ejectment,  trespass  is  the  proper  remedy 
to  recover  mesne  profits  of  land  taken  by  an  adverse  claimant  in  possession 
of  the  premises." 

23  Newberry  Land  Co.  v.  Newberry,  95  Va.  Ill,  3  Va.  Law  Reg.  584,  27 
S.  E.  899. 

24  Leigh  V.  American  Brake-Beam  Co.,  205  III.  147,  68  N.  E.  713.  The 
court,  per  Cartwright,  J.  (at  p.  152),  after  discussing  the  ultra  vires  nature 
of  the  contract  and  stating  the  law  concerning  such  contracts,  said :  "  That 
rule  of  law,  however,  does  not  prevent  a  recovery  from  the  defendant  of 
the  moneys  of  the  plaintiff  received  by  him.  Although  a  party  is  not  liable 
to  pay  according  to  a  contract  which  is  ultra  vires,  that  fact  is  not  permitted 
to  work  injustice  where  the  law  can  afford  a  remedy  without  enforcing  the 
illegal  contract,  and  the  courts  will  give  relief  where  it  can  be  given  inde- 
pendently of  the  contract.  It  would  be  unjust  to  hold  that  one  who  has 
received  money  or  property  under  a  contract  which  is  ultra  vires  need  not 
account  for  it  because  the  contract  was  illegal,  but  the  law  implies  a  contract 
to  return  what  has  been  received.  Where  a  contract  is  not  malum  in  se  or 
malum  prohibitum,  and  it  has  been  executed  or  benefits  have  been  received, 
the  party  benefited,  whether  the  corporation  or  individual,  will  not  be  per- 
mitted to  retain  the  fruits  of  the  transaction  without  compensation." 

539 


§§  322,  323        ACTIONS  at  law  continued — 

sociation  refuses  to  pay  stockholders  the  withdrawal  value  of 
shares  of  stock  assumpsit  may  properly  be  brought  to  recover 
such  value .^^  An  action  by  a  municipal  corporation  to  recover 
from  a  street  railroad  company  the  cost  of  maintaining  pave- 
ments in  a  street,  which  the  company  is  by  its  charter  bound  to 
maintain,  is  an  action  in  assumpsit.^® 

§  322.  Assumpsit — Account  Stated.^^ 

A  certificate  of  a  road  master,  who  is  authorized  to  issue  it, 
that  the  bearer  is  entitled  to  a  specific  sum  for  labor  performed, 
and  its  acceptance  by  the  laborer,  constitute  an  account  stated, 
on  which  an  action  may  be  maintained  by  the  laborer,  or  his 
assignee,  against  the  railroad  company,  as  upon  an  implied 
promise  to  pay  it,  without  reference  to  the  items  of  the  original 
account.^* 

§  323.  Assumpsit  By  and  Against  Banks.^^ 
Assumpsit  may  be  maintained  by  a  national  bank.  Thus, 
where  a  national  bank  has  unlawfully  paid  out  money  for  its 
own  stock  it  may  maintain  an  action  of  assumpsit  to  recover 
back  the  same ;  nor  is  it  necessary  in  such  a  case  to  offer  to  re- 
turn the  stock  or  to  resort  to  equity.^"  But  a  voluntary  pay- 
ment, with  knowledge  of  the  facts,  under  a  mistake  as  to  the 
law,  cannot  be  recovered  back.  So  where  a  bank  charged  a 
customer's  account  with  the  amount  of  a  matured  note  in- 
dorsed by  him  and  protested  for  nonpayment,  and  subse- 
quently, with  full  knowledge  of  the  facts,  repaid  the  amount, 
no  action  will  lie  by  the  bank  for  the  recovery  of  the  amount  so 
paid.'^    Again,  where  one  who  is  a  stranger  to  a  draft  or  bill  of 

25  Prairie  State  Loan  &  B.  Assoc,  v.  Gorrie,  167  111.  414,  47  N.  E.  739, 
aff'g  64  111.  App.  325. 

20  Metropolitan  Rd.  Co.  v.  District  of  Columbia,  132  U.  S.  1,  33  L.  ed.  231, 
10  Sup.  Ct.  19. 

27  See  §  313,  herein. 

28  St.  Louis,  Iron  Mountain  &  Southern  Ry.  Co.  v.  Camden  Bank,  47 
Ark.  541,  1  S.  W.  704. 

29  See  §  313,  herein. 

30  Burrows  v.  Niblack  (U.  S.  C.  C.  A.),  84  Fed.  Ill,  53  U.  S.  App.  712,  28 
C.  C.  A.  130. 

31  First  National  Bank  of  Winston  v.  Taylor,  122  N.  C.  569,  29  S.  E.  831. 

510 


ACTIONS  EX  CONTRACTU  §  323 

exchange  goes  to  a  bank  with  the  payee  named  therein  for  the 
purpose  of  identifying  him,  and  upon  the  payee  asking  to  have 
the  draft  or  bill  of  exchange  cashed  after  having  indorsed  it, 
such  person,  at  the  instance  of  the  cashier  of  the  bank,  indorses 
the  paper,  upon  its  being  ascertained  that  such  draft  or  bill  of 
exchange  had  been  altered  and  the  amount  raised  by  the  payee, 
with  which  fraud  the  accommodation  indorser  had  no  com- 
plicity, the  liability  arising  from  such  indorsement,  if  any,  is 
strictly  that  of  an  indorser,  and  an  action  for  money  had  and 
received  cannot  be  maintained  against  such  indorser;  and  the 
fact  that  after  receiving  the  money  the  payee  in  the  draft  or 
bill  of  exchange  paid  to  such  indorser  a  part  of  the  money  in 
satisfaction  of  a  debt  which  he  owed  him,  and  which  the  in- 
dorser at  once  discharged  and  surrendered  the  securities  held  by 
him,  does  not  render  the  indorser  liable  to  the  bank  in  an  action 
for  money  had  and  received,  or  for  money  paid,  to  the  extent 
of  the  amount  of  the  money  received  by  him  from  the  payee  .^^ 
Notwithstanding  a  want  of  privity  between  the  plaintiff  and 
a  bank  the  latter  may  be  sued  in  assumpsit  for  money  had  and 
received  where  the  plaintiff's  money  which  has  been  remitted 
to  it  by  mistake  is  credited  upon  an  indebtedness  held  by  the 
husband  of  the  plaintiff.^^  And  although  a  contract  made  by  a 
corporation  may  be  illegal  as  ultra  vires,  an  implied  contract 
may  exist  compelling  it  to  account  for  the  benefits  actually  re- 
ceived. So  a  national  bank  which  guarantees  a  loan  made  by 
another  bank  in  pursuance  of  an  agreement  that  it  be  paid 
the  amount  due  it  by  the  borrower  out  of  the  proceeds  of  the 
loan,  cannot  avoid  its  Habihty  on  the  guaranty  as  to  the 
amount  actually  received  by  it  pursuant  to  the  arrangement 

32  Alabama  National  Bank  v.  Rivers,  116  Ala.  1,  22  So.  580.  "This  was 
an  action  of  assumpsit  by  a  national  bank  against  the  appellee  to  enforce 
the  latter's  liability  as  an  accommodation  indorser  of  a  cheque  or  draft, 
which  had  been  purchased  from  the  apparent  payee  upon  the  appellee's 
indorsement  and  which  had  been  raised  from  two  dollars  to  two  thousand 
dollars  between  the  date  of  its  issuance  and  the  purchase  by  appellant," 
per  Brickell,  C.  J. 

33  First  National  Bank  v.  Gatton,  172  III.  625,  50  N,  E.  121,  aff'g  71  111. 
App.  323. 

541 


§  323  ACTIONS  AT  LAW  CONTINUED — 

on  the  ground  of  ultra  vires;  it  is  liable  for  money  had  and  re- 
ceived.^ 

Again,  when  a  bank  receives  a  deposit  and  unconditionally 
places  the  same  to  the  general  credit  of  the  depositor,  it  be- 
comes liable  upon  an  implied  contract  to  pay  his  checks  drawn 
thereon  when  presented,  and  it  is  against  the  general  policy  of 
the  law  to  permit  such  bank,  in  an  action  by  the  depositor  to 
recover  money  thus  voluntarily  placed  to  his  credit,  to  claim  to 
be  the  owner  thereof  .^^ 

In  a  case  of  assumpsit  by  a  depositor  against  a  bank  it  ap- 
peared that  a  national  bank  voluntarily  acting  as  the  agent  of 
one  of  its  depositors  in  the  sale  of  certain  securities  sent  the 
securities  to  a  broker  in  a  distant  city,  who  sold  them  and  sent 
a  check  to  the  bank  for  the  proceeds  of  the  sale.  The  bank 
observed  due  diligence  in  forwarding  the  check  for  collection, 
but  before  it  could  reach  the  bank  upon  which  it  was  drawn, 
the  broker  made  an  assignment  and  the  check  proved  worth- 
less. When  the  bank  first  received  the  check  it  credited  the 
amount  of  it  to  the  depositor's  account  and  permitted  him  to 
draw  it  out.  Subsequently,  upon  the  check  being  returned  as 
worthless,  the  bank  charged  off  from  the  depositor's  account  the 
amount  previously  credited  to  him.  It  was  held  that  the  bank 
had  no  right  to  charge  back  the  credit,  and  it  could  not  relieve 
itself,  by  so  doing,  for  liabihty  for  the  amount  thereof,  to  the 
depositor.^^  In  an  action  of  assumpsit  to  recover  the  value  of 
certain  gold  coin  deposited  in  a  bank  for  safe- keeping  the  gold 
was  fraudulently  taken  out  by  the  cashier  of  the  bank  it  was 
held  that  the  bank  was  not  liable  to  the  depositor  for  the  value 
of  the  gold.^^  Two  incorporated  companies  may  unite  in  an 
action  of  assumpsit  to  recover  a  sum  of  money  deposited  in  a 
bank  in  their  joint  names.^* 

34  Citizens'  Cent.  Nat.  Bank  of  New  York  v.  Appleton,  216  U.  S.  196,  54 
L.  ed.  ,  30  Sup.  Ct.  ,  aff'g  190  N.  Y.  417. 

35  Martin  v.  Minnekahta  State  Bank,  7  S.  D.  263,  64  N.  W.  127. 

36  Pepperday  v.  Citizens'  National  Bank,  183  Pa.  St.  519,  28  Pitts.  L.  J. 
(N.  S.)  245,  41  Wkly.  N.  C.  343,  38  Atl.  10-30,  .39  L.  R.  A.  529. 

37  Foster  v.  Essex  Bank,  17  Mass.  479,  9  Am.  Dec.  168. 

38  New  York  &  Sharon  Canal  Co.  v.  Fulton  Bank,  7  Wend.  (N.  Y.)  412. 

542 


ACTIONS  EX  CONTRACTU     >  §§  324,  325 

In  an  action  of  assumpsit  against  a  bank,  on  a  contract  under 
the  seals  of  the  president  and  cashier,  it  was  held  that  the  ac- 
tion was  well  brought;  it  makes  no  difference,  in  an  action  of  as- 
sumpsit against  a  corporation,  whether  the  agent  was  appointed 
under  the  seal  or  not;  nor  whether  he  puts  his  own  seal  to  a  con- 
tract which  he  makes  in  behalf  of  the  corporation.^® 

§324.  Debt.'*" 

In  the  case  of  an  action  for  debt  against  an  insurance  com- 
pany to  recover  a  penalty  under  a  statute  to  prevent  unjust 
discrimination  between  insurants  of  the  same  class,  and  by  life 
insurance  companies,  the  company  will  be  held  chargeable  with 
violation  of  the  law  by  its  agent  acting  within  the  scope  of  his 
authority,  and  it  is  immaterial  whether  the  board  of  directors 
or  any  of  its  officers  having  general  authority  knew  of  such 
violation  or  intended  violation,  connived  at,  participated  in,  or 
ratified  or  approved  it."*^ 

§325.  Covenant.42 

Wliere  an  action  of  covenant  was  brought  it  was  held  that 
one  not  a  party  to  a  deed  inter  partes,  nor  a  privy  to  such  party, 
and  not  named  nor  definitely  pointed  out  in  it  as  the  beneficiary 
could  not  sue  thereon  either  at  common  law  nor  under  a  statute 
l)roviding  that  "if  a  covenant  or  promise  be  made  for  the  sole 
benefit  of  a  person  with  whom  it  is  not  made,  or  with  whom  it 
is  made  jointly  with  others,  such  person  may  maintain  in  his 
own  name  any  action  thereon,  which  it  might  maintain  in  case  it 
had  been  made  with  him  only,  and  the  consideration  had  moved 
from  him  to  the  party  making  such  covenant  or  promise."  "^^ 
L^pon  covenant  of  the  defendant,  made  with  another  corporation 
"to  pay  all  outstanding  debts  and  Habilities"  of  the  latter  cor- 
])oration,  assumpsit  will  not  lie  against  the  defendant  by  cred- 

39  Bank  of  Metropolis  v.  Guttschlick,  14  Pet.  (39  U.  S.)  19,  10  L.  ed.  335. 

«  See  §  313,  herein. 

«  Franklin  Life  Ins.  Co.  v.  People,  200  111.  619,  66  N.  E.  379,  aff  g  103 
111.  App.  554. 

«See  §  313,  herein. 

«  Newberry  Land  Co.  v.  x\ewberry,  95  Va.  119,  3  Va.  Law  Reg.  597,  27 
S.  E.  897. 

543 


§  326  ACTIONS  AT  LAW  CONTINUED — 

itors  of  the  other  corporation,  whose  debts  were  outstanding  at 
the  time  the  covenant  was  made.  The  beneficiaries'  remedy  is 
in  equity.**  An  action  of  covenant  is  not  the  proper  remedy 
against  a  corporation  which  has  not  executed  its  deed  under 
seal.'^ 

A  covenant  against  incumbrances  runs  with  the  land,  and, 
where  a  mortgage  contains  such  a  covenant,  an  action  upon  it 
may  be  maintained  by  a  purchaser  at  a  foreclosure  sale  under 
the  mortgage.'*® 

§  326.  Book  Account.47 

A  corporation  may  maintain  an  action  of  book  account. 
Money  received  to  be  accounted  for,  and  for  which  party  be- 
comes debtor  upon  receipt  of  the  same,  may  be  recovered  in 
that  form  of  action.^* 

44  Harvey  v.  Maine  Condensed  Milk  Co.,  92  Me.  115,  42  Atl.  342. 

45  Mitchell  V.  St.  Andrews  Bay  Land  Co.,  4  Fla.  200. 

46  Security  Bank  of  Minnesota  v.  Holmes,  68  Minn.  538,  71  N.  W.  699. 

47  See  §  313,  herein. 

48  Vermont  Mutual  Fire  Ins.  Co.  v.  Cummings,  11  Vt.  503. 


544 


ACTIONS    EX    DELICTO  §  327 


CHAPTER  XX 

ACTIONS   AT  LAW   CONTINUED — ACTIONS   EX  DELICTO 

§  327.  Actions    Ex    Delicto,    Gener-  §  334.  Nuisance. 

ally.  335.  Libel  and  Slander. 

328.  Trespass.  336.  Malicious  Prosecution. 

329.  Trespass  for  Mesne  Profits.  337.  Wrongfully    Suing    Out    At- 

330.  Trespass  Quare  Clausum  Fre-  tachment. 

git.  338.  Conspiracy — Instances. 

331.  False  Imprisonment.  339.  Fraud    and    Deceit — Instan- 

332.  Trespass  on  the  Case.  ces. 

333.  When    Action    on   Case  Lies       340.  Trover  and  Conversion. 

Concurrently      With      As-       341.  Replevin — Claim     and      De- 
sumpsit.  livery. 

§  327.  Actions  Ex  Delicto,  Generally.^ 

It  is  settled  that  corporations  may  be  charged  in  actions  ex 
delicto  as  well  as  ex  contractu.^  So  one  may  by  contract  acquire 
an  opportunity  for  acts  and  conduct  in  which  third  parties  other 
than  those  with  whom  he  contracts  are  interested  and  for  negli- 
gence in  which  he  is  liable  to  such  other  parties.  Thus  while  a 
citizen  may  have  no  individual  claim  against  a  company  con- 
tracting to  sup})ly  water  to  a  city  for  its  failure  to  do  anything 
under  the  contract,  he  may  have  a  claim  against  it,  after  it  has 
entered  upon  a  contract  and  is  engaged  in  supplying  the  city 
with  water,  for  damages  resulting  from  neghgence,  and  in  such 
a  case  the  action  is  not  for  breach  of  contract  but  for  a  tort.^ 
A  cause  of  action  ex  delicto  and  not  ex  contractu  is  stated  where, 
in  a  suit  against  a  railroad  company  the  plaintiff  alleges  the 
purchase  and  possession  of  a  mileage  ticket,  the  possession  of  a 
freight  train  permit,  and  that  defendant  disregarding  its  duties 

iSee  §§  31.3,  317,  herein. 

2McKim  v.  Odom,  3  Bland's  Ch.  (Md.)  421,  per  Bland,  Ch. 
3  Guardian  Trust  &  Deposit  Co,  v.  Fisher,  200  U.  S.  57,  50  L.  ed.  367,  26 
Sup.  Ct.  180. 

35  545 


§  328  ACTIONS  AT  LAW  CONTINUED— 

as  a  common  carrier  of  passengers,  wrongfully  ejected  him  from 
a  caboose  attached  to  one  of  its  freight  trains  but  did  not  allege 
any  contract  to  carry  him  as  a  passenger  or  any  breach  thereof.^ 
So  an  action  against  a  railroad  company  for  damage  to  hogs 
shipped  by  plaintiff,  which  damage  is  alleged  to  have  been 
caused  by  the  negligent  delay  in  their  shipment  by  the  defend- 
ant, is  an  action  in  tort  and  not  an  action  on  a  contract.^ 

§  328.  Trespass.^ 

An  action  of  trespass  may  be  maintained  against  a  corpora- 
tion.'^  So  trespass  vi  et  armis  will  lie  against  a  corporation  for 
breaking,  entering  and  carrying  away  personal  property;  * 
but  it  is  not  the  proper  form  of  action  for  injuries,  resulting 
from  the  negligence  of  the  servants  of  a  corporation;  trespass  on 
the  case,  is  the  proper  action.** 

In  an  action,  however,  against  a  railway  company  to  recover 
damages  for  personal  injuries  alleged  to  have  been  sustained 
by  the  plaintiff  by  reason  of  his  being  run  over  by  one  of  de- 
fendant's locomotives  drawing  a  train,  a  count  of  the  com- 
plaint which,  in  stating  the  negligence  complained  of,  avers 
"that  defendant  wantonly  or  intentionally  caused  said  engine 
or  train  to  run  upon  or  against  plaintiff,"  or  a  count  which  avers 
that  "defendant,  through  its  servant  or  agent  in  charge  or 
control  of  said  train,  wantonly  or  intentionally  inflicted  upon 
plaintiff  injuries  and  damages  *  *  *  by  wantonly  or  inten- 
tionally causing  or  allowing  said  train  to  run  upon  or  against 
plaintiff,"  states  a  cause  of  action  in  trespass,  and  not  in  case; 

*  Reed  v.  Chicago,  Burlington  &  Quincy  Rd.  Co.,  84  Neb.  8,  120  N.  W. 
442. 

6  Brown  v.  St.  Louis  &  San  Francisco  Ry.  Co.,  135  Mo.  App.  624,  117 
S.  W.  112. 

«See  §§313,  317,  herein. 

7  Underwood  v.  Newport  Lyceum,  1  Fla.  129,  41  Am.  Dec.  260;  Crawfords- 
ville  &  Wabash  Rd.  Co.,  President  and  Directors  of,  v.  Wright,  5  Ind.  252. 
"The  company  contend  that  the  suit  cannot  be  maintained,  because  tres- 
pass will  not  lie  against  a  corporation.  Such  was  once  supposed  to  be  the 
law;  but  the  doctrine  was  unsound  and  has  been  exploded."  Brokaw  v. 
New  Jersey  Rd.  &  Transp.  Co.,  32  N.  J.  L.  328,  90  Am.  Dec.  659. 

8  Edwards  v.  Union  Bank  of  Florida,  1  Fla.  136. 

8  Illinois  Cent.  Ry.  Co.  v.  Reedy,  17  111.  580.    See  §  317,  herein. 

54(3 


ACTIONS    EX    DELICTO  '      §  329 

and  in  order  to  sustain  such  counts  of  the  complaint,  the  plain- 
tiff must  prove  actual  participation  on  the  part  of  the  defend- 
ant in  the  damnifying  act.'° 

A  pipe  line  company  engaged  in  the  production  and  trans- 
portation of  natural  gas,  which  has  buried  its  pipe  under  the 
provisions  of  a  statute/^  is  under  no  obligation  to  let  it  remain 
indefinitely,  but  it  has  a  right  to  abandon  the  easement  which  is 
acquired  under  the  right  of  eminent  domain  and  remove  the 
pipe  when  its  interests  require  it.  And  where  a  pipe  line  com- 
pany removes  pipe  which  it  has  buried  under  the  land  of  an- 
other, by  proceedings  under  the  statute,^'  it  is  the  duty  of  the 
company  to  remove  the  pipes  at  the  time  and  in  the  manner 
least  harmful  to  the  landowner;  to  fill  the  trench  so  as  sub- 
stantially to  restore  the  surface  of  the  land,  and  to  make  com- 
pensation for  any  actual  injury  to  growing  grain  or  grass,  and 
for  any  substantial  injury  to  the  turf,  beyond  the  mere  openizp; 
and  filling  of  the  trench  in  which  the  pipe  lay.^^  Again,  an  ac- 
tion of  trespass,  for  assault  and  battery,  will  lie  against  a  corpo- 
ration.^'* 

§  329.  Trespass  for  Mesne  Profits.i^ 

Trespass  for  mesne  profits  may  be  maintained  against  a 
corporation ;  ^^  and  it  is  the  appropriate  remedy  to  recover  the 
value  of  oil  mined  upon  the  land  of  the  defendant  while  in  pos- 
session.^^ 

10  Central  of  Georgia  Ry.  Co.  v.  Freeman,  140  Ala.  581,  37  So.  387. 

11  Act  May  29,  1885,  P.  L.  Pa.  29. 

12  Act  May  29,  1885,  P.  L.  Pa.  29. 

13  Clements  v.  Philadelphia  Co.,  184  Pa.  St.  28,  39  L.  R.  A.  532,  41  Wkly. 
N.  C.  321,  38  Atl.  1090,  28  Pitts.  L.  J.  U.  S.  344.  A  case  of  trespass  for  dam- 
ages alleged  to  have  been  caused  to  plaintiff's  property  in  the  removal  of 
its  pipe. 

14  St.  Louis,  Alton  &  Chicago  Ry.  Co.  v.  Dalby,  19  111.  353.  If  the  act  of 
a  servant  is  unlawful  in  itself,  trespass  will  lie.  See  §  317,  herein.  Brokaw 
v.  New  Jersey  Rd.  &  Transp.  Co.,  32  N.  J.  L.  328,  90  Am.  Dec.  659.  Com- 
pare Orr  V.  Bank  of  United  States,  1  Ham.  (1  Ohio)  28,  13  Am.  Dec.  588. 
See  §  317,  herein. 

15  See  §§  313,  317,  herein. 

18  M'Cready  v.  Thomas,  9  Serg.  &  R.  (Pa.)  94,  11  Am.  Dec.  667. 
17  Reilly  v.  Crown  Petroleum  Co.,  213  Pa.  St.  595,  63  Atl.  253. 

547 


§  330  ACTIONS  AT  LAW  CONTINUED — 

§  330.  Trespass  Quare  Clausum  Fregit.^^ 

A  corporation  may  maintain  an  action  of  trespass  quare 
clausum  fregit}^  Such  an  action  can  be  maintained  against  a 
railroad  company  or  other  private  corporation/"  It  will  also 
lie  against  a  railroad  corporation  for  entering  upon  plaintiff's 
land  for  the  purpose  of  constructing  a  railroad .^^  So  trespass 
will  lie  against  a  railroad  company  for  entering  upon  the  plain- 
tiff's close  with  men,  etc.,  and  digging  up  and  carrying  away 
earth,  etc.,  and  where  the  record  of  such  a  cause  does  not  show 
that  the  injuries  were  committed  by  the  company  when  acting 
under  their  charter  or  in  the  construction  of  their  road  it  cannot 
be  presumed  that  they  were  so  committed;  such  a  defense  in 
order  to  be  availed  of  must  be  set  up  by  plea.^^  Again,  a  com- 
plaint, alleging  that  the  defendant  unlawfully  and  with  force 
broke  and  entered  on  plaintiff's  lands  and  cut  down  and  carried 
away  trees  and  timber  and  converted  and  disposed  of  the  same 
to  his  own  use,  states  a  cause  of  action  for  trespass,  and  not  in 
trover,  and  in  the  absence  of  all  proof  connecting  him  with 
cutting  the  timber  or  entry  on  the  land,  a  nonsuit  should  be 
granted  .^^ 

One  who  buries  his  dead  in  soil  to  which  he  has  a  freehold 
right,  and  to  the  possession  of  which  he  is  entitled,  can  maintain 
an  action  of  trespass  quare  clausum  fregit  against  anyone  who 
digs  or  disturbs  the  grave.  And  one  who  buries  his  dead  in 
a  public  cemetery,  by  the  express  or  implied  consent  of  those 
in  proper  control  of  it,  though  not  the  owner  of  the  soil  by  deed 

18  See  §§  313,  317,  herein. 

19  Greenville  &  Columbia  Rd.  Co.  v.  Pastlow,  14  Rich.  Law  (S.  C),  237, 
action  of  trespass  quare  clausum  fregit  to  recover  damages  for  injuries  done 
to  plaintiff's  road. 

When  trespass  quare  clausum  fregit  will  not  lie,  see  Foote  v.  City  of  Cin- 
cinnati, 9  Ohio  (9  Ham.),  31,  34  Am.  Dec.  420. 

20  Main  v.  Northeastern  Rd.  Co.,  12  Rich.  Law  (S.  C),  82,  75  Am.  Dec. 
725. 

21  Whiteman  v.  Wilmington  &  Susquehanna  Rd.  Co.,  2  Harr.  (Del.)  514, 
33  Am.  Dec.  411. 

22  Crawfordsville  &  Wabash  Rd.  Co.,  President  &  Direct<  i  s  of,  v.  Wright, 
5  Lid.  252. 

23  Dessert  Lumber  Co.  v.  Wadleigh,  103  Wis.  318,  79  N.  W.  237. 

548 


ACTIONS    EX    DELICTO  §  331 

properly  executed,  acquires  such  a  possession  of  the  lot  where 
the  bodies  are  buried  as  will  entitle  him  to  maintain  an  action 
of  trespass  quare  clausum  fregit  against  the  owners  of  the  fee, 
or  strangers  who,  without  his  consent,  negligently  or  wantonly 
disturb  the  graves  or  remains;  but  this  exclusive  right  of  pos- 
session of  land  to  make  interments  in  the  particular  lot  is 
limited  to  the  time  during  which  the  ground  constituting  the 
cemetery  continues  to  be  used  for  burial  purposes,  and  upon  its 
ceasing  to  be  so  used  his  only  right  is  that  he  should  have  due 
notice  and  an  opportunity  to  remove  the  bodies  to  some  other 
place  of  his  own  selection,  if  he  so  desire,  or,  on  failing  to  do  so, 
that  the  remains  should  be  decently  removed  by  others.  So 
in  an  action  of  trespass  qimre  clausum  fregit  it  is  not  necessary 
that  the  complaint  should  describe  the  premises  trespassed  upon 
with  definite  particularity;  it  is  sufficient  if  the  description  gives 
the  defendant  such  information  as  will  prevent  him  from  being 
misled  or  from  being  uncertain  as  to  the  particular  premises  or 
close  alleged  to  have  been  broken  or  trespassed  upon/"* 

§  331.  False  Imprisonment.^^ 

An  action  for  trespass  for  false  imprisonment  may  be  main- 
tained against  a  corporation.^^  A  railroad  company  is  not  liable 
for  the  unauthorized  act  of  one  of  its  employes  in  causing  the 
arrest  of  a  passenger.^'  A  telephone  and  telegraph  company 
is  Hable  in  an  action  for  damages  for  false  imprisonment  where 
it,  by  its  servant,  caused  the  plaintiff  to  be  unlawfully  arrested 
for  the  purpose  of  putting  him  out  of  the  way,  so  that  its  agents 
and  servants  might  erect  its  poles  on  his  land.  In  such  a  case 
the  jury  may,  in  addition  to  compensatory  damages,  award 
exemplary,  punitive  or  vindictive  damages,  sometimes  called 
"smart  money,"  if  the  defendant  has  acted  wantonly  or  with 
criminal  indifference  to  civil  obHgations,  or  has  been  guilty  of  an 

24  Bessemer  Land  &  Improvement  Co.  v.  Jenkins,  111  Ala.  135,  IS  So.  565. 

25  See  §§313,  317,  herein. 

28  Owsley  V.  Montgomery  &  West  Point  Rd.  Co.,  37  Ala.  5fi8  (averments 
stated). 

27  St.  Louis  &  San  Francisco  Rd.  Co.  v.  Wyatt,  84  Ark.  193,  105  S.  W.  72. 
See  §  317,  herein. 

549 


§  332  ACTIONS  AT  LAW  CONTINUED — 

intentional  and  willful  violation  of  the  plaintiff's  rights.  An 
action  for  damages  lies  for  the  malicious  abuse  of  lawful  process, 
civil  or  criminal,  even  if  such  process  has  been  issued  for  a  just 
cause  and  is  valid  in  form,  and  the  proceeding  thereon  was 
justified  and  proper  in  its  inception,  but  the  injury  arises  in 
consequence  of  abuse  in  subsequent  proceedings.^* 

§  332.  Trespass  on  the  Case.^'^ 

Trespass  on  the  case  will  lie  against  a  corporation  for  a  tort.^" 
So  it  is  settled  that  trespass  on  the  case  will  lie  against  a  corpo- 
ration for  neglect  of  a  corporate  duty  by  which  the  plaintiff 
suffers.^^  And  if  a  servant  does  a  lawful  act  in  an  unlawful  way, 
case  is  the  proper  remedy.^-  So  case  may  be  sustained  against 
a  corporation  aggregate  to  recover  for  injuries  occasioned  by 
a  want  of  ordinary  care  and  foresight.^^  Case  for  malfeasance 
also  lies  against  a  corporation  for  negligently  and  unskillfully 
constructing  public  works.^^  An  action  on  the  case  is  also  an 
appropriate  remedy  for  personal  injuries  sustained  by  the  plain- 
tiff as  a  passenger  in  railroad  cars  caused  by  the  wrongful  acts 
of  a  servant  of  the  corporation,  even  though  such  acts  have 
been  acts  of  force,  and  such  that  trespass  would  have  been  the 
only  proper  remedy  against  the  servant .^^  And  a  complaint 
which  alleges  that  plaintiff's  intestate  was  rightfully  at  work  in 
defendant's  mine  as  an  employe  of  defendant's  independent 
contractor,  and  while  so  engaged  was  struck  by  defendant's 
tram  cars  and  killed  through  the  negligence  of  defendant's 
servants,  etc.,  states  a  good  cause  of  action;  and  is  in  case  and 
not  in  trespass.^^    Again,  an  action  on  the  case  for  vexatious 

28  Jackson  v.  American  Teleph.  &  Teleg.  Co.,  139  N.  C.  347,  51  S.  E.  1015, 
70  L.  R.  A.  738. 

29  See  §§  313,  317,  herein. 

30  Chestnut  Hill  &  Spring  House  Tump.  Co.  v.  Rutter,  4  Serg.  &  R.  (Pa.) 
6,  8  Am.  Dec.  675. 

31  Riddle  v.  Proprietors,  7  Mass.  169,  5  Am.  Dec.  35. 

32  St.  Louis,  Alton  &  Chicago  Rd.  Co.  v.  Dalby,  19  111.  353.  See  §  317, 
herein. 

33  Brown  v.  South  Kennebec  Agricultural  Soc,  47  Me.  275. 

34  Mayor  of  New  York  v.  Bailey,  2  Denio  (N.  Y.),  433. 

35  Havens  v.  Hartford  &  New  Haven  Rd.  Co.,  28  Conn.  69. 

38  Lookout  Mountain  Iron  Co.  v.  Lea,  144  Ala.  169,  39  So.  1017. 

550 


ACTIONS    EX    DELICTO  §  332 

suit  may  be  maintained  against  a  corporation  aggregate .^^ 
So  case  for  damages  for  negligence  which  is  essentially  an  action 
ex  delicto  is  the  remedy  for  injury  sustained  by  the  rifling  of 
the  contents  of  a  trunk  which  plaintiff,  intending  to  become  a 
passenger  on  defendant's  train,  sent  to  its  station  and  the  trunk 
was  so  negligently  and  carelessly  kept  that  it  was  so  rifled  be- 
fore plaintiff's  arrival  to  pay  her  fare  and  take  her  journey.^* 
And  trespass  does  not  lie  against  a  railroad  corporation  to  re- 
cover damages  against  it  for  the  loss  or  injury  of  animals  run 
over  by  its  engines  or  cars;  case  is  the  proper  remedy.^*  Tres- 
pass on  the  case  also  lies  against  a  corporation  aggregate  for  a 
tort  for  stopping  a  water  course;  '"^  and  for  tort,  for  damages  for 
having  so  neghgently  built  and  maintained  a  bridge  as  to  cause 
damage  by  preventing  easy  and  safe  navigation.'*^  Again,  case 
and  not  trespass  quare  clausum  fregit  is  the  proper  form  of  action 
for  diminution  of  the  value  of  adjacent  property  by  reason  of 
the  construction  of  a  railroad  in  the  public  streets.'^  So  case 
and  not  trespass  is  the  proper  remedy  where  a  railroad  corpo- 
ration causes  an  injury  to  land  by  its  neglect  in  removing  stones 

37  Goodspeed  v.  East  Haddam  Bk.,  22  Conn.  530,  58  Am.  Dec.  439,  action 
was  against  an  incorporated  bank  alleging  that  defendants  without  prob- 
able cause,  and  with  malicious  intent,  unjustly  to  vex,  harass,  embarrass 
and  trouble  the  plaintiff,  commenced  by  writ  of  attachment,  and  pros- 
ecuted against  him  a  vexatious  suit. 

38  Corry  v.  Pennsylvania  Rd.  Co.,  194  Pa.  St.  516,  45  Atl.  341.  Pennsyl- 
vania Statute,  Act  May  25,  1887,  only  assumes  to  group  together  into  an 
action  of  assumpsit  those  demands  arising  ex  contractu  which  were  thereto- 
fore "recoverable  in  debt,  assumpsit  or  covenant,"  and  all  actions  of  tres- 
pass, trover  and  trespass  on  the  case  into  one  action,  "  to  be  called  an  action 
of  trespass." 

39  Selma,  Rome  &  Dalton  Rd.  Co.  v.  Webb,  49  Ala.  240.  The  defendant 
demurred  to  the  complaint  on  the  ground  that  the  proper  remedy  was  case 
not  trespass. 

40  Chestnut  Hill  &  Spring  House  Turnpike  Co.  v.  Rutter,  4  Serg.  &  R. 
(Pa.)  6. 

41  Town  of  Harlem  v.  Emmert,  41  111.  319. 

42  Jeffersonville,  Madison  &  Indianapolis  Rd.  Co.  v.  Esterle,  13  Bush 
(76  Ky.),  667.  "By  the  rules  of  the  common  law,  trespass  quare  clausum 
fregit  could  not  be  maintained,  except  by  a  person  having  the  actual  posses- 
sion of  the  locus  in  quo,  and  even  by  our  statutory  modifications  of  those 
rules,  the  party  complaining  must  at  least  have  legal  seizin."  Id.,  672,  per 
Lindsay,  C.  J. 

551 


§  333  ACTIONS  AT   LAW  CONTINUED — 

therefrom  even  though  thrown  thereon  by  blasting  in  a  i)roper 
manner  during  its  operations  in  constructing  its  raih-oad.''^ 
And  case  and  not  assumpsit  is  the  appropriate  remedy  in  an 
action  to  recover  for  the  value  of  property  stored  in  a  freight 
car  by  a  railroad  company  whether  the  recovery  is  sought 
against  them  as  carriers  or  as  warehousemen  or  under  a  stat- 
ute.^ A  special  action  on  the  case  gives  an  adequate  remedy 
to  recover  the  value  of  stock  where  an  incorporated  bank  undul}' 
refuses  to  transfer  such  stock. ^^ 

§  333.  When  Action  on  Case  Lies  Concurrently  With 
Assumpsit.^** 

Case  will  lie  concurrently  with  assumpsit  for  a  breach  of 
duty  arising  out  of  an  express  or  implied  contract.  And  in 
many  cases  where  assumpsit  is  a  concurrent  remedy,  case  will 
also  lie  for  a  violation  of  the  duty  which  the  contractual  rela- 
tions of  the  parties  involve.  So  although  assumpsit  will  usually 
lie  for  breach  of  a  contract,  yet  an  action  on  the  case  for  a 
breach  of  the  common-law  duty  is  oftener  the  better  remedy. 
In  an  action  on  the  case  brought  by  the  plaintiff  town  against 
the  defendant  corporation  to  recover  the  value  of  the  town- 
hall  and  certain  sidewalks  and  hose,  the  property  of  the  town, 
which  were  destroyed  by  fire  by  reason  of  the  alleged  negli- 
gence of  the  defendant  corporation  in  failing  to  perform  its 
contract  to  supply  through  its  pipes  water  of  sufficient  current, 
pressure  and  volume  to  extinguish  fires  within  the  range  of  its 
hydrants,  it  appeared  among  other  things,  from  the  allegations 
in  the  plaintiff's  declaration  that  the  defendant  corporation 
entered  into  a  contract  with  the  plaintiff  town  whereby  for  the 
sum  of  eight  hundred  dollars  per  year,  it  agreed  to  supply  the 
plaintiff  town  with  sixteen  post  hydrants  and  water  for  the 
same  before  the  first  day  of  August,  1902;  that  it  also  agreed 
that  said  hydrants  should  have  two  nozzles  and  should  be 

«  Sabin  v.  Vermont  Central  Rd.  Co.,  25  Vt.  363. 

44  Welch  V.  Concord  Railroad,  68  N.  H.  206,  44  Atl.  304. 

45  Shipley,  Matter  of,  v.  Mechanics'  Bank,  10  Johns.  (N.  Y.)  484. 
48  See  §§  313,  317,  herein. 

552 


ACTIONS    EX    DELICTO  §  334 

supplied  with  pipes  at  least  four  inches  in  diameter;  that  it 
also  agreed  that  said  hydrants  should  be  so  placed  that  proper 
protection  against  fire  should  be  secured;  that  it  also  agreed 
that  the  waterworks  should  be  supplied  by  a  pump  or  pumps 
of  a  capacity  not  less  than  one  million  gallons  per  day;  also 
that  the  defendant  corporation  engaged  and  became  bound 
and  obliged  to  furnish  through  its  pipes  and  hydrants  water 
of  sufficient  current,  pressure  and  volume  to  extinguish  fire 
within  range  of  such  hydrants,  and  especially  and  particularly 
fires  originating  in  or  communicated  to  the  aforesaid  building 
and  property  of  the  plaintiff  town.  Upon  demurrer  set  up  to 
the  declaration,  with  the  right  to  plead  anew,  it  was  held: 
(1)  That  upon  proof  of  the  facts  stated  in  the  declaration  the 
defendant  corporation  would  be  liable  to  the  plaintiff  town  in 
an  appropriate  action  for  the  damages  caused  by  its  negligence 
in  failing  to  perform  a  duty  arising  from  its  contractual  rela- 
tions with  the  plaintiff  town;  (2)  That  the  plaintiff  town  was 
legally  entitled  to  bring  an  action  on  the  case  to  recover  dam- 
ages for  the  consequential  injuries  resulting  from  the  negligent 
manner  in  which  the  defendant  corporation  performed  a  duty 
created  by  its  express  contract  with  the  plaintiff  town.  With 
respect  to  the  issue  presented  in  the  aforesaid  actions  for 
negligence,  the  defendant  corporation  was  required  to  use 
ordinary  care  to  maintain  pipes  and  furnish  water  of  the 
pressure  and  volume  stipulated  in  its  written  contract.  It 
was  only  required  to  exercise  such  prudence,  vigilance  and 
precaution  as  would  meet  the  requirements  of  ordinary  care 
according  to  the  exigencies  of  the  situation,  having  due  regard 
to  the  nature  and  importance  of  the  contract,  the  rights  and 
interests  of  those  to  be  affected  by  it  and  the  manifest  conse- 
quences of  a  failure  to  perform  it.'*' 

§  334.  Nuisance.'** 

In  an  action  at  law,  damages  may  be  recovered  against  a 
person  who  maintains  a  nuisance  which  renders  the  ordinary 

«  Milford  V.  Bangor  Railway  &  Electric  Co.,  104  Me.  233,  71  Atl.  759. 
4sSee  §§  313,  317,  herein. 

553 


§  334  ACTIONS  AT  LAW  CONTINUED — 

use  and  occupation  of  property  physically  uncomfortable  to  its 
owner,  and  if  the  cause  of  the  annoyance  and  discomfort  be 
continuous,  equity  will  restrain  it.  And  corporations  are 
equally  responsible  with  individuals  to  respond  in  damages  for 
injuries  caused  by  nuisances  maintained  by  their  servants  by 
the  authority  of  the  corporation.^^  And  while  a  corporation 
has  the  right  to  locate  and  operate  its  electric  light  plant  on  its 
own  property  yet  in  doing  so  it  cannot  act  arbitrarily  and  with- 
out reference  to  damage  to  property  in  the  immediate  vicinity 
of  such  plant.^°  Where  a  railroad  embankment  was  one  of  the 
causes  of  backwater  upon  plaintiff's  land  and  amounted  to  a 
nuisance,  knowledge  of  the  fact  that  it  was  a  nuisance  or  an 
obstruction  should  have  been  brought  home  to  the  party 
charged  with  maintaining  the  same,  where  the  railroad  and  em- 
bankment were  built  by  his  grantor,  before  such  grantee  can  be 
held  Hable  for  such  maintenance.^^  Again,  in  an  action  of 
trespass  to  recover  damages  for  flooding  land  by  a  water  com- 
pany, it  was  alleged  that  the  plaintiff's  business  was  destroyed 
and  his  power  to  use  his  property  ended;  and  it  was  held  that  if 
the  nuisance  was  permanent  and  continuing  and  the  owner 
elected  to  so  consider  it  he  could  recover  ih  the  same  action  both 
past  and  present  damages  .^^ 

An  allegation  in  a  declaration  that  the  defendant  "negli- 
gently" allowed  noxious  fumes  to  escape  from  its  factory  to  the 

49  Baltimore  &  Potomac  R.  R.  Co.  v.  Fifth  Baptist  Church,  108  U.  S.  317, 
2  Sup.  Ct.  719,  27  L.  ed.  739.  Examine  Savannah,  F.  &  W.  Ry.  Co.  v. 
Parish,  117  Ga.  893,  45  S.  E.  280. 

As  to  remedies  generally  in  case  of  nuisances,  see  Joyce  on  Nuisances, 
§§  359-505. 

50  Sherman  Gas  &  Electric  Co.  v.  Belden  (Tex.  Civ.  App.,  1909),  115 
S.  W.  896.  There  was  evidence  in  this  case  that  the  north  wall  of  the  power 
house  was  less  than  fifteen  feet  from  plaintiff's  residence;  that  the  plant  was 
operated  twenty-four  hours  each  day;  that  the  explosion  of  oil  in  the  en- 
gines could  be  heard  all  night;  that  it  caused  the  windows  to  rattle  and  the 
house  to  jar,  making  it  impossible  for  the  appellees  to  sleep  and  enjoy  their 
house.    A  judgment  below  for  the  plaintiffs  was  affirmed. 

51  Nicket  v.  St.  Louis,  Memphis  &  Southern  Rd.  Co.,  135  Mo.  App.  661, 
116S.  W.  477. 

52  Woodstock  Hardwood  &  Spool  Mfg.  Co.  v.  Charlestown  Light  &  Water 
Co.  (S.  C.  1909),  63  S.  E.  548. 

554 


ACTIONS    EX    DELICTO  §  335 

damage  of  plaintiff's  crops,  does  not  require  of  plaintiff  specific 
jjroof  of  the  precise  negligence  which  caused  or  permitted  such 
fumes  to  escape;  for,  from  proof  of  the  escape  of  noxious  fumes 
and  consequent  damage  therefrom,  negligence  will  be  inferred. 
The  operation  of  a  factory  in  such  manner  as  to  constitute  a 
nuisance  may  be  given  in  evidence  under  an  allegation  that  it 
was  "negligently"  operated,  provided  the  othcT  allegations  of 
fact  make  out  a  i^ase  of  nuisance  and  are  supported  by  the 
proof.^^ 

Under  a  State  statute  ^^  authorizing  one  to  sue  for  the  benefit 
of  all  where  the  question  is  one  of  "common  or  general  interest 
of  many  persons,"  two  or  more  owners  in  severalty  of  abutting 
lots  similarly  situated  may  join  as  plaintiffs  in  an  action  to 
prevent  the  laying  of  a  street  railway,  about  to  be  laid  upon  a 
street  without  authority  of  law,  on  the  ground  that  it  will  be  a 
continuing  nuisance  to  the  owners  of  abutting  lots,  but  one  can- 
not sue  for  the  benefit  of  all ;  and  a  statement  in  the  complaint 
that  he  does  so  sue  is  mere  surplusage .^^ 

§  335.  Libel  and  Slander.^^ 

An  action  for  libel  can  be  maintained  against  a  corporation.^' 
So  a  corporation  aggregate  may  compose  and  publish  a  libel 

53  Hinmon  v.  Somers  Brick  Co.,  75  N.  J.  L.  869,  70  Atl.  166. 

54  Wis.  Stat.,  1898,  §  2604. 

55  Linden  Land  Co.  v.  Milwaukee  Electric  Ry.  &  Light  Co.,  107  Wis.  493, 
83  N.  W.  851. 

56  See  §  313,  herein. 

57  United  States:  Philadelphia,  Wilmington  &  Bait.  Rd.  Co.  v.  Quigley, 
21  How.  (62  U.  S.)  202,  16  L.  ed.  73. 

Michigan:  Bacon  v.  Michigan  Cent.  Rd.  Co.,  55  Mich.  224,  21  N.  W.  324, 
54  Am.  St.  Rep.  372  (well  settled  in  this  State;  groimds  stated  on  which  con- 
trary doctrine  based,  Id.,  228). 

Minnesota:  Aldrich  v.  Press  Printing  Co.,  9  Minn.  133,  86  Am.  Dec.  84 
(action  for  libel  for  pubhcation  by  corporation  defendant  of  libelous  matter 
in  a  newspaper) . 

Missouri:  Johnson  v.  St.  Louis  Dispatch  Co.,  2  Mo.  App.  565,  Id.,  65 
Mo.  039  (no  question  whatever  that  a  printing  and  publishing  corporation 
liable  to  action  for  damages  for  libel) . 

What  does  and  does  not  constitute  libel,  see  the  following  cases: 

United  States:  American  Book  Co.  v.  dates  (U.  S.  C.  C),  85  Fed.  729 
(when  charge  that  corporation  is  in  combination  or  trust  is  not  a  libel ;  when 

555 


§  335  ACTIONS  AT  LAW  CONTINUED — 

and  by  reason  thereof  become  liable  to  an  action  for  damages 
by  the  person  concerning  whom  the  words  were  composed  and 
published.^*  If  a  corporation  sanctions  the  publication  of  a  libel 
it  is  the  publisher  of  the  libel  and  liable  in  hke  manner  as  an 
individual,  not  because  a  corporation  may  act  with  mahce,  but 
because  it  has  a  capacity  for  voluntary  action  and  is  responsible 
for  such  action  .•^•*  And  where  it  appears  that  one  writing  a 
libelous  letter  in  the  name  of  a  corporation  had  general  manage- 
ment and  exclusive  control  of  the  department  of  the  corporate 
business,  in  the  management  of  which  the  letter  is  written,  the 
corporation  is  liable  for  punitive  damages.^^  Again,  in  an  action 
for  libel  the  fact  that  a  letter  to  a  protective  trade  association, 
not  fairly  disclosing  the  facts,  and  in  consequence  of  which  a 

charge  as  to  methods  of  obtaining  business  is  a  libel);  Union  Mutual  Life 
Ins.  Co.  V.  Thomas  (U.  S.  C.  C.  A.),  83  Fed.  803,  28  C.  C.  A.  96,  48  U.  S. 
App.  575  (when  matter  in  pleading,  such  as  that  plaintiff  and  her  attorneys 
have  entered  into  a  conspiracy  to  defraud  defendant,  is  not  privileged). 

Georgia:  Behre  v.  National  Cash  Register  Co.,  100  Ga.  213,  27  S.  E.  986 
(when  newspaper  publication  tending  to  hold  an  agent  of  a  corporation  out 
to  the  pubUc  as  an  imposter  is  libelous). 

Kentucky:  Ratcliff  v.  Louisville  Courier  Journal  Co.,  99  Ky.  416,  36  S.  W. 
177,  18  Ky.  L.  Rep.  291  (if  alleged  libelous  publication  be  proven  subse- 
quently true  recovery  is  precluded). 

Maine:  Thompson  v.  Lewiston  Daily  Sun  Pub.  Co.,  91  Me.  203,  39  Atl. 
556  (publication  imputing  crime  of  bigamy  held  libelous  per  se). 

Massachusetts:  Haynes  v.  Clinton  Printing  Co.,  169  Mass.  512,  48  N.  E.  275 
(publication  conveying  inference  that  person  is  guilty  of  murder  is  hbelous). 

New  York:  Gates  v.  New  York  Recorder  Co.,  156  N.  Y.  228,  49  N.  E.  769, 
aff'g  83  Hun,  614  (when  charge  involving  unchastity  of  a  woman  is  hbelous 
per  se). 

Wisconsin:  Gillan  v.  State  Journal  Printing  Co.,  96  Wis.  460,  71  N.  W. 
892  (when  charge  of  moral  turpitude  not  conveyed  by  publication  so  as  to 
warrant  damages  unless  special  damages  are  pleaded  and  proven. 

58  Maynard  v.  Firemen's  Fund  Ins.  Co.,  34  Cal.  48,  91  Am.  Dec.  672. 

59  Vinas  v.  Merchants'  Mutual  Ins.  Co.  of  New  Orleans,  27  La.  Ann.  367. 
It  is  as  possible  for  a  corporation  as  for  an  individual  to  act  mahciously. 
And  it  has  been  held  that  a  corporation  aggregate  may  well,  in  its  corporate 
capacity,  cause  the  publication  of  a  defamatory  statement  under  such 
circumstances  as  might  imply  malice  in  law  sufficient  to  support  the  action ; 
and  there  may  be  circumstances  by  which  express  mahce  in  fact  might  be 
proved,  such  as  to  make  a  corporation  aggregate  liable  therefor  in  its  cor- 
porate capacitj'.     Id. 

60  Rose  V.  Imperial  Engine  Co.,  112  N.  Y.  Supp.  8,  127  App.  Div.  885. 

556 


ACTIONS    EX    DELICTO  §  335 

plumber  is  placed  upon  the  "  cash  before  dehvery  Hst,"  was  sent, 
not  by  the  defendant  personally,  but  by  an  under  manager  of 
his  business,  did  not  roHeve  the  defendant  from  liabiUty,  as  a 
master  is  liable  for  willful  injury  committed  by  a  servant  while 
engaged  in  the  transaction  of  the  master's  business.^^  But  a 
railroad  company  is  not  responsible,  under  the  rule  of  respondeat 
ouster,  for  a  Hbel  of  an  employe  published  by  its  general  super- 
intendent without  authority  from  the  corporation;  nor  is  the 
superintendent  himself  responsible,  when  there  is  no  evidence 
submitted  that  the  libelous  article  was  dictated,  or  even  in- 
spired by  him.®^  A  corporation  may  be  hable  for  slandering 
the  business  of  another  corporation  in  the  same  business/'^ 
In  England  a  trading  corporation  may  maintain  an  action  for 
libel  calculated  to  injure  their  reputation  by  reflecting  on  the 
management  of  their  trade  or  business  without  alleging  or 
proving  special  damage.  The  words  complained  of,  in  order  to 
entitle  a  corporation  to  sue  for  libel  or  slander,  must  injuriously 
affect  the  corporation  as  distinguished  from  the  individuals 
who  compose  it;  such  words  must  attack  the  company  or  corpo- 
ration in  the  method  of  conducting  its  affairs,  such  as  accusa- 
tions of  fraud  or  mismanagement  or  an  attack  upon  its  financial 
position.^^  And  a  joint-stock  company  there  may  maintain  an 
action  for  hbel  against  a  shareholder  of  the  company  .^■'^ 

ei  Trapp  v.  Du  Bois,  78  N.  Y.  Supp.  505,  76  App.  Div.  314.  See  §  317, 
herein. 

62  Henry  v.  Railroad  Co.,  139  Pa.  St.  289,  27  Wkly.  Notes,  Cas.  322,  21 
Atl.  157.    Action  of  trespass. 

63  Buffalo  Lubricating  Oil  Co.  v.  Standard  Oil  Co.,  42  Hun  (49  N.  Y. 
Sup.  Ct.),  153,  3  N.  Y.  St.  Rep.  450,  aff'd  in  106  N.  Y.  669,  8  N.  Y.  St.  Rep. 
876.  Also  what  facts  show  this  to  have  been  done;  -pleadings  should  allege 
that  acts  complained  of  were  done  by  the  corporation  and  not  by  its  agents; 
there  was  also  a  charge  of  conspiracy  against  defendants. 

64  South  Hetton  Coal  Co.,  Ltd.,  v.  Northeastern  News  Assoc,  Ltd.,  63 
L.  J.  (N.  S.)  Q.  B.  293,  297. 

65  Metropolitan  Saloon  Omnibus  Co.  v.  Hawkins,  4  Hurl  &  Norm.  87. 
Company  incorporated  under  19  &  20  Vict.,  c.  47.  Pollock,  C.  B.,  said: 
"That  a  corporation  at  common  law  can  sue  in  respect  to  libel  there  is  no 
doubt.  It  would  be  monstrous  if  a  corporation  could  maintain  no  action  for 
slander  of  title  through  which  they  lost  a  great  deal  of  money.  *  *  * 
It  would  be  very  odd  if  a  corporation  had  no  means  of  protecting  itself 

557 


§  336  ACTIONS  AT  LAW  CONTINUED — 

§  336.  Malicious  Prosecution.^^ 

An  action  for  malicious  prosecution  may  be  maintained 
against  a  corporation.^^  So  railroad  companies  are  liable  in  an 
action  for  damages  for  malicious  and  groundless  prosecutions 
instituted  through  the  malice  of  their  ofl&cers.^*  "The  old  doc- 
trine was  that  a  corporation  was  not  so  liable,  because  mahce  is 
the  gist  of  the  action,  and  it  was  said,  that  mahce  could  not  be 
imputed  to  a  mere  legal  entity,  which  having  no  mind  could  have 
no  motive,  and,  therefore,  no  malice,  and  this  narrow  view  still 
prevails  to  some  extent.  But  the  steady  process  of  judicial 
evolution  has  led  to  the  establishment,  in  some  of  the  courts,  of 
the  just  doctrine  of  the  civil  responsibility  of  a  corporation  for 
the  acts  of  the  sentient  persons  who  represent  it,  and  through 
whom  it  acts,  and  of  the  Hability  of  a  corporation  for  the  acts 
of  its  agents  under  the  conditions  that  attach  to  individuals."  ^^ 

against  wrong;  and  if  its  property  is  injured  by  slander,  it  has  no  means  of 
redress  except  by  action.  Thei-efore  it  appears  to  me  clear  that  a  corpora- 
tion at  common  law  may  maintain  an  action  for  a  libel  by  which  its  prop- 
erty is  injured." 

66  See  §§  313,  317,  herein. 

67  United  States:  Copley  v.  Grover  &  Baker  Sewing  Machine  Co.,  2  Woods 
(U.  S.  C.  C),  494,  Fed.  Cas.  No.  3,213. 

Alabama:  Jordan  v.  Alabama  Great  Southern  Rd.  Co.,  74  Ala.  85,  49  Am. 
Rep.  800. 

Illinois:  Springfield  Engine  &  Threshing  Co.  v.  Green,  25  III.  App.  106 
(so,  although  corporation  can  only  act  through  its  agents). 

Indiana:  Pennsylvania  Co.  v.  Waddle,  100  Ind.  138  (arrest  by  agent  em- 
ployed by  corporation  to  detect  offenders  against  its  property  and  arrest 
them) . 

Maryland:  Carter  v.  Howe  Machine  Co.,  51  Md.  290,  34  Am.  Rep.  311 
(action  lies  against  a  corporation  aggregate  for  malicious  prosecution). 

Massachusetts:  Reed  v.  Home  Savings  Bank,  130  Mass.  443,  39  Am.  Rep. 
468  (such  an  action  lies  against  a  savings  bank,  citing  numerous  cases  to 
the  general  point  that  such  an  action  lies  against  a  corporation). 

Mississippi:  Williams  v.  Planters'  Ins.  Co.,  57  Miss.  759,  34  Am.  Rep. 
494  (liable  to  such  action  like  a  natural  person). 

New  Jersey:  Vance  v.  Erie  Ry.  Co.,  32  N.  J.  L.  334,  90  Am.  Dec.  665. 

New  York:  Morton  v.  Metropolitan  I.ife  Ins.  Co.,  34  Hun  (N.  Y.),  366. 

Compare  Owsley  v.  Montgomery  &  West  Point  Rd.  Co.,  37  Ala.  560. 

68  Gillett  v.  Missouri  Valley  Rd.  Co.,  55  Mo.  315,  17  Am.  Rep.  653. 

69  Williams  v.  Planters'  Ins.  Co.,  57  Miss.  759,  34  Am.  Rep.  494,  per  Camp- 
bell, J.    See  §  317,  herein. 

"It  was  contended  at  the  argument,  that  an  action  for  malicious  pros- 

558 


ACTIONS    EX    DELICTO  §  337 

To  sup|)ort  a  judgment  for  the  malicious  prosecution  of  a 
civil  action,  it  must  be  alleged  and  proved  that  sueh  action  was 
prosecuted  without  probable  cause,  with  malice,  its  termination 
in  favor  of  defendant,  and  damages  to  defendant  over  and  above 
the  taxable  costs  in  the  case.'" 

§  337.  Wrongfully  Suing  Out  Attachment.'^ 

An  action  may  be  maintained  against  a  corporation  to  re- 
cover damages  for  wrongfully,  and  without  just  or  probable 
cause  obtaining  and  levying  an  order  of  attachment  upon  per- 
sonal property.'^  And  in  an  action  on  the  case  against  a  corpo- 
ration for  suing  out  an  attachment  without  sufficient  cause 
and  maliciously  the  corporation  is  to  be  held  Hable  in  all  cases 
where  an  individual  would  be  responsible  under  similar  circum- 
stances,'^   So  a  corporation  may  be  held  liable  for  exemplary 

ecution  so  differs  from  other  actions  that  it  cannot  be  maintained  against 
a  corporation.  But  although,  in  order  to  maintain  such  an  action,  both 
mahce  and  want  of  probable  cause  must  be  found,  yet  proof  of  want  of 
probable  cause,  will  warrant  the  jury  in  inferring  malice.  Mitchell  v.  Jen- 
kms,  5  B.  &  Ad.  588;  s.  c,  2  Nev.  &  Man.  301;  Stewart  v.  Sonneborn,  98 
U.  S.  187,  25  L.  ed.  116;  Stone  v.  Crocker,  24  Pick.  81;  Ripley  v.  McBarron, 
125  Mass.  272.  And,  by  the  great  weight  of  modern  authority,  a  corpora- 
tion may  be  liable  even  when  a  fraudulent  or  malicious  intent  in  fact  is 
necessary  to  be  proved,  the  fraud  or  malice  of  its  authorized  agents  being 
imputable  to  the  corporation;  as  in  actions  for  fraudulent  representations: 
National  Exchange  Co.  v.  Drew,  2  Macq.  103;  New  Brunswick  &  Canada 
Ry.  V.  Conybeare,  9  H.  L.  Cas.  711,  738,  740;  Barwick  v.  English  Joint- 
Stock  Bank,  L.  R.  2  Ex.  259,  for  libel:  Philatlelphia,  Wilmington  &  Balti- 
more Rd.  Co.  v.  Quigley,  21  How.  (62  U.  S.)  202,  16  L.  ed.  73;  Whitfield 
v.  Southeastern  Ry.,  E.  B.  &  E.  115;  or  for  malicious  prosecution:  Vance  v. 
Erie  Ry.,  32  N.  J.  L.  334;  Copley  v.  Grover  &  Baker  Co.,  2  Woods  (U.  S. 
C.  C),  494;  Goodspeed  v.  East  Haddam  Bank,  22  Conn.  530;  Carter  v. 
Howe  Machine  Co.,  51  Md.  290;  Wheless  v.  Second  Nat.  Bank,  1  Baxter 
(Tenn.),  469;  Williams  v.  Planters'  Ins.  Co.,  57  Miss.  759;  Iron  Mountain 
Bank  v.  Mercantile  Bank,  4  Mo.  App.  505;  Walker  v.  Southeastern  Railway, 
L.  R.  5  C.  P.  640;  Edwards  v.  Midland  Ry.,  6  Q.  B.  D.  287,"  per  Lord,  J., 
in  Reed  v.  Home  Savings  Bank,  130  Mass.  443,  39  Am.  Rep.  468. 

70  Carbondale  Investment  Co.  v.  Burdick,  67  Kan.  329,  72  Pac.  781. 

71  See  §§  313,  317,  herein. 

72  Western  News  Co.  v.  Wilmarth,  33  Kan.  510,  6  Pac.  786,  evidence  as  to 
exemplary  damages  also  considered. 

73  Wheless  v.  Second  National  Bk.,  60  Tenn.  469,  25  Am.  Rep.  783. 

559 


§  338  ACTIONS  AT   LAW   CONTINUED — 

damages  in  suing  out  an  attachment  wrongfully  and  mali- 
ciously.^^ 

§  338.  Conspiracy — Instances. 

Where  a  railroad  company  is  sued  with  others  for  a  con- 
spiracy to  expel  plaintiff  from  a  brotherhood  of  locomotive 
engineers  and  the  railroad  did  not  and  could  not  actually  par- 
ticipate in  the  act  of  expelling  him  from  the  order,  its  liabiHty 
must  rest  upon  the  ground  alone  of  the  conspiracy;  and  where 
the  jury  distinctly  found  for  the  defendants  other  than  the  rail- 
road company  and  thereby  acquitted  all  other  defendants  from 
having  entered  into  the  conspiracy  with  the  railroad  company, 
and  the  latter  is  found  the  only  guilty  party,  it  follows  that  an 
acquittal  of  all  other  defendants  acquitted  said  railroad  com- 
pany, as  a  conspiracy  cannot  be  formed  by  one  person.^^ 

A  corporation  owning  the  principal  theaters  giving  burlesque 
shows  in  the  chief  cities  of  the  country,  by  requiring  the  owners 
of  such  shows  to  agree  not  to  play  in  any  theaters  not  owned  or 
controlled  by  it  as  a  condition  of  booking  such  shows  for  its  own 
theaters,  is  exercising  a  legal  right  where  the  number  of  com- 
panies with  which  such  agreement  is  made  is  not  greater  than  is 
reasonably  necessary  to  supply  its  own  theaters  with  suitable 
attractions.  The  fact  that  such  an  agreement  caused  some  of 
the  companies  to  rescind  prior  bookings  made  with  another 
theater  not  controlled  by  the  syndicate  does  not  render  it  liable 
to  the  owner  of  the  theater  so  injured,  even  though  it  caused 
financial  loss  and  practically  prevented  the  other  manager 
from  obtaining  suitable  attractions.  This  is  true,  although  it 
appears  that  the  sjmdicate  bore  an  ill  will  to  the  theater  owner 
so  ruined  and  desired  to  eliminate  competition.  If  the  means 
employed  to  do  an  act  are  lawful,  it  is  of  no  consequence  that 
the  motive  which  induced  the  act  was  malicious.'^ 

74  Jefferson  County  Savings  Bk.  v.  Ebom,  84  Ala.  529,  4  So.  386,  suit  was 
one  on  an  attachment  bond  claiming  damages  both  actual  and  exemplary. 

75  St.  Louis  Southwestern  Ry.  Co.  of  Texas  v.  Thompson,  102  Tex.  89, 
113  S.  W.  144,  rev'g  108  S.  W.  453. 

78Roseneau  v.  Empire  Circuit  Co.,  115  N.  Y.  Supp.  511,  131  App.  Div. 
429  (action  for  alleged  unlawful  conspiracy  maliciously  formed  to  ruin  the 

560 


ACTIONS    EX    DELICTO  §  339 

§  339.  Fraud  and  Deceit — InstancesJ^ 

The  essential  elements  necessary  to  constitute  a  cause  of 
action  for  deceit  are  (a)  representations;  (b)  falsity;  (c)  scienter; 
(d)  deception;  (e)  injury.  To  these  elements,  however,  should 
be  added  another  qualification,  and  that  is  that  the  representa- 
tion should  have  been  intended  to  influence  the  action  of  the 
person  injured  by  them,  that  is,  to  influence  the  action  of  the 
particular  person  defrauded  or  the  action  of  a  class  of  which  he 
is  a  constituent  member.  If  addressed  to  the  public  generally 
or  to  a  class,  then  any  person  belonging  to  the  class  may  sue; 
if  addressed  to  a  limited  class  only  as  the  persons  intended  to 
be  influenced,  then  as  a  rule  persons  outside  that  class  with 
whom  the  persons  making  the  statement  have  no  dealings  but 
who  may  have  been  injured  by  reliance  upon  such  statements 
independently  coming  to  their  knowledge  cannot  maintain  an 
action  upon  them  for  fraudulent  deceit.'^* 

business  of  a  theater  of  which  plaintiff  was  the  receiver  with  authority  by 
order  of  court  to  continue  the  action). 

77  See  §  313,  herein. 

78  Greene  v.  Mercantile  Trust  Co.,  Ill  N.  Y.  Supp.  802  [aff'd  in  (mem.) 
128  App.  Div.  914,  112  N.  Y.  Supp.  1131],  per  Wheeler,  J.,  a  case  of  pro- 
spectus to  invite  subscriptions  to  "bonds"  and  "stocks"  of  a  company. 

What  viust  appear  or  be  shown  in  order  to  sustain  action  for  fraud  or  de- 
ceit; essentials;  prerequisites,  see  the  following  cases: 

United  States:  Farwell  v.  Colonial  Trust  Co.  (U.  S.  C.  C.  A.),  147  Fed.  480, 
78  C.  C.  A.  22;  Stratton's  Independence  v.  Dines,  135  Fed.  449,  68  C.  C.  A. 
161,  aff'g  126  Fed.  968. 

Alabama:  Hartford  Fire  Ins.  Co.  v.  Kirkpatrick,  111  Ala.  456,  20  So.  651; 
Clark  V.  Dunham  Lumber  Co.,  86  Ala.  220,  5  So.  560. 

Arkansas:  Binghamton  Trust  Co.  v.  Auten,  68  Ark.  299,  82  Am.  St.  Rep. 
295,  57  S.W.  1105. 

Georgia:  Lewis  v.  Equitable  Mtge.  Co.,  94  Ga.  572,  21  S.  E.  224. 

Illinois:  Educational  Co.  v.  Taggart,  121  111.  App.  567. 

Iowa:  King  v.  Sioux  City  Loan  &  Im.  Co.,  76  Iowa,  11,  39  N.  W,  919. 

Maine:  Atlas  Shoe  Co.  v.  Rechard,  —  Me.  206,  66  Atl.  390;  Skowhegan 
First  Nat.  Bk.  v.  Maxfield,  83  Me.  576,  22  Atl.  479. 

Maryland:  Donnelly  v.  Baltimore  Trust  &  Guarantee  Co.,  102  Md.  1, 
61  Atl.  301. 

Massachusetts:  Nash  v.  Minnesota  Title  Ins.  &  T.  Co.,  163  Mass.  574, 
40  N.  E.  1039,  28  L.  R.  A,  753;  Dawe  v.  Morris,  149  Mass.  188,  4  L.  R.  A. 
102,  21  N.  E.  313;  Deming  v.  Darling,  148  Mass.  504,  20  N.  E.  107,  2  L.  R. 
A.  743. 

Missouri:  Remmers  v.  Remmers,  217  Mo.  541,  117  S.  W.  1117. 

36  5G1 


§  339  ACTIONS  AT  LAW  CONTINUED — 

Statements  in  a  prospectus  issued  b}'  a  trust  company,  offer- 
ing for  sale  the  entire  capital  stock  of  a  mining  corporation 
capitalized  at  fifty  thousand  dollars;  that  the  corporation  had 
been  operated  for  two  years  at  a  large  profit;  that  the  net  earn- 
ings, after  deducting  all  royalties  and  expenses  for  the  six 
months  preceding  the  issuing  of  the  prospectus,  were  twelve 
thousand,  one  hundred  and  thirty-four  dollars  and  twenty 
cents,  all  of  which  was  applicable  to  dividends;  that  it  was  the 
intention  to  ])ay  one  or  one  and  a  half  per  cent  dividends  semi- 
monthly and  extra  dividends  in  addition  thereto  as  often  as 
should  be  deemed  prudent,  reserving  at  all  times  sufficient  cash 
on  hand  to  cover  any  contingency  that  might  arise,  amount  to 
something  more  than  a  mere  expression  of  an  intention  to  pay 
dividends,  and  the  falsity  of  such  representations  will  furnish 
the  basis  of  an  action  of  fraud  against  the  trust  company  by 
persons  who  purchase  stock  of  the  mining  company  in  reliance 
thereon.  The  measure  of  damages  recoverable  in  such  an  ac- 
tion is, the  difference  between  what  would  have  been  the  value 
of  the  stock  if  the  representations  had  been  true  and  the  actual 
value  of  the  stock/^ 

Nebraska:  American  Bldg.  &  L.  Assoc,  v.  Bear,  48  Neb.  455,  67  N.  W. 

500. 

New  York:  Rothmiller  v.  Stein,  143  N.  Y.  581,  62  N.  Y.  St.  Rep.  788, 
38  N.  E.  718,  26  L.  R.  A.  148;  Scarsdale  Pub.  Co.  Colonial  Press  v.  Carter,  116 
N.  Y.  Supp.  731,  735,  63  Misc.  271;  Albany  Hardware  &  Iron  Co.  v.  Day, 
42  N.  Y.  Supp.  971,  11  App.  Div.  230. 

Tennessee:  Barnard  v.  Roane  Iron  Co.,  85  Tenn.  139,  2  S.  W.  21. 

Texas:  Cohen  Brothers  v.  Missouri,  Kansas  &  T.  Ry.  Co.  of  Tex.  (Tex. 
Civ.  App.,  1906),  98  S.  W.  437. 

Wisconsin:  Hurlbert  v.  T.  D.  Kellogg  Lumber  &  Mfg.  Co.,  115  Wis.  225, 
91  N.  W.  673;  Montreal  River  Lumber  Co.  v.  Mihills,  80  Wis.  540,  50  N. 
W.  507. 

79  Benedict  v.  Guardian  Trust  Co.,  86  N.  Y.  Supp.  376,  91  App.  Div.  103, 
aff'd  in  (mem.)  180  N.  Y.  558,  73  N.  E.  1120. 

When  prospectus  issued  to  obtain  increase  of  capital  is  fraudulent  as  to 
overvaluation  of  assets,  see  Bartol  v.  Walton  &  W.  Co.  (U.  S.  C.  C),  92  Fed. 
13. 

When  prospectus  issued  by  corporation  to  obtain  increase  of  capital 
stock  is  not  fraudulent  as  to  estimate,  see  Bartol  v.  Walton  &  W.  Co.  (U.  S. 
C.  C),  92  Fed.  13. 

When  prospectus  of  promoter  as  to  value  of  land  to  be  transferred  to 

562 


ACTIONS    EX    DELICTO  §  339 

The  failure  of  an  agent,  employed  by  a  corporation  to  solicit 
subscriptions  to  a  syndicate  agreement,  to  communicate  to  his 
principal  the  withdrawal  of  a  subscriber  to  the  syndicate  agree- 
ment, does  not  render  such  agent  liable  to  the  withdrawing 
subscriber,  as  whatever  duty  was  incumbent  upon  the  agent  in 
this  respect  it  was  due  to  his  principal  and  not  to  the  withdraw- 
ing subscriber.  "If  any  cause  of  action  could  be  based  upon 
the  action  of  the  defendants  in  informing  plaintiff  that  his 
subscription  was  in  process  of  cancellation  it  would  be  only  an 
action  at  law  for  damages,  and  no  such  action  would  lie,  if  at 
all,  unless  it  appeared  that  the  statement  was  false,  that  plain- 
tiff believed  it  and  in  reliance  upon  it  did  or  refrained  from 
doing  something,  and  that  he  thereby  suffered  damage."  *° 
Where  b}^  fraud  of  its  agent,  an  express  company  induces  one 
to  deliver  it  money  to  be  carried  and  delivered  to  a  fictitious 
person,  and  the  money  is  delivered  by  the  company  to  such 
agent,  and  is  embezzled  by  him,  the  shipper  can  recover  of  the 
company  therefor  in  an  action  for  money  had  and  received.*^ 
Fraud  does  not  exist  as  a  matter  of  law  merely  because  the 
corporate  name  is  similar  to  that  of  a  copartnership  under 
which  business  had  theretofore  been  done  by  the  charter  mem- 
bers.*^ A  complaint  alleged  in  substance  that  the  stock  of  the 
H.  V.  Manufacturing  Company  was  one  hundred  and  twenty 
thousand  dollars,  of  which  the  plaintiff's  husband  owned  sixty 
thousand  dollars,  and  his  brothers,  the  defendants,  C.  V.  & 
W.  v.,  the  rest;  that  the  plaintiff's  husband  died,  and  she  suc- 
ceeded to  the  ownership  of  his  stock;  that  her  said  two  brothers- 
in-law,  and  their  lawyer,  defendant  W.,  represented  to  the 
plaintiff  that  the  company  was  insolvent,  and  thereby  induced 
her  to  unite  with  them  in  a  petition  for  dissolution  of  the  com- 
pany, she  believing  the  same;  that  the  representation  was 

corporation  is  not  fraudulent,  see  Milwaukee  Cold  Storage  Co.  v.  Dexter, 
99  Wis.  414,  74  N.  W.  976,  40  L.  R.  A.  837. 

80  Eames  v.  Brunswick  Construction  Co.,  94  N.  Y.  Supp.  24,  104  App. 
Div.  566. 

81  Southern  Express  Co.  v.  Bank  of  Tupelo,  108  Ala.  517,  18  So.  664. 

82  Bristol  Bank  &  T.  Co.  v.  Jonesboro  B.  &  T.  Co.,  101  Tenn.  545,  48 
S.  W.  228. 

563 


§  339  ACTIONS  AT  LAW  CONTINUED — 

false,  and  known  by  them  to  be  false,  and  was  made  to  induce 
the  plaintiff  to  join  in  a  dissolution  of  the  company,  so  as  to 
enable  the  said  defendants  C.  V.  &  W.  V.  to  acquire  and  suc- 
ceed to  the  business  of  the  company  after  such  dissolution; 
that  they  did  organize  a  new  company  with  another  one  of  the 
defendants,  J.  V.,  and  acquire  and  continue  the  said  business; 
and  that  the  plaintiff's  stock  was  thereby  made  valueless.  No 
fraud  was  alleged  against  J.  V.  It  was  held  that  the  foregoing 
stated  a  good  cause  of  action  for  fraud  against  all  the  defend- 
ants except  J.  V.^^ 

The  New  York  Code  of  Civil  Procedure  *'*  does  not  operate  to 
preclude  parties  who  purchased  stock  in  rehance  upon  false 
representations  from  assigning  their  claims  to  some  of  their 
number,  for  the  purpose  of  enabling  the  latter  to  bring  an  ac- 
tion to  recover  the  entire  damages  resulting  from  the  fraud. *^ 

If  the  plaintiff's  officers  were  negligent  in  not  discovering  a 
fraud,  that  fact  would  not  afford  a  defense.  When  one  party 
has  been  guilty  of  an  intentional  and  deliberate  fraud  by  which 
to  his  knowledge  another  party  has  been  misled  or  influenced 
in  his  action,  he  cannot  escape  the  legal  consequences  of  his 
fraudulent  conduct  by  showing  that  the  fraud  might  have  been 
discovered  had  the  party  whom  he  deceived  exercised  reason- 
able dihgence  and  care.*^ 

One  who  has  been  induced  to  convey  his  property  by  fraud 
or  deceit  has  an  election  of  remedies,  either  to  bring  an  action 
to  set  aside  the  conveyance,  unless  the  property  has  passed 
into  ownership  of  a  purchaser  for  value  without  notice,  or, 
allowing  the  conveyance  to  stand,  he  may  sue  to  recover  dam- 
age for  the  pecuniary  injury  inflicted  upon  him  by  the  fraud. 
Retaining  the  purchase  price  is  not,  in  the  latter  case,  a  ratifi- 
cation of  the  deed.*^ 

83  Vogt  V.  Vogt,  104  N.  Y.  Supp.  164,  119  App.  Div.  518. 

84  N.  Y.  Code  of  Civil  Proc,  §§  73,  77. 

85  Benedict  v.  Guardian  Trust  Co.,  86  N.  Y.  Supp.  376,  91  App.  Div.  103, 
afT'd  in  (mem.),  180  N.  Y.  558,  73  N.  E.  1120. 

80  Eastern  Trust  &  Banking  Co.  v.  Cunningham,  103  Me.  455,  70  Atl.  17. 
87  Modlin  V.  Roanoke  Ry.  &  Navigation  Co.,  145  N.  C.  218,  58  S.  E.  1075 
(civil  action  to  recover  damages  for  fraud  and  deceit). 

564 


ACTIONS    EX    DELICTO  §  339 

To  support  an  action  for  deceit,  the  plaintiff  must  show  that 
the  defendant  intentionally  made  false  representations  to  him, 
with  the  intent  that  he  should  act  upon  them,  or  in  such  manner 
as  would  naturally  induce  him  to  act  upon  them,  that  the  repre- 
sentations were  material,  and  that  they  were  known  to  the  de- 
fendant to  be  false,  or  being  of  matters  susceptible  of  knowl- 
edge, were  made  as  of  a  fact  of  his  own  knowledge,  that  the 
plaintiff  was  thereby  induced  to  give  credit  or  part  with  ]:)rop- 
erty,  that  he  was  deceived,  and  that  he  was  injured.*^ 

Pending  a  valid  option  to  purchase  land,  the  party  holding 
the  option  is  the  only  one  who  can  make  a  sale  of  it  or  fix  a 
price.  A  representation,  therefore,  by  the  holder  of  the  option 
that  he  owns  the  land,  and  that  it  cannot  be  bought  for  less 
than  a  stated  sum  is  not  such  a  fraud  upon  a  purchaser  from 
him  as  will  entitle  such  purchaser  to  recover  damages  for  de- 
ceit. The  question  of  ownership  was  immaterial,  and  the  price 
was  under  his  control.  The  mere  fact  that  an  option  is  taken 
for  the  purpose  of  speculation  does  not  constitute  fraud  or  un- 
fair dealing  on  the  part  of  the  person  taking  the  option. ^^ 

Under  a  Maine  decision  it  appeared  that  the  corporation  of 
which  the  defendant  was  treasurer  had  an  account  in  the  plain- 
tiff bank  in  Bangor,  and  another  in  a  bank  in  Gardiner,  in  both 
of  which  places  it  was  engaged  in  business.  For  many  months 
prior  to  the  drawing  of  the  checks  which  were  the  basis  of  the 
action,  the  defendant  had  practiced  what  is  known  as  "  Kiting" 
checks  between  the  plaintiff  bank  and  the  bank  in  Gardiner. 
He  deposited  daily  in  each  bank  checks,  drawn  on  the  other 
bank  to  meet  which  the  defendant  knew  were  no  available 
funds  in  the  drawee  bank,  and  which  he  knew  could  only  be 
met  by  the  deposit  of  other  similar  checks.  The  bank  at 
Gardiner  discovered  the  practice,  and  finally  refused  payment 
of  a  check  drawn  upon  itself,  which  the  defendant  had  de- 
posited in  the  plaintiff  bank,  and  which  had  been  forwarded  for 
collection,  and  caused  it  to  be  protested.    Before  the  plaintiff 

88  Eastern  Trust  &  Banking  Co.  v.  Cunningham,  103  Me.  455,  70  Atl.  17. 

89  Saxby  v.  Southern  Land  Co.,  109  Va.  196,  63  S.  E.  423  (error  in  judg- 
ment in  action  of  trespass  on  the  case). 

565 


§  340  ACTIONS  AT  LAW  CONTINUED — 

bank  had  notice  of  the  nonpayment  and  protest,  it  had  ac- 
cepted two  other  similar  checks,  credited  them  on  the  ac- 
count of  the  defendant's  corporation,  and  forwarded  them  for 
collection.  Payment  of  these  checks  was  refused,  and  they 
were  in  their  turn  protested.  The  result  was  that  the  plaintiff 
bank  lost  the  amount  of  the  three  checks,  less  a  small  balance 
which  was  to  the  credit  of  the  corporation  when  notice  of  non- 
l)ayment  was  first  received.  The  court  was  of  opinion  that  the 
evidence  did  not  warrant  a  finding  that  the  officers  of  the  plain- 
tiff bank  knew  of  the  "Eating"  practice.  On  the  contrary,  it 
was  considered  that  the  plaintiff  was  induced  to  give  credit  to 
the  defendant's  corporation  by  his  imphed  representation, 
which  was  false,  and  that  it  was  deceived  thereby.  Upon  these 
facts,  it  was  held  that  the  defendant  was  liable  in  an  action 
for  deceit.*^" 

§  340.  Trover  and  Conversion.^! 

Trover  may  be  maintained  against  a  corporation  aggregate. ^^ 
But  a  corporation  has  neither  a  general  or  special  right  to  the 
property  upon  which  to  maintain  an  action  of  trover,  where, 
prior  to  the  alleged  conversion  of  the  property,  it  has  trans- 
ferred the  notes  therefor,  retaining  title  to  the  property  in  ques- 
tion to  another.  ^^  Trover  lies  for  the  wrongful  conversion  of 
shares  of  stock  by  a  corporation,  and  any  act  of  dominion 
wrongfully  exercised  over  the  property  of  another  inconsistent 
with  his  rights  or  constituting  a  denial  thereof  may  be  treated 
as  a  conversion.   This  is  as  applicable  to  shares  of  stock  as  to 

90  Eastern  Trust  &  Banking  Co.  v.  Cunningham,  103  Me.  455,  70  Atl. 
17. 
81  See  §  313,  herein. 

92  Beach  v.  Fulton  Bank,  7  Cow.  (N.  Y.)  485. 

When  action  is  for  troxier  and  not  for  breach  of  contract  of  baihnent,  in  case 
of  wheat  stored  by  owner  under  agreement  for  storage,  also  for  purchase  by 
warehouseman,  and  refusal,  see  Kramer  v.  Northwestern  Elevator  Co.,  91 
Minn.  346,  98  N.  W.  96. 

Conversion  of  wheat;  measure  of  damages,  see  Dows  v.  National  Exchange 
Bank,  91  U.  S.  618,  23  L.  ed.  214. 

93  Union  Iron  Works  Co.  v.  Union  Naval  Stores  Co.,  157  Ala.  645,  47  So. 
652. 

566 


ACTIONS    EX    DELICTO  §  340 

other  property.    Such  conversion  may  be  by  the  corporation  or 
by  a  third  party.     If  the  corporation's  by-laws  or  a  statute 
require  that  transfers  of  stock  be  made  on  its  boolis,  a  wrongful 
refusal  by  the  corporation  to  make  such  transfer  constitutes 
a  conversion  of  the  stock.'*'*    If  a  bank  receives  the  proceeds  it 
is  liable  for  the  conversion  of  bonds  left  with  its  president  for 
exchange.^^    But  an  action  to  recover  damages  for  conversion 
of  corporate  stock  cannot  be  maintained  against  a  corporation 
by  one  who  has  not  the  legal  title  thereto.*'^    The  rule,  that  one 
who  comes  lawfully  into  possession  of  the  property  of  another 
cannot  be  charged  with  the  conversion  thereof  until  after  de- 
mand and  refusal,  has  no  application  wliore  the  lawful  custo- 
dian commits  an  overt  and  possible  act  of  conversion  by  an  un- 
lawful sale  or  disposition  of  the  property.    So  where  negotiable 
bonds  of  a  corporation,  issued  for  corporate  purposes  only,  and 
lawfully  in  the  custody  of  a  trust  company,  designated  as  trus- 
tee of  the  mortgage  executed  to  secure  the  bonds,  were  wrong- 
fully pledged  to  the  company  by  the  secretary  of  the  corpora- 
tion as  security  for  loans  to  himself,  personally,  the  apparent 
participation  of  the  company  in  the  wrongful  act  of  the  secre- 
tary, with  full  knowledge  thereof,  by  its  acceptance  of  the 
bonds  as  a  pledge,  did  not,  in  the  absence  of  a  demand  and  a 
refusal,  constitute  a  conversion;  for  it  might  still  have  elected 
to  hold  the  bonds  as  trustee.    But  where,  in  consideration  of 
the  payment  of  its  loan  to  said  secretary  by  a  certain  bank,  the 
trust  company  transferred  the  bonds  to  such  bank,  it  assumed 
to  treat  them  as  its  own  and  from  that  moment  was  guilty  of  a 
conversion  of  the  bonds,  and  no  demand  therefor  by  the  true 
owner  thereof  was  necessary.    Although,  at  the  time  the  bonds 
in  question  were  transferred  by  the  trust  company  to  said 
bank,  in  consideration  of  the  payment  by  the  latter  of  the 
secretary's  indebtedness  to  the  company,  the  bonds  had  been 

94  Herrick  v.  Humphrey  Hardware  Co.,  73  Neb.  809,  103  N.  W.  685,  119 
Am.  St.  Rep.  917. 

95  Van  Leuven  v.  First  Nat.  Bank  of  Kingston,  54  N.  Y.  651,  aff'g  6  Laws, 

373. 

96  Morrison  v.  Gold  Mountain  Gold  Min.  Co.,  52  Cal.  306.    What  does  not 
amount  to  such  a  conversion  also  decided. 

567 


§  340  ACTIONS  AT  LAW  CONTINUED — 

attached  in  an  action  brought  by  said  bank  against  the  secre- 
tary, that  fact  does  not  reheve  the  trust  company  from  the 
charge  of  conversion  arising  from  the  transfer  of  the  bonds; 
where  the  attachment  was  invalid  because  the  action  was 
brought  against  the  secretary  and  not  against  the  corporation 
which  owned  the  bonds,  and  where  the  trust  company  instead 
of  notifying  the  owner  of  the  bonds,  or  resisting  the  attach- 
ment action,  assumed  to  hold  the  bonds  as  pledgee,  and,  upon 
the  discontinuance  of  the  action  and  the  falling  of  the  attach- 
ment, voluntarily  turned  them  over  to  the  bank  in  considera- 
tion of  the  payment  of  the  secretary's  indebtedness  for  which 
the  bonds  were  pledged.^' 

WTien  the  manager  of  a  life  assurance  society  appoints  an 
agent  to  canvass  for  applications  and  collect  premiums  on  all 
policies  obtained  by  him,  which  premiums  so  collected  are  to 
be  paid  by  the  agent  to  the  manager  of  the  society,  then  as 
between  the  manager  and  agent  the  manager  has  a  special 
property  in  the  premiums  collected  by  the  agent  and  is  en- 
titled to  receive  them,  and  this  right  gives  him  a  remedy  against 
the  agent  upon  his  refusal  to  pay  over  the  same  as  directed. 
Legal  currency  may  be  the  subject  of  an  action  of  trover  as 
there  is  nothing  in  the  nature  of  money  making  it  an  improper 
subject  of  this  form  of  action  so  long  as  it  is  capable  of  being 
identified,  as  when  delivered  at  one  time,  by  one  act  and  in 
one  mass,  or  when  the  deposit  is  special  and  the  identical 
money  is  to  be  kept  for  the  party  making  the  deposit,  or  when 
wrongful  possession  of  such  property  is  obtained.  So  where 
the  relation  of  a  plaintiff  and  defendant  is  that  of  principal 
and  agent,  it  is  necessary  in  determining  whether  trover  or 
assumpsit  is  the  proper  remedy  for  money  collected  by  the 
agent  but  not  turned  over,  to  consider  the  distinctive  quality 
of  money  as  differing  from  other  kinds  of  property,  and  the 
character  and  conduct  of  the  agent  in  receiving  and  retaining 
the  money  collected  by  him.  From  its  nature  the  title  to 
money  passes  by  delivery,  and  its  identity  is  lost  by  being 

9'  McDonnell  v.  Buffalo  Loan,  Trust  &  Safe  Deposit  Co.,  19.3  N.  Y.  92, 
'85  N.  E.  801,  aff'g  104  N.  Y.  Supp.  625,  119  App.  Div.  243. 

5G8 


ACTIONS    EX    DELICTO  §  341 

changed  into  other  money  or  its  equivalent  in  the  methods 
ordinarily  used  in  business  for  its  safe-keeping  and  transmis- 
sion, and  an  agent  unless  restricted  by  his  contract  would 
violate  no  duty  assumed  by  him  by  adopting  these  methods 
in  dealing  with  the  money  of  his  principal.  Mere  failure  to 
deliver  such  property  in  specie  on  demand  would  not  be  tech- 
nical conversion.  Nor  would  the  refusal  to  pay  over  its  equiv- 
alent be  conclusive  evidence  of  its  conversion  in  the  sense  of 
the  law  of  trover,  but  might  be  the  ground  for  an  action  of 
assumpsit.  When  the  defendant  is  the  agent  of  the  plaintiff 
for  the  collection  and  paying  over  not  of  a  single  premium  of 
insurance  but  such  as  are  payable  for  all  policies  affected  by 
him  and  he  is  entitled  to  receive  as  commission  a  certain  per- 
centage of  such  premiums  when  paid  over,  an  action  of  trover 
by  the  principal  might  be  unjust  to  the  agent  by  depriving 
him  of  his  right  of  set-off  and  other  legal  defenses.  In  a  case 
where  the  relation  of  principal  and  agent  existed  between  the 
plaintiff  and  the  defendant  and  the  principal  brought  an  action 
of  trover  against  the  agent  for  money  alleged  to  have  been 
collected  by  the  agent  and  converted  to  his  own  use  it  was 
held,  that  under  all  the  circumstances  of  the  case  the  action 
could  not  be  maintained. ^^  If  a  person  wrongfully  works  a 
mine,  takes  out  ores  therefrom,  removes  them,  and  converts 
them  to  his  own  use  he  is  not  entitled,  in  an  action  to  recover 
their  value,  to  be  credited  with  the  cost  of  mining  the  ores.**® 

§  341.  Replevin — Claim  and  Delivery.^ 

A  certificate  of  stock  is  tangible  personal  property  which 
may  be  recovered  in  an  action  of  replevin.^  So  an  action  of 
replevin  by  the  owner  of  personal  property  will  lie  against  the 

98  Hazelton  v.  Locke,  104  Me.  164,  71  Atl.  661,  20  L.  R.  A.  (N.  S.)  35. 

99  Benson  Mining  &  S.  Co.  v.  Alta  Mining  &  S.  Co.,  145  U.  S.  428,  36  L.  ed. 
962,  12  Sup.  Ct.  877. 

1  See  §  313,  herein. 

2  0pperman  v.  Citizens'  Bank  of  Michigan  City  (Ind.  App.,  1908),  85 
N.  E.  991,  992,  citing  Smith  v.  Downey,  8  Ind.  App.  179,  34  N.  E.  823,  35 
N.  E.  568,  52  Am.  St.  Rep.  467;  Read  v.  Brayton,  143  N.  Y.  342,  38  N.  E. 
261;  Cook  on  Corp.  (4th  ed.),  §  577. 

569 


§  341  ACTIONS   AT    LAW    CONTINUED — 

person  who  has  such  personal  property  in  his  possession  and 
who  has  no  right  to  retain  it  as  against  the  owner.' 

A  boom  company  that  acquires  possession  of  logs  by  the 
maintenance  of  a  boom  in  violation  of  a  decree  of  court  is  a 
trespasser  and  wrongdoer  and  cannot  maintain  replevin  on 
the  theory  that  defendant  unlawfully  opened  plaintiff's  boom; 
since  in  replevin  the  plaintiff  must  succeed,  if  at  all,  upon  the 
strength  of  his  own  title."*  Replevin  cannot  be  maintained 
against  a  freight  agent  of  a  railroad  company,  where  he  has 
no  possession  or  control  of  the  property  except  as  agent  of 
the  company.^ 

Where  property  is  pledged  to  secure  specific  indebtedness, 
the  pledgee  has  no  right  to  hold  it  as  security  for  any  other 
obligation.^  If  the  pledgee  wrongfully  parts  with  the  property, 
or,  upon  tender  of  the  secured  debt,  refuses  to  return  it,  the 
pledgor  may  maintain  an  action  at  law  for  damages,  or,  where 
such  relief  is  appropriate,  to  regain  the  property  itself  by 
claim  and  delivery.  Or  he  may,  if  there  are  circumstances 
authorizing  a  demand  for  equitable  relief,  and  redemption  is 
possible,  bring  a  suit  to  establish  and  enforce  his  right  of  re- 
demption. Shares  of  corporate  stock,  however,  being  intan- 
gible property  cannot  be  recovered  in  an  action  of  claim  and 
delivery.' 

3  Opperman  v.  Citizens'  Bank  of  Michigan  City  (Ind.  App.,  1909),  85 
N.  E.  990,  992,  citing  McFadden  v.  Ross,  108  Ind.  512,  8  N.  E.  161;  Ault- 
man  v.  Forgery,  10  Ind.  App.  397,  34  N.  E.  829;  Fruits  v.  Elmore,  8  Ind. 
App.  278,  34  N.  E.  829;  Ferguson  v.  Day,  6  Ind.  App.  1.38,  33  N.  E.  213; 
Rose  V.  Cash,  58  Ind.  278;  Walpole  v.  Smith,  4  Blackf.  (Ind.)  304;  Bradley  v. 
Michael,  1  Ind.  551;  Read  v.  Brayton,  143  N.  Y.  .342,  38  N.  E.  261. 

*  North  Shore  Boom  &  Driving  Co.  v.  Nicomen  Boom  Co.,  52  Wash.  564, 
101  Pac.  48. 

6  McDougall  V.  Travis,  24  Hun  (N.  Y.),  590. 

8  Cal.  Civ.  Code,  §  2891;  Reynes  v.  Dumont,  1.30  U.  S.  354,  9  Sup.  Ct.  486, 
32  L.  ed.  934. 

■>  BeU  V.  Bank  of  CaUfornia  (Cal.,  1908),  94  Pac.  889,  891. 


570 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS 


CHAPTER  XXI 


ACTIONS   AT    LAW    CONTINUED — MANDAMUS 


§  342.  Mandamus  Defined.  §   3.%. 

343.  Nature  of  Mandamus. 

344.  Nature    of    Mandamus    Con- 

tinued— Is  a  Discretionary       357. 
Writ. 

345.  When  Mandamus  Lies,  Gen- 

erally. 358. 

346.  Mandamus    to    Control    Ju- 

dicial Discretion. 

347.  Mandamus     Will     Not     Be 

Granted     When     Fruitless 

and  Unavailing.  359. 

348.  Mandamus     Does     Not     Lie 

Where  There  Is  a  Plain  and        360. 
Adequate  Remedy. 

349.  Statutory     Remedies — When 

and   When    Not   Exclusive       36L 
of  Mandamus. 

350.  When     Mandamus     Is     the        362. 

Proper   Remedy   Although 
There  Is  Another  Remedy 
— Action      for     Damage —       363. 
Equity. 
35L  When  Remedy  Is  by  Action 

at  Law  and  Not  by  Man-       364. 
damns. 

352.  When     Proper     Remedy     Is 

Quo     Warranto     and     Not       365. 
Mandamus. 

353.  When     Remedy     to     Forfeit 

Franchise,    and    Not   Man-       366. 
damns,  Is  Proper. 

354.  When  Remedy  in  Equity  and        367. 

Not  by  Mandamus — In- 
junction— Mandatory  In- 
junction. 

355.  Mandamus — Enforcement    of       368. 

Private  or  Personal  Rights 
— Contractual  Relations. 


When  Writ  Lies  to  Enforce 
Discretionary  or  Ministe- 
rial Duties. 

When  Writ  Does  Not  Lie  to 
Enforce  Discretionary  Du- 
ties. 

When  Mandamus  Lies  and 
Does  Not  Lie  to  Compel 
Filing  Articles  of  Incorpo- 
ration and  Certificates — 
Issuance  of  Certificates. 

When  Mandamus  Lies — Elec- 
tion of  Corporate  Officers. 

When  Mandamus  Lies  to 
Compel  Order  Revoking 
Charter  to  Be  Vacated. 

When  Mandamus  Lies  to  Re- 
instate Member. 

Mandamus  Lies  to  Enforce 
Right  of  Inspection  of 
Books  of  Corporation. 

Mandamus  Lies  to  Compel 
Surrender  of  Corporation's 
Books,  Seal  and  Papers. 

Mandamus  to  Compel  Trans- 
fer of  Certificates  of  Stock 
— Lost  Certificates. 

Mandamus  to  Control  Rates, 
Charges  and  Fares — Dis- 
crimination. 

When  Mandamus  Lies  Against 
Common  Carrier,  Generally. 

Mandamus  —  Limitation  of 
Remedy  Under  Act  to  Regu- 
late Commerce — Interstate 
Commerce  Commission. 

When  Mandamus  Lies  and 
Does  Not  Lie  Against  Rail- 
road Company. 

r)7i 


§§  342,  343  ACTIONS  at  law  continued — mandamus 

§  369.  When    Mandamus    Lies    and  §  374.  Jurisdiction     of      Mandamus 

Does      Not     Lie     Against  Proceedings. 

Street  Railroad  Company.  375.  Proper  or  Necessary  Parties, 

370.  When  Street  Railway  Com-  Generally. 

pany  Is  and   Is   Not   En-       376.  Parties      Plaintiff  —  Private 
titled  to  Mandamus.  Persons. 

371.  When    Mandamus    Lies    and        377.  Parties — Attorney-General. 

Does  Not  Lie  Against  Tele-       378.  Parties — Defendants. 

phone  Companies.  379.  Necessity   of   Demand   Upon 

372.  When    Mandamus    Lies    and  or  Notice  to  Party  Before 

Does  Not  Lie  Against  Tel-  Bringing  Mandamus, 

egraph  Companies.  380.  Defenses  Available,  Generally. 

373.  When    Mandamus    Lies    and       381.  Pleadings  —  Sufficiency       of 

Does  Not  Lie  Against  Wa-  Showing    —   Demurrer  — 

ter  Companies.  Judgment — Appeal. 

§  342.  Mandamus  Defined. 

Mandamus,  as  defined  by  the  Kentucky  Code  *  and  the  courts, 
is  a  writ  commanding  the  performance  of  some  duty,  in  which 
performance  the  apphcant  for  the  writ  is  interested,  or  by  the 
nonperformance  of  which  he  is  aggrieved  or  injured.^ 

§  343.  Nature  of  Mandamus. 

The  remedy  by  mandamus  is  not  one  which  is  accorded  ex 
debito  justitm.  The  court  is  a  prerogative  one,  and  unless  the 
right,  which  the  relator  seeks  to  enforce,  is  clear  and  un- 
equivocal, a  mandamus  will  not  be  granted.^  It  is  declared, 
however,  that  "mandamus,  even  in  the  common-law  view  of  it, 
long  ago  ceased  to  be  a  prerogative  writ,  and  became  gradually, 
both  in  the  English  and  American  courts,  to  be  regarded  as  a 
writ  of  right.  Since  the  breaking  down  by  the  codes  of  so  many 
of  the  formal  barriers  between  equity  and  law,  the  remedy  by 
mandamus,  however  different  its  legal  history  from  the  writ  of 
injunction,  is  none  the  less  elastic  and  adaptable  within  its 

1  Ky.  Civ.  Code  Pract.,  §  477. 

2  Louisville  Home  Telephone  Co.  v.  City  of  Louisville,  130  Ky.  611,  113 
S.  W.  855.  See  McCoy  v.  State,  2  Marv.  (Del.)  543,  36  Atl.  81;  Sears  v. 
Kincaid,  33  Ore.  215,  53  Pac.  303. 

Writ  of  mandamus  is  either  alternative  or  'peremptory  under  New  York 
Code  of  Civ.  Proc,  §  2067. 

3  State  ex  rel.  v.  Latrobe,  81  Md.  222,  31  Atl.  788. 

572 


ACTIONS    AT   LAW    CONTINUED — MANDAMUS      §§  344,  345 

proper  sphere,  as  the  latter  is  within  its  sphere.  The  function 
of  each  is  by  summary  legal  intervention  to  prevent  wrong- 
doing. The  one  sets  the  law  in  motion  to  compel  the  doing  of 
what  should  be  done;  the  other  prevents  or  checks  threatened 
or  actual  wrongdoing."  "* 

§  344.  Nature  of  Mandamus  Continued — Is  a  Discretion- 
ary Writ. 

Mandamus  is  a  discretionary  writ.^  An  application  for  a  per- 
emptory writ  of  mandamus  is  addressed  to  the  sound  discre- 
tion of  the  court,  and  where  it  appears  that  the  facts  are  such 
as  to  justify  the  court  in  refusing  the  writ  as  a  matter  of  dis- 
cretion, a  Court  of  Appeals  will  not  interfere  unless  it  affirma- 
tively appears  in  the  order  denying  the  writ  that  the  court  did 
not  refuse  the  writ  in  the  exercise  of  its  discretion;  and  where  it 
does  not  appear  from  an  order  denying  an  application  for  such 
writ  that  the  court  below  refused  to  grant  the  writ  for  want  of 
power,  or  upon  any  other  question  of  law,  the  proceeding  is  not 
reviewable  in  a  Court  of  Appeals.^ 

§  345.  When  Mandamus  Lies,  Generally. 

The  writ  of  mandamus  can  only  be  used  to  enforce  duties 
and  obligations  clearly  imposed  upon  a  corporation  by  the 
charter  or  general  law,  and  not  to  enforce  and  establish  those  of 
doubtful  expediency  and  propriety.''  And  the  writ  cannot  be 
maintained,  unless  there  is  a  legal  right  in  the  applicant  for  the 

4  State  ex  rel.  Great  Falls  Water  Works  v.  Great  Falls  City  Council,  19 
Mont.  518,  537,  538,  49  Pac.  15,  per  Buck,  J. 

5  Citizens'  Life  Ins.  Co.  v.  Commissioner  of  Ins.,  128  Mich.  85,  87  N.  W. 
126,  30  Ins.  L.  J.  919;  Lamphere  v.  Grand  Lodge  Ancient  Order  U.  W.,  47 
Mich.  429. 

6  People  ex  rel.  Lekmaier  v.  Interurban  Ry.  Co.,  117  N.  Y.  296,  69  N.  E. 
596,  dismissing  appeal  from  83  N.  Y.  Supp.  622,  85  App.  Div.  407. 

7  Sherwood  v.  Atlantic  &  Danville  Ry.  Co.,  94  Va.  291,  306,  26  S.  E.  943, 

6  Am.  &  Eng.  R.  Cas.  (N.  S.)  670,  citing  or  quoting  from  Northern  Pac.  Rd. 
Co.  V.  Dustin,  142  U.  S.  492,  498,  499,  12  Sup.  Ct.  283,  285,  35  L.  ed.  1092; 
Union  Pacific  Rd.  Co.  v.  Hall,  91  U.  S.  343,  23  L.  ed.  428;  Commonwealth  v. 
Fitchburg-Rd.  Co.,  12  Gray  (Mass.),  180;  State  v.  Sioux  City  &  P.  Rd.  Co., 

7  Neb.  357,  374;  People  v.  Rome,  W.  &  O.  Rd.  Co.,  103  N.  Y.  106,  8  N.  E. 
369. 

573 


§  340  ACTIONS    AT    LAW    COJSTTINUED — MANDAMUS 

writ  and  a  corresponding  duty  imposed  on  the  respondent.^ 
Mandamus  is  a  proper  proceeding  to  compel  obedience  to  a 
city's  orders,  made  in  the  legal  exercise  of  its  police  powers, 
as  where  it  is  sought  to  compel  the  removal  of  poles  in  the  course 
of  street  improvements." 

§  346.  Mandamus  to  Control  Judicial  Discretion. 

A  writ  of  mandamus  cannot  be  issued  to  compel  the  court 
below  to  decide  a  matter  before  it  in  a  particular  way,  or  to  re- 
view its  judicial  action  had  in  the  exercise  of  legitimate  juris- 
diction.^'' So  the  rule  that  mandamus  will  not  lie  to  control 
the  judicial  discretion  of  an  inferior  court  does  not  apply  to  an 
attempt  of  that  court  to  exercise  its  discretion  on  subject-matter 
not  within  its  jurisdiction.^^  And  the  writ  will  not  lie  at  the 
instance  of  a  corporation  to  compel  the  court  to  vacate  an  order 
appointing  a  trustee. ^^  Again,'  the  fact  that,  in  the  administra- 
tion of  the  assets  of  an  insolvent  corporation  in  the  custody  of 
receivers,  summary  proceedings  are  resorted  to,  does  not,  in  it- 
self, affect  the  jurisdiction  of  the  Circuit  Court,  as  having  pro- 
ceeded in  excess  of  its  powers,  and,  where  notice  has  been 
given  and  hearing  had,  the  result  cannot  properly  be  interfered 
with  by  mandamus." 

Where  the  bankruptcy  court  in  adjudicating  a  corporation 
bankrupt  is  called  upon  to  decide,  and  does  decide,  a  question 
of  fact,  or  of  mixed  law  and  fact,  that  adjudication  cannot  be 
reviewed  by  proceedings  in  mandamus.     Mandamus  to  the 

8  Louisville  Home  Telephone  Co.  v.  City  of  Louisville,  130  Ky.  611,  113 
S.  W.  855:  State  ex  rel.  Patterson  v.  Wenzel,  55  Neb.  210,  75  N.  W.  579. 
See  State  ex  rel.  v.  Latrobe,  81  Md.  222,  31  Atl.  788,  noted  under  §  343, 
herein. 

9  Monongahela  City  v.  Monongahela  Elec.  L.  Co.,  12  Pa.  Co.  Ct.  Rep.  529, 
4  Am.  Elec.  Cas.  53. 

10  Rice,  In  re,  155  U.  S.  396,  39  L.  ed.  198,  15  Sup.  Ct.  194. 

11  Winn,  In  re,  213  U.  S.  458,  53  L.  ed.  873,  29  Sup.  Ct.  515.  Distinguish- 
ing Pollitz,  In  re,  206  U.  S.  .323,  51  L.  ed.  1081,  27  Sup.  Ct.  729;  Nebraska, 
Ex  parte,  209  U.  S.  436,  52  L.  ed.  876,  28  Sup.  Ct.  581. 

12  Electric  Park  Amusement  Co.  v.  Wayne,  Circuit  Judge,  155  Mich.  640, 
15  Det.  L.  N.  1083,  119  N.  W.  1095. 

13  Rice,  In  re,  155  U.  S.  396,  39  L.  ed.  198,  15  Sup.  Ct.  194. 

574 


ACTIONS    AT  LAW    CONTINUED— MANDAMUS     §§  o47,  348 

bankruptcy  court  to  dismiss  proceedings  in  bankruptcy  against 
a  corporation  because  the  petition  failed  to  show  that  the  prin- 
cipal business  of  the  bankrupt  was  trading,  printing,  pubhsh- 
ing,  mining,  manufacturing  or  a  mercantile  pursuit,  will  be  re- 
fused.^^ 

§  347.  Mandamus  Will  Not  Be  Granted  When  Fruitless 
and  Unavailing. 

A  mandamus  will  not  be  awarded  when  the  court  is  power- 
less to  make  it  effectual  and  where  it  would  be  fruitless  and  un- 
availing to  grant  the  order.  Thus  mandamus  will  be  refused 
where  it  appears  that  if  ordered  to  make  the  desired  extension 
of  its  railroad  it  would  be  financially  unable  to  obey  and  the 
writ  would  on  that  account  prove  ineffectual.  The  company's 
road  in  this  case  was  in  the  hands  of  another  corporation, 
which  was  in  the  hands  of  receivers  of  the  Federal  Circuit  Court, 
who  are  amenable  only  to  the  court  of  their  appointment,  and 
no  traffic  arrangements  could  be  compelled  with  another  in- 
dependent road  and  the  writ  would,  if  awarded,  be  wholly  un- 
availing.^^ So  the  writ  will  not  issue  to  compel  the  Secretary  of 
State  to  file  the  articles  of  association  of  a  foreign  corporation 
a  tontine  investment  company,  where,  subsequent  to  the  filing 
of  the  petition,  a  statute  has  become  operative  under  which  the 
rights  claimed  by  relator  have  been  abrogated. ^^  But  such 
writ  may  be  the  proper  remedy  in  a  case  where  an  injunction 
could  not  be  maintained  because  the  wrong  complained  of  had 
been  accomplished.^^ 

§  348.  Mandamus  Does  Not  Lie  Where  There  Is  a  Plain 
and  Adequate  Remedy. 

The  writ  of  mandamus  may  not  be  issued  in  any  case  where 
there  is  a  plain  and  adequate  remedy  in  the  ordinary  course  of 

14  Riggs,  Matter  of,  214  U.  S.  9,  53  L.  ed.  887,  29  Sup.  Ct.  598. 

15  Town  of  Strasburg  v.  Winchester  &  Strasburg  R.  Co.,  94  Va.  647,  27 
N.  E. 493. 

19  Preferred  Tontine  Mercantile  Co.  v.  Secretary  of  State,  133  Mich.  395, 
95  N.  W.  117. 
17  Golden  Star  Lodge  No.  1  v.  Watterson,  158  Mich.  696. 

575 


§  348  ACTIONS    AT   LAW    CONTINUED — MANDAMUS 

the  law.^*  So  in  Indiana  such  a  writ  is  not  proper  if  there  is  an- 
other adequate  remedy,  and  the  rule  does  not  obtain  that  such 
writ  is  not  proper  unless  there  is  no  other  remedy .^^  And  the 
writ  oannot  be  used  to  perform  the  office  of  a  writ  of  error  or  an 
appeal  even  if  no  appeal  or  writ  of  error  is  given  by  law.-" 

The  "adequate  remedy"  which  will  bar  mandamus  must  be 
such  as  reaches  the  fend  intended,  and  actually  compels  the 
performance  of  the  duty  in  question.  It  must  be  equally  as 
convenient,  beneficial  and  effective,  as  the  proceeding  by  man- 
damus. The  remedy  by  repeated  actions  at  law  to  recover  dam- 
ages for  a  constantly  recurring  and  continued  violation  of  duty 
is  not  adequate.^^  This  writ  is,  however,  the  duly  sufficient  rem- 
edy where  the  legal  remedy  is  uncertain,  indefinite  and  inad- 
equate.^^ And  the  general  rule  is  that  mandamus  will  be  granted 
whenever  there  is  a  legal  as  distinguishable  from  an  equitable 
right,  without  a  specific  legal  remedy.  And  this  principle  has 
been  applied  to  the  collection  of  a  tax,  where  there  was  no  other 
adequate  remedy  for  collecting  the  tax,  and  a  mandamus  was 
issued.^ 

18  Horton  v.  State,  60  Neb.  701,  84  N.  W.  87.  See  also  Atlantic  City  Rd., 
In  re,  164  U.  S.  633,  41  L.  ed.  579,  17  Sup.  Ct.  208;  State  ex  rel.  Norcross  v. 
Board  of  Medical  Examiners,  10  Mont.  162,  25  Pac.  440;  State  ex  rel.  Jones 
V.  Williams,  54  Neb.  154,  74  N.  W.  396;  Fraternal  Mystic  Circle  v.  State,  39 
Ohio  L.  J.  43,  48  N.  E.  940. 

19  State  ex  rel.  Morgan,  Assessor,  v.  Real  Estate  Bldg.  &  Loan  Assoc,  151 
Ind.  502,  51  N.  E.  1061,  a  case  of  mandamus  to  permit  county  assessor  to 
inspect  corporation  books. 

20  Rice,  In  re,  155  U.  S.  396,  39  L.  ed.  198,  15  Sup.  Ct.  194.  See  Riggs, 
Matter  of,  214  U.  S.  9,  53  L.  ed.  887,  29  Sup.  Ct.  598;  Hudson  Oil  &  Supply 
Co.,  Matter  of,  214  U.  S.  487  (same  principle;  prohibition);  Huguley  Mfg. 
Co.,  In  re,  184  U.  S.  297,  46  L.  ed.  549,  22  Sup.  Ct.  455. 

21  Richmond  Ry.  &  Electric  Co.  v.  Brown,  97  Va.  26,  1  Va.  S.  C.  Rep.  213, 
32  S.  E.  775. 

22  Golden  Star  Lodge  No.  1  v.  Watterson,  158  Mich.  696. 

23  Duryee  v.  United  States  Credit  System  Co.,  55  N.  J.  Eq.  311,  312,  313, 
37  Atl.  155.  The  court,  per  Emery,  V.  C,  said:  "But  this  statutory  lien 
for  taxes  is  strictly  legal  rather  than  equitable  in  its  nature,  and  if  there  be 
no  other  method  expressly  provided  of  enforcing  the  lien  by  legal  process, 
it  is  not  at  all  clear  that  the  Supreme  Court  cannot  enforce  the  appropria- 
tion of  the  property  subject  to  the  lien,  either  by  mandamus  or  by  the  is- 
suing of  process  of  execution  for  sale  to  pay  the  lien,  analogous  to  the  process 
of  levari  facias  for  this  purpose,  out  of  the  exchequer  (2  Tidd,  Pr.  1042) ;  or 

576 


ACTIONS    AT   LAW    CONTINUED — MANDAMUS  §  348 

Mandamus  will  lie  from  the  Federal  Supreme  Court  to  compel 
the  Circuit  Court  to  remand  a  case  to  the  State  Court  where  it  is 
apparent  from  the  record  that  the  Circuit  Court  has  no  jurisdic- 
tion whatever,  and  the  writ  will  lie  even  though  the  party  ag- 
grieved may  also  be  entitled  to  appeal  or  writ  of  error;  and 
while  mandamus  never  lies  where  the  party  praying  therefor 
has  another  adequate  remedy,  and  appeal  or  writ  of  error  at  the 
end  of  a  litigation,  which  must  go  for  nought,  is  not  an  adequate 
remedy  for  a  plaintiff  whose  case  has  been  wrongfully  removed 
from  a  State  Court  to  the  Circuit  Court,  and  held  there  against 
his  protest.^"*  So  mandamus  may  be  granted  where  an  action  of 
damages  for  breach  of  a  contract  would  be  an  inadequate 
remedy  .^^ 

The  writ  will  also  lie  to  compel  the  observance  of  a  regulation 
made  by  the  railroad  commissioners  under  the  powers  con- 
ferred by  the  Florida  Constitution,^^  requiring  a  terminal  com- 
l)any  to  admit  a  railroad  company  to  the  privileges  and  benefits 
of  its  common  passenger  station  or  terminal,  notwithstanding 
an  action  for  damages  or  proceedings  to  enforce  the  penalty 
provided  by  the  statute  for  failure  to  comply  with  the  regula- 
tion might  be  maintained,  as  such  remedies  are  inadequate  and 
neither  of  them  is  adapted  to  secure  the  performance  of  the  duty 
to  the  public  imposed  by  such  regulation.'^  But  mandamus  is 
not  a  proper  remedy  for  the  collection  of  the  amount  of  a  bond , 
there  being  an  adequate  remedy  at  law  in  which  defendant  can 
properly  make  defense.^*  Nor  does  the  writ  lie  to  compel  an 
irrigation  company  to  deliver  water  to  a  landowner  pursuant 
to  a  private  contract  for  water  to  irrigate  the  plaintiff's  lands, 

perhaps  the  lien  might  be  enforced  by  scire  facias,  the  assessment  of  taxes 
being  in  the  nature  of  a  record  or  judgment."     Id.  314. 

24  Winn,  In  re,  218  U.  S.  45S,  53  L.  ed.  873,  29  Sup.  Ct.  515.  The  peti- 
tioner in  this  case  for  mandamus,  as  assignee  of  the  right  of  action  of  the 
shipper,  brought  in  the  State  Court  an  action  against  an  express  company 
for  the  neghgent  transportation  of  a  boar  whereby  the  animal  was  killed. 

25  Baltimore  University  v.  Colton,  98  Md.  623,  57  Atl.  14,  64  L.  R.  A.  108. 

26  Chap.  4700,  Laws,  1899. 

27  State  V.  Jacksonville  Terminal  Co.,  41  Fla.  377,  27  So.  225. 

28  Barber  Asphalt  Paving  Co.  v.  Village  of  Highland  Park,  156  Mich.  178, 
16  Det.  L.  N.  76,  120  N.  W.  621. 

37  577 


§  349  ACTIONS    AT    LAW    CONTINUED — MANDAMUS 

since  there  is  an  adequate  remedy  at  law  in  an  action  for  dam- 
ages.^" 

§  349.  Statutory  Remedies— When  and  When  Not  Ex- 
clusive of  Mandamus. 

A  litigant  will  not  be  permitted  to  invoke  the  extraordinary 
remedy  of  mandamus  where  an  express  statute  affords  him  an 
adequate  remedy  for  the  redress  of  the  grievance  of  which  he 
complains.'''"  But  the  remedy  provided  by  statute  for  the  en- 
forcement of  orders  of  the  railroad  commissioners  by  action  of 
mandamus  is  not  exclusive.'''^ 

29  state  ex  rel.  Krutz  v.  Washington  Irrigation  Co.,  41  Wash.  283,  111  Am. 
St.  Rep.  1019,  83  Pac.  308.  The  court,  per  Hadley,  J.,  said:  "In  support  of 
her  contention  that  mandamus  is  the  proper  remedy  here,  she  cites  Price  v. 
Riverside  Land  &  Irr.  C"o.,  56  Cal.  431,  and  McCrary  v.  Beaudry,  67  Cal. 
120,  7  Pac.  264.  An  examination  of  those  cases,  however,  discloses  that  each 
was  based  squarely  upon  the  theory  that  there  was  a  refusal  to  discharge 
a  public  duty.  It  does  not  appear  that  a  private  contract  between  the  par- 
ties existed  in  either  case.  Our  statute  provides  that  the  writ  of  mandate 
will  issue  'where  there  is  not  a  plain,  speedy,  and  adequate  remedy  in  the 
ordinary  course  of  law.'  Bal.  Code,  §  5756.  This  is  the  general  rule,  and  the 
courts  hold  that  mandamus  is  a  remedy  to  compel  the  performance  of  a 
duty  required  by  law  where  the  party  seeking  relief  has  no  other  adequate 
remedy,  and  where  the  duty  sought  to  be  enforced  is  clear  and  indisputable. 
Board  of  Com'rs  v.  Aspinwall,  24  How.  376,  16  L.  ed.  184;  Bayard  v.  United 
States  ex  rel.  White,  127  U.  S.  246,  8  Sup.  Ct.  1223,  32  L.  ed.  116;  United 
States  ex  rel.  Redfield  v.  Windom,  137  U.  S.  636,  11  Sup.  Ct.  197,  34  L.  ed. 
811;  Territory  ex  rel.  Crosby  v.  Crum,  13  Okl.  9,  73  Pac.  297;  State  v.  Pater- 
son,  etc.,  R.  Co.,  43  N.  J.  L.  505.  In  Florida,  etc.,  R.  Co.  v.  State  ex  rel. 
Tavares,  31  Fla.  482,  13  So.  103,  34  Am.  St.  Rep.  30,  20  L.  R.  A.  419,  it  was 
said  that  mandamus  will  not  he  to  enforce  the  performance  of  private  con- 
tracts; see  also  State  ex  rel.  Payser  v.  Trustee  of  Salem  Church,  114  Ind. 
389,  16  N.  E.  808;  Parrott  v.  Bridgeport,  44  Conn.  180,  26  Am.  St.  Rep.  439; 
Merrill,  Mandamus,  §  16;  High,  Extr.  Legal  Rerns.  (.3d  ed.),  §  25.  We 
think  appellant  has  an  adequate  remedy  upon  her  contract,  and  that  man- 
damus does  not  lie." 

30  Nebraska  Telephone  Co.  v.  State  ex  rel.  Yeiser,  55  Neb.  627,  45  L.  R. 
A.  113,  76  N.  W.  171. 

31  State  v.  Mason  City  &  Fort  Dodge  Ry.  Co.,  85  Iowa,  516,  52  N.  W.  490. 
The  court,  per  Granger,  J.,  said:  "We  are  further  cited  to  the  constitutional 
provision  that  '  the  district  court  shall  be  a  court  of  law  and  equity,  which 
shall  be  distinct  and  separate  jurisdictions,  and  shall  have  jurisdiction  in 
civil  and  criminal  matters  arising  in  their  respective  districts  in  such  manner 
as  shall  be  prescribed  by  law.'  It  is  claimed  that  the  remedy  in  such  a  case 
is  by  mandamus,  under  the  decisions  of  this  court  which  is  said  to  be  a  law 

578 


ACTIONS    AT    LAW    COXTINIJED— MANDAMUS  §  349 

A  city  charter  gave  its  common  council  supervision  over  all 
bridges  crossing  a  railroad  in  said  city,  with  autliority  to  order 
the  building  and  repairing  of  such  bridges  in  such  manner  and 
within  such  time  as  in  its  judgment  public  convenience  might 
require;  and  provided  that  if  any  railroad  should  neglect  to 
obey  such  order  the  city  might  do  tlie  work  and  recover  the 
expense  thereof  from  the  delinquent  railroad  company.  It  was 
held  that  this  remedy  was  not  exclusive,  and  that  mandamus 
by  the  State  was  an  appropriate  means  of  enforcing  an  order 
of  the  common  council  directing  the  defendant  to  build  a 
bridge,  where  such  order  had  been  appealed  from  by  the  latter 
and  affirmed  by  a  judge  of  the  Superior  Court.^^ 

In  California  it  does  not  rest  in  the  discretion  of  the  trial 
court  or  judge  to  refuse  a  commission  to  take  depositions  of 
witnesses  in  the  cases  defined  by  the  Code,  and  although  the 
order  denying  the  application  is  appealable,  that  does  not  con- 
stitute a  sufficient  reason  for  holding  that  remedy  exclusive, 
especially  where  it  would  be  entirely  inadequate;  so  mandamus 
would  be  the  only  remedy  for  the  refusal  of  a  commission  in  a 
proper  case  before  judgment,  and  pending  an  appeal  from  the 
judgment.  This  applies  to  a  case  where  the  alleged  negligence 
of  a  gas  company  has  caused  an  explosion  of  gas,  and  it  is  sued 

proceeding,  and  that,  the  law  having  prescribed  such  a  proceeding,  it  is 
exclusive.  It  was  held  in  Boggs  v.  Railway  Co.,  54  Iowa,  435,  6  N.  W.  Rep. 
744,  that  mandamus  was  a  proper  remedy  to  enforce  such  right,  and  other 
cases  have  been  prosecuted  by  such  a  proceeding;  but  it  is  not  held  that  such 
a  remedy  is  exclusive.  It  should  not  be  claimed  that  but  a  single  remedy 
can  be  available  to  a  party.  The  doctrine  of  the  'election  of  remedies' 
is  old  and  familiar.  It  may  further  be  said  that  the  statute  giving  the  courts 
jurisdiction  to  enforce  orders  of  the  commissioners  was  enacted  after  the 
case  of  Boggs  v.  Railway  Co.  was  decided.  It  has  not  been  held  that  an 
action  to  enforce  the  orders  of  the  commissioners  must  be  by  proceedings  by 
mandamus,  nor  by  ordinary  proceedings.  It  is  provided  by  the  act  giving 
the  courts  jurisdiction  in  such  cases  that  they  shall  be  'by  equitable  actions 
in  the  name  of  the  State.'  The  law  thus  creates  a  new  action,  and  defines 
the  jurisdiction  of  the  court  having  cognizance  of  it.  If,  indeed,  there  was 
error  as  to  the  kind  of  proceeding,  it  was  waived  by  a  failure  to  move  for  its 
correction  'at  the  time  and  in  the  manner  prescribed.    Code,  §  2519.'  " 

32  State  V.  New  York,  New  Haven  &  Hartford  Ry.  Co.,  71  Conn.  43,  40 
Atl.  925. 

579 


§  350  ACTIONS    AT   LAW    CONTINUED— MANDAMUS 

to  recover  damages  claimed  to  have  been  caused  thereby  and 
the  company  seeks  to  obtain  a  commission  to  take  the  deposi- 
tion of  a  witness  to  perpetuate  his  testimony,  such  witness 
being  the  only  one  on  the  material  point  of  the  cause  of  the 
explosion  and  being  also  at  the  time  under  sentence  of  death 
expecting  shortly  to  be  executed,  although  his  sentence  was 
commuted.^^ 

Where,  under  a  State  Constitution:  ^  "The  legislature  is  in- 
vested with  full  power  to  pass  laws  for  the  correction  of  abuses 
and  to  prevent  unjust  discrimination  and  excessive  charges 
by  persons  and  corporations  engaged  as  common  carriers  in 
transporting  persons  and  property,  or  performing  other  serv- 
ices of  a  public  nature;  and  shall  provide  for  enforcing  such 
laws  by  adequate  penalties  or  forfeitures; "  said  last  clause^: 
"and  shall  provide  for  enforcing  such  laws  by  adequate  penal- 
ties and  forfeitures,"  does  not  by  implication  forbid  the  use  of 
mandamus  and  other  remedies  for  enforcing  duties  imposed  by 
laws  passed  to  accomplish  the  purposes  specified  in  the  first 
clause  of  the  section.  The  clause  quoted  is  a  command  to  the 
legislature,  leaving  it  no  discretion  upon  that  subject,  but  being 
silent  as  to  other  remedies  for  enforcing  duties  growing  out  of 
laws  passed  to  accomplish  the  purposes  specified  in  the  first 
clause  of  the  section,  it  rests  in  the  legislative  discretion  to  pro- 
vide such  as  it  may  see  fit,  and  the  courts  may  apply  such  of  the 
ordinary  remedies  as  may  be  applicable.^^ 

§  350.  When  Mandamus  Is  the  Proper  Remedy  Although 
There  Is  Another  Remedy — Action  for  Damage— Equity. 

Mandamus  will  lie  where  an  action  for  damages  would  be  in- 
adequate; and  the  existence  of  an  equitable  remedy  is  no  bar 
to  the  issuance  of  the  writ,  although  it  may  influence  the  court 
in  the  exercise  of  its  discretion .^^    So  mandamus  and  not  a  bill 

33  San  Francisco  Gas  &  Electric  Co.  v.  Superior  Covirt,  155  Cal.  30,  99 
Pac.  359. 

34  Const.  Fla.,  1885,  Art.  XVI,  §  .30. 

35  State  V.  .Jacksonville  Terminal  Co.,  41  Fla.  377,  27  So.  225. 

36  People  ex  rel.  Frost  v.  New  York  Central*  Hudson  River  Rd.  Co.,  168 
N.  Y.  187,  61  N.  E.  172,  rev'g  61  A  pp.  Div.  494,  a  case  relating  to  the  main- 

580 


ACTIONS    AT   LAW    CONTINUED — MANDAMUS  §  351 

in  equity  is  the  proper  remedy  to  test  the  vaHdity  of  the  title 
of  usurping  officers  of  a  rehgious  corporation.^^  And  the  fact 
that  a  petitioner  for  such  a  writ  has  a  remedy  in  equity  by  bill 
for  specific  performance  is  not  a  reason  for  refusing  the  writ.^^ 
So  mandamus  and  not  a  bill  in  equity  is  the  proper  remedy  to 
obtain  the  restoration  to  membership  in  a  religious  society  and 
to  test  the  validity  of  the  expulsion  of  said  member.^"  The 
remedy  is  also  by  mandamus  and  not  by  mandatory  injunction 
where  an  executive  officer  refuses  to  perform  a  ])lain  duty  un- 
mixed with  discretion,  and  this  applies  in  a  case  of  refusal  of 
the  proper  officer  to  receive  a  fee  and  issue  a  license  to  a  com- 
pany to  establish  an  agency  for  selHng  its  products.  Such  writ 
of  mandamus  is  issued  after  a  trial  by  the  court  and  never  in 
vacation."*"  And  where  there  is  a  question  as  to  the  election 
and  acceptance  of  membership  in  a  religious  corporation  manda- 
mus and  not  a  bill  in  equity  is  the  proper  remedy.'*^  Again,  the 
proper  remedy  to  compel  compliance  with  a  statutory  require- 
ment to  post  the  by-laws  of  a  corporation  in  its  principal  place 
of  business,  is  by  mandamus  and  not  by  an  injunction  suit."^ 

§  351.  When  Remedy  Is  by  Action  at  Law  and  Not  by 
Mandamus. 

Mandamus  is  not  a  proper  remedy  to  compel  the  issuance  of 
warrants  to  pay  for  lighting  a  city's  streets,  since  an  action  at 
law  should  be  brought  to  recover  the  same  where  the  city 
claims  an  offset  or  counterclaim  for  breach  of  contract.^^  So 
redress  for  injuries  received  from  private  corporations  organ- 

tenance  of  culverts  in  a  railway  embankment  and  the  issue  of  necessity  of 
opening  additional  culverts  on  a  motion  for  peremptory  mandamus  to  re- 
store certain  culverts. 

37  Saltman  v.  Nesson,  201  Mass.  5.34,  88  N.  E.  3. 

38  Baltimore  University  v.  Colton,  98  Md.  623,  57  Atl.  14,  64  L.  R.  A.  108. 

39  Saltman  v.  Nesson,  201  Mass.  534,  88  N.  E.  3. 

«<  Hager,  Auditor,  v.  New  South  Brewing  Co.,  28  Ky.  L.  Rep.  895,  90 
S.  W.  608. 

«  Saltman  v.  Nesson,  201  Mass.  534,  88  N.  E.  3. 

42  Boardman  v.  Marshalltown  Grocery  Co.,  105  Iowa,  445,  75  N.  W.  343. 

«  Kensington  Elec.  Co.  v.  Philadelphia,  187  Pa.  St.  446,  43  Wkly.  N.  C. 
186,  41  Atl.  509. 

581 


§§  352,  353    ACTIONS  at  law  continued— mandamus 

ized  for  joint  or  partnership  undertakings,  should  be  sought  at 
common  hiw,  not  through  mandamus  proceedings.'*^ 

§  352.  "When  Proper  Remedy  Is  Quo  Warranto  and  Not 
Mandamus. 

Mandamus  will  not  lie  to  compel  a  foreign  corporation  to  per- 
form an  act  which  is  a  prerequisite  to  its  right  to  do  business  in 
the  State.  The  proper  remedy  is  quo  loarrarito,  or  the  imposi- 
tion of  the  penalty  for  doing  business  without  complying  with 

the  law.'*^ 

§  353.  When  Remedy  to  Forfeit  Franchise,  and  Not 
Mandamus,  Is  Proper. 

In  an  action  by  the  State  for  a  writ  of  mandamus  to  compel 
a  street  railway  company  to  resume  operation  of  a  portion  of 
its  line,  which  it  had  abandoned,  it  was  held  that  no  such  obli- 
gation as  could  be  enforced  by  mandamus  by  the  State  was 
imposed  by  the  acceptance  and  construction  of  its  line,  under  an 
ordinance  of  a  city  giving  such  company  permission  to  con- 
struct and  operate  said  lines;  but  that  the  rerriedy  would  be 
to  forfeit  the  franchise  to  operate  a  branch  in  controversy  where 
the  operation  of  a  part  thereof  was  abandoned.''^ 

■"  Lamphere  v.  Grand  Lodge  Ancient  Order  of  U.  W.,  47  Mich.  429. 

45  Secretary  of  State  v.  National  Salt  Co.,  126  Mich.  644,  8  Det.  L.  N.  168, 
86  N.  W.  124. 

46  San  Antonio  St.  Ry.  Co.  v.  State,  Elmendorf,  90  Tex.  520,  .39  S.  W.  926, 
35  L.  R.  A.  662,  6  Am.  &  Eng.  R.  Cas.  (N.  S.)  658,  rev'g  38  S.  W.  54.  The 
court,  per  Gaines,  C.  J.,  said:  "It  is  a  well-settled  doctrine  that  a  corpora- 
tion may  be  compelled  by  the  writ  of  mandamus  to  perform  a  duty  imposed 
by  statute.  The  duty  need  not  be  express;  it  may  be  implied.  Clearly, 
when  it  appears  by  fair  implication  from  the  terms  of  its  charter,  it  is  as 
imperative  as  if  the  obligation  were  expressed.  But  as  to  corporations 
quasi  public  in  character — such,  for  example,  as  those  chartered  for  the 
carriage  of  passengers  and  freight — there  are  decisions  which  hold  that 
they  owe  certain  duties  to  the  public  which  they  may  be  compelled  to  per- 
form, although  not  enjoined  by  their  charters,  either  in  express  terms  or 
by  specific  impHcation.  But  we  have  been  unable  to  discover  that  any  well- 
defined  rule  has  been  laid  down  by  the  authorities  by  which  we  may  deter- 
mine in  every  case  what  implied  duties  are  assumed  by  such  a  corporation 
by  the  acceptance  of  its  charter.  It  has  been  held  that  in  the  absence  of 
some  tlirect  statutory  requirement  a  railroad  company  cannot  be  compelled 

582 


ACTIONS    AT   LAW    CONTINUED — MANDAMUS  §  354 

§  354.  When  Remedy  in  Equity  and  Not  by  Mandamus — 
Injunction  — Mandatory  Injunction. 

Mandamus  will  not  be  granted  to  compel  the  secretary  of  a 
private  corporation  to  record  the  transfer  of  certificates  of  stock 

to  establish  and  maintain  a  station  at  a  particular  point  on  its  line,  although 
it  may  be  shown  that  the  convenience  of  the  public  demands  it.  Northern 
Pac.  R.  Co.  V.  Washington  Territory,  142  U.  S.  492,  12  Sup.  Ct.  283;  Peoi-le 
V.  New  York,  L.  E.  &  W.  R.  Co.,  104  N.  Y.  58,  9  N.  E.  856.  A  contrary 
doctrine  seems  to  have  been  acted  upon  in  State  v.  Republican  Val.  R.  Co., 
17  Neb.  647,  24  N.  W.  329,  and  in  People  v.  Chicago  &  A.  R.  Co.,  130  111. 
175,  22  N.  E.  857.  It  is  one  thing  to  hold  that  a  company  which  has  accepted 
a  charter  authorizing  it  to  construct  a  line  of  railroad,  with  power  to  con- 
demn property,  and  has  constructed  and  is  maintaining  its  line,  may  be 
compelled  to  so  operate  its  hne  as  reasonably  to  meet  the  necessities  of  the 
public;  and,  we  think,  it  is  quite  a  different  one  that  a  railroad  company,  by 
the  acceptance  of  its  charter,  which  simply  makes  it  lawful  to  construct 
and  maintain  a  railroad,  assumes  an  obligation  to  construct."  The  court 
then  considered  a  number  of  decisions  upon  this  point  and  continued  as 
follows:  "The  legislature,  in  creating  a  corporation,  has  the  power  to  give 
it  an  option  to  do  or  not  to  do  the  acts  which  it  is  authorized  to  perform. 
On  the  other  hand,  it  may  impose  upon  the  corporation,  as  the  law  of  its 
creation,  the  obligation  to  exercise  to  their  fullest  extent  the  powers  which 
are  granted.  In  either  case  the  proposed  corporators  may  accept  or  not; 
and,  in  the  latter,  if  they  do  accept,  they  may  be  compelled  by  mandamus 
to  perform  the  duties  so  imposed.  But  to  say  that  in  granting  a  charter  to 
do  a  public  service  there  is  no  difference  between  making  it  lawful  to  do  an 
act,  and  imposing  it  as  an  obligation  to  perform  it,  is  to  say  that  by  reason 
of  the  public  interest  involved  language  is  to  have  a  different  construction 
and  effect  from  what  it  would  have  in  statutes  in  general  or  in  private  con- 
tracts. Expressions  may  be  found  in  the  opinions  of  courts  which  coun- 
tenance that  doctrine,  but  we  think  there  it  is  based  upon  an  assumption 
that  cannot  be  maintained  upon  sound  principle.  In  legislating,  the  law- 
making power  undertakes  to  determine  what  is  to  the  interest  of  the  pub- 
lic, and  under  the  limitations  of  the  constitution  it  is  the  sole  judge  of  what 
will  promote  the  pubHc  utility,  and  must  be  presumed  to  be  capable  of  ex- 
pressing its  will  in  intelligible  words.  When,  therefore,  a  corporation, 
whether  quasi  public  or  purely  private,  is  granted  the  privilege  of  doing  an 
act,  and  there  are  in  its  charter  no  express  terms  which  make  it  obligatory 
to  do  the  act,  or  other  words  from  which  by  fair  construction  that  inten- 
tion can  be  gleaned,  we  do  not  see  upon  what  sound  principle  the  duty  can 
be  imposed.  *  *  *  \Vg  are  of  opinion  also  that  the  fact  that  the  road 
has  been  constructed  and  operated,  and  that  a  part  is  now  operated,  makes 
no  difference.  Under  the  grant  of  a  privilege  to  construct  and  maintain,  if 
after  acceptance  it  is  permissive  only  to  construct,  it  is  not  obligatory  to 
maintain.  But  we  do  not  hold  that  the  company  can  against  the  will  of  the 
city,  operate  a  Dart  of  its  lint ,  and  not  the  whole.    A  privilege  to  estabUsh 

583 


§  354  ACTIONS    AT   LAW    CONTINUED — MANDAMUS 

on  tlie  books  of  the  company,  as  e(iuity  has  jurisdiction  to  de- 
cree transfers,  if  an  action  at  law  does  not  afford  an  adequate 
remedy  .^^  And  where,  owing  to  physical  or  other  conditions 
existing  at  a  point  where  a  cross-over  switch  is  located,  the 
annoyance  caused  to  the  adjoining  proprietor  is  peculiar  and 
exceptional;  and  so  injurious  to  the  quiet  enjoyment  of  his 
home,  as  to  constitute  an  invasion  of  his  property  rights,  he 
may  then  be  entitled  to  equitable  relief,  but  not  to  a  writ  of 
mandamus.  Such  private  right  could  not  be  enforced,  how- 
ever, without  establishing  the  absolute  illegality  of  the  struc- 
ture at  the  point  in  question.'**  So  where  a  complaint  in  manda- 
mus charges  that  relator  by  a  written  contract  with  a  natural 
gas  company  permitted  such  company  to  lay  pipes  over  and 
upon  his  lands  in  consideration  of  such  company's  agreement 
to  furnish  the  relator  natural  gas  for  domestic  use,  and  asks 
the  court  to  compel  such  company  "to  cease  taking  up  and  re- 
moving its  pipe-line  on  the  relator's  farm,  and  to  replace  any 
part  of  the  line  taken  up  at  the  commencement  of  this  suit, 
and  to  continue  to  furnish  natural  gas  to  the  relator's  farm 
dwelling  according  to  the  terms  of  a  written  contract  granting 
appellee  a  right  of  way  for  its  pipe-line  across  said  farm,"  such 
complaint  is  not  sufficient,  since  mandamus  is  not  the  proper 
remedy  to  compel  such  company  "to  cease  taking  up  and  re- 
moving its  pipes,"  the  proper  remedy  being  injunction.^** 
Again,  where  a  Code^°  provides  that  a  mandatory  injunction 
may  affirmatively  direct  the  doing  of  the  act  required  to  be  done, 
injunction,  and  not  mandamus,  is  the  proper  remedy  to  compel 
a  telephone  company  to  install  an  instrument  .^^ 

an  entire  line  of  street  railway  may  be  granted  when  the  privilege  of  con- 
structing and  operating  a  part  only  would  not  be,  and  for  a  failure  to  op- 
erate a  part  it  would  seem  that  the  whole  might  be  forfeited." 

47  Clarke  v.  HiU,  1.32  Mich.  434,  9  Det.  L.  N.  671,  9.3  N.  W.  1044. 

48  State  ex  rel.  Howard  v.  Hartford  St.  Ry.  Co.,  76  Conn.  174,  56  Atl.  506. 

49  State  ex  rel.  Thiebaud  v.  Connersville  Natural  Gas  Company,  163  Ind. 
563,  71  N.  E.  483. 

50  Ky.  Civ.  Code  Prac,  §  271. 

51  Williams  v.  Maysville  Telephone  Co.,  119  Ky.  33,  26  Ky.  L.  Rep.  945. 
In  this  case  the  fact  that  defendant  telephone  company  furnished  plaintiff's 
neighbors  in  the  same  square  with  telephones  for  three  dollars  per  quarter, 

584 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS  §  355 

§  355.  Mandamus — Enforcement  of  Private  or  Personal 
Rights — Contractual  Relations. 

As  mandamus  is  a  discretionary  writ  it  will  not  usually  lie 
to  settle  the  controversies  of  private  corporations  where  the 
facts  are  not  important  on  public  grounds,  or  would  not  justif}' 
the  interference  of  the  court  if  corporate  authority  did  not 
exist.^-  Nor  does  this  writ  lie  to  enforce  merely  private  or 
personal  rights,  or  contractual  duties.  Its  proper  function  is  to 
enforce  duties  growing  out  of  public  relations,  or  imposed  by 

without  requiring  them  to  contract  to  keep  the  phones  a  year,  did  not  en- 
title plaintiff  to  compel  defendant  to  furnish  him  a  phone  for  the  same 
price  without  a  yearly  contract,  without  showing  that  the  conditions  were 
the  same.  In  this  case  the  court,  per  Nunn,  J.,  said:  "It  is  conceded  by 
appellee's  counsel  that  appellee  is  a  common  carrier,  a  public  service  cor- 
poration, and,  as  such,  is  subject  to  the  laws  governing  and  controlling  such 
corporations.  It  is  self-evident  that  a  corporation  engaged  in  a  business 
affected  by  a  public  interest  may  prescribe  reasonable  rules  and  charges 
for  conducting  its  business.  And  when  the  charges  are  not  fixed  by  legis- 
lative enactment  (as  in  the  case  at  bar)  the  charges  may  be  fixed  by  the 
corporation,  and  the  only  limitations  are  that  the  charges  must  be  reason- 
able, and  be  the  same  to  all  persons  imder  the  same  or  like  circumstances 
and  conditions.  There  must  not  be,  in  the  service  or  charge,  any  discrimi- 
nation or  partiality.  Tested  by  these  principles,  we  are  of  the  opinion  that 
the  petition  did  not  state  a  cause  for  action.  Especially  it  did  not  author- 
ize the  court  to  grant  a  mandamus  to  compel  appellee  to  place  a  telephone 
in  appellant's  residence.  Mandamus  was  not  the  proper  remedy.  This 
writ  is  defined  by  §  477  of  the  Civil  Code  of  Practice,  as  follows:  'The  writ 
of  mandamus,  as  treated  of  in  this  chapter,  is  an  order  of  a  court  of  compe- 
tent and  original  jurisdiction,  commanding  an  executive  or  ministerial 
officer  to  perform  an  act,  or  omit  to  do  an  act,  the  performance  or  omission 
of  which  is  enjoined  by  law;  and  it  is  granted  on  the  motion  of  the  part}- 
aggrieved,  or  of  the  commonwealth  when  the  public  interest  is  affected.' 
The  agents  and  servants  in  charge  of  appellee's  telephone  business  were  and 
are  not  '  executive  or  ministerial  officers '  in  the  sense  and  meaning  of  this 
section  of  the  Code.  If  appellant's  petition  had  been  otherwise  sufficient 
under  his  prayer  'for  all  proper  and  general  relief,'  the  court  should  have 
granted  him  a  mandatory  injunction,  as  provided  in  §  271,  Civ.  Code  Prac, 
which  provides:  'When  a  mandatory  injunction  shall  be  granted,  the  or- 
der or  judgment  may  affirmatively  direct  the  party  enjoined  to  do  the  act 
or  thing  required  to  be  done.'  This,  however,  is  a  harsh  and  extreme  rem- 
edy, and  should  never  be  resorted  to  or  granted  except  it  be  made  to  appear 
clearly  that  the  party  demanding  the  remedy  has  the  legal  right  to  have 
the  act  done,  and  that  he  has  no  other  adequate  remedy  at  law  to  obtain 
redress." 

»2  Lamphere  v.  Grand  Lodge  Ancient  Order  of  U.  W.,  47  Mich.  429. 

585 


§  355  AC'i'IONS    AT    LAW    CONTINUED — MANDAMUS 

statute,  or  in  some  respect  involving  a  trust  or  official  duty,^^ 
Again,  duties  imposed  on  a  corporation,  not  by  virtue  of  ex- 
press law,  nor  by  the  conditions  of  its  charter,  but  arising 
wholly  out  of  contract  relations,  will  not  be  enforced  by  manda- 
mus, since  the  use  of  such  writ  is  limited  to  the  enforcement  of 
obligations  imposed  by  law.  Where  the  duties  of  a  corporation, 
or  of  its  trustees,  grow  out  of  or  result  from  matters  of  contract, 
writs  of  mandate  will  not  lie  against  the  corporation  or  its 
trustees,  either  in  their  corporate  capacity  or  as  individuals,  to 
compel  the  performance  of  the  contract,  but  the  party  aggrieved 
will  be  left  to  the  ordinary  remedies,  either  at  law  or  in  equity.^'' 
So  the  writ  will  not  lie  to  annul  a  contract  for  public  printing.^""^ 
The  doctrine  that  mandamus  will  not  lie  to  compel  a  private 
corporation  to  perform  its  obligations  resting  solely  on  con- 
tract with  an  individual  has  been  applied  to  the  contract  of  a 
medical  college  to  grant  its  diploma  to  one  completing  the 
course  of  instruction  and  complying  with  certain  conditions.^^ 

53  Richmond  Ry.  &  Electric  Co.  v.  Brown,  97  Va.  26,  1  Va.  S.  C.  Rep. 
213,  32  S.  E.  775. 

54  Poyser  v.  The  Trustees  of  Salem  Church,  114  Ind.  389,  396,  16  N.  E. 
808,  citing  State  ex  rel.  v.  Zanesville,  etc.,  T.  P.  Co.,  16  Ohio  St.  .308;  State 
ex  rel.  v.  Patterson,  etc.,  R.  R.  Co.,  43  N.  J.  L.  505;  State  v.  Republican 
River  Bridge  Co.,  20  Kans.  404;  People  ex  rel.  v.  Dulaney,  96  111.  503;  High 
on  Ex.  Leg.  Rem.,  §  321.  In  the  principal  case  the  trustees  of  a  Methodist 
Church  corporation  solicited  subscriptions  to  a  building  fund.  To  induce 
persons  who  were  not  members  of  the  religious  denomination  represented 
by  them  to  subscribe  to  such  fund,  it  was  stipulated  in  the  subscription 
papers,  with  the  consent  of  the  corporation,  that  the  house  to  be  erected 
should  be  free  to  all  orthodox  denominations  when  not  occupied  by  the 
Methodists.  Relying  upon  this  stipulation,  members  of  other  denomina- 
tions subscribed  and  paid  various  sums  of  money.  Some  time  after  the 
completion  of  the  building,  the  Methodist  corporation  refused  to  permit 
other  denominations  to  use  the  house.  Complaint  was  by  subscribers  to  the 
building  fund,  asking  that  a  writ  of  mandate  may  issue  to  compel  the 
t  rustees  of  the  Methodist  Church  to  designate  a  time  when  another  denomi- 
nation may  occupy  the  building.  It  was  held,  that  the  duty,  the  perform- 
ance of  which  is  sought  to  be  compelled,  is  not  one  "resulting  from  an 
office,  trust,  or  station,"  and  that,  under  §  1168,  R.  St.  1881,  mandate  would 
not  lie. 

55  Capital  Printing  Co.  v.  Hoey,  124  N.  C.  767,  33  S.  E.  160. 

58  State  ex  rel.  Burg  v.  Milwaukee  Medical  College,  128  Wis.  7,  116  Am. 
St.  Rep.  21,  106  N.  W.  116. 

586 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS  §  355 

So  in  a  late  Michigan  case  mandamus  was  brought  to  compel 
a  college  to  receive  relators  as  students;  an  order  was  made 
granting  the  writ  and  certiorari  was  brought  by  the  respondent 
and  it  was  held  that  mandamus  would  not  be  granted  to  com- 
pel a  private  corporation  to  perform  its  obligations  resting  in 
contract  with  an  individual .^^ 

But  in  a  Maryland  case  it  is  decided  that  mandamus  lies  to 
compel  a  university  which  has  a  law  school  to  reinstate  a  stu- 
dent which  it  has  wrongfully  dismissed  from  said  school,  with- 
out notice  and  in  violation  of  the  contract  between  the  parties.^** 

Again,  where  a  corporation  undertakes  to  operate  a  railroad 
franchise  it  assumes  all  the  duties  and  obligations  which  spring 
by  law  from  the  character  of  its  business  and  from  the  customs 

57  Booker  v.  Grand  Rapids  Medical  College,  156  Mich.  95,  16  Det.  L.  N. 
56,  120  N.  W.  589.  The  court,  per  Ostrander,  J.,  said:  "There  is  no  good 
reason  why  the  law  should  not  recognize,  as  growing  out  of  these  relations, 
a  right  of  relators  resting  in  contract  to  be  continued  as  students  by  the 
respondent.  It  is  the  general  rule  that  mandamus  does  not  Ue  to  compel 
a  private  corporation  to  perform  its  obligations  resting  in  contract  with 
an  individual.  We  are  referred  to  no  decision  of  this  court  recognizing  any 
other  rule.  A  case  in  which  the  rule  was  enforced  by  denying  the  writ  to 
one  who  had  completed  a  course  in  an  incorporated  college  and  had  been 
refused  a  diploma  is  State  ex  rel.  Burg  v.  Milwaukee  Medical  College,  12S 
Wis.  7,  106  N.  W.  116,  116  Am.  St.  Rep.  21.  In  the  opinion  in  that  case 
and  in  the  motion  for  a  rehearing  many  authorities  are  cited,  among  them 
Clarke  v.  Hill,  132  Mich.  434,  93  N.  W.  1044.  The  writ  was  held  to  be  the 
only  adequate  remedy  in  Baltimore  University  v.  Colton,  98  Md.  623,  57 
Atl.  14,  64  L.  R.  A.  108,  and  in  People  ex  rel.  Cecil  v.  Bellevue  Hospital 
Medical  College,  60  Ilun,  107,  14  N.  Y.  Supp.  490;  Id.,  128  N.  Y.  621,  28 
N.  E,  253.  It  cannot  be  said  that  relators  are  members  of  an  incorporated 
society,  and  have  been  wrongfully  deprived  of  the  privileges  of  members, 
which  is  the  ground  of  decision  in  Baltimore  University  v.  Colton,  supra. 
It  may  be  said,  perhaps,  that  the  New  York  decision  is  rested  upon  the 
notion  that  relator  had  acquired  a  status,  evidence  of  which,  in  the  form  of 
a  degree,  was  arbitrarily  refused.  The  Court  of  Appeals  delivered  no  opin- 
ion. If  mere  expedition  in  securing  some  remedy  is  to  be  made  the  test,  it 
may  be  said  there  is  no  other  adequate  remedy  for  relators.  And,  if  enforce- 
ment of  the  obligations  of  private  corporations  by  mandamus  is  to  be  en- 
tered upon  by  the  courts,  we  know  of  no  rule  by  which  it  can  be  determined 
in  what  cases  the  writ  should  be  refused.  The  apparent  hardship  of  a  par- 
ticular situation  is  not  a  good  reason  for  departing  from  the  rule." 

58  Baltimore  University  v.  Colton,  98  Md.  623,  57  Atl.  14,  64  L.  R.  A. 
108. 

587 


§  355  ACTIONS    AT   LAW    CONTINUED — MANDAMUS 

incidental  to  it.  It  tenders  a  continuing  offer  to  the  general 
public  that  it  will  perform  these  duties  for  the  benefit  of  each 
and  every  one  of  them  when  demanded  at  its  hands.  When  any 
member  of  the  public  makes  a  demand  upon  it  under  such 
general  offer  there  immediately  results  a  civil  obligation  on  the 
part  of  the  company  in  favor  of  the  party  making  the  demand, 
enforceable  in  the  name  of  such  party  through  the  usual 
remedies  by  which  contracts  are  enforced.  The  party  seeking 
the  enforcement  of  the  obligation  by  mandamus  cannot  be 
driven  by  the  corporation  to  an  action  for  damages,  nor  can 
it  by  the  payment  of  money,  leave  unperformed  its  specific 
affirmative  legal  duty.^^  Where  a  Code  ^^  provides  that  manda- 
mus may  issue  to  compel  the  performance  of  an  act  which  the 
law  specially  enjoins  as  a  duty  resulting  from  an  office,  trust  oi' 
station;  and  also®^  that  the  writ  must  be  issued  in  all  cases 
where  there  is  not  a  plain,  speedy  and  adequate  remedy  at  law, 
it  is  held  that  mandamus  is  the  proper  remedy  to  compel  a  city 
to  levy  a  special  tax  to  pay  ascertained  water  rentals  due  under 
a  valid  contract  for  a  water  supply,  which  the  city  had  repudi- 
ated. And  where  a  city  repudiates  a  contract  with  a  water 
company  providing  for  payment  of  hydrant  rentals  semi- 
annually, but  still  uses  the  water  furnished  by  the  company, 
and  insists  that  the  supply  be  continued  regardless  of  the  con- 
tract, a  command  in  a  writ  of  mandamus,  that  the  city  levy 
sufficient  taxes  to  pay,  not  only  the  six  months'  water  rentals 
already  due,  but  also  those  that  will  become  due  for  the  re- 
maining six  months  of  the  year,  is  proper .^^ 

In  a  Louisiana  case  the  relator  applied  for  a  writ  of  manda- 
mus to  compel  the  city  engineer  to  furnish  its  lines  and  levels 
for  the  construction  of  its  railroad  through  neutral  ground  of  a 
certain  named  avenue  between  certain  named  streets.  The 
relator  claimed  that  it  owned  a  railroad  franchise  and  that  sub- 

59  Cumberland  Teleph.  &  Teleg.  Co.  v.  Morgan's  L.  &  T.  Ry,  Co.,  51  La. 
Ann.  29,  72  Am.  St.  Rep.  442,  24  So.  803. 

80  Mont.  Code  Civ.  Proc,  1895,  §  1961. 

«i  Id.,  §  1962. 

62  Syllabus  in  State  ex  rel.  Great  Falls  Water  Works  v.  Great  Falls  City 
Council,  19  Mont.  518,  49  Pac.  15. 

588 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS  §  3~)iJ 

sequently  the  city  council  passed  an  ordinance,  under  which 
certain  changes  were  made  in  the  matter  of  the  hne  of  the  rail- 
road; the  relator  claimed  that  the  whole  road  had  been  com- 
pleted except  that  portion  to  which  the  writ  of  mandamus 
related,  and  relator  was  anxious  to  connect  its  line  so  as  to 
operate  from  terminus  to  terminus.  The  respondent's  answer 
to  the  preliminary  order  issued  on  application  for  the  manda- 
mus, was  that  it  was  not  his  duty  to  deliver  to  relator  lines  and 
levels,  because  the  amending  ordinance  under  which  the  re- 
lator claimed  a  franchise  had  been  repealed  by  the  city  council, 
and  that  if  it  had  not  been  repealed  relator's  allegations  were 
vague  and  indefinite  and  did  not  indicate  upon  what  neutral 
grounds  to  estabhsh  the  lines  and  levels  and  did  not  designate 
upon  what  part  of  the  neutral  ground  the  tracks  were  to  be 
laid;  and  also,  that  the  relator  had  no  contract  with  the  city 
and  held  no  franchise  from  it,  and  that  the  alleged  contract  was 
void.  It  was  not  disputed,  as  a  fact,  that  the  relator  had  con- 
structed its  line  of  road  as  alleged  in  its  petition.  It  was  also  a 
fact  that  relator  had  accepted  the  terms  and  conditions  of  the 
ordinance  under  which  it  had  accepted  its  franchise;  that 
ordinance  was,  however,  repealed.  It  was  held  that  there  was 
an  existing  contract  between  the  city  and  the  corporation  re- 
lator; that  it  was  no  longer  within  the  power  of  the  city,  after 
compliance  by  relator  with  its  terms,  to  treat  said  contract  as  a 
nullity  by  repealing  the  prior  ordinance,  as  by  its  execution  the 
contract  acquired  a  validity  to  which  effect  should  be  given 
until  it  should  be  regularly  annulled  contradictorily  with  the 
party  in  interest;  that  it  was  incumbent  upon  the  surveyor, 
under  the  terms  of  the  contract  between  the  relator  and  the 
city,  to  furnish  the  lines  and  levels  of  the  contemplated  road; 
that  he  could  not  in  law  decHne  to  act  before  he  was  stopped 
by  the  legal  action  of  the  constituted  authorities;  and  that 
mandamus  would  lie  to  compel  the  performance  by  an  officer 
of  duties  purely  ministerial.^'"' 

63  State  ex  rel.  Crescent  City  Rd.  Co.  v.  City  Engineer,  49  La.  Ann.  G76, 
21  So.  724,  McEnery,  J.,  dissenting.  See  also  on  last  point  State  ex  rel. 
Baltimore,  Canton  &  P.  B.  Ry.  Co.  v.  Latrobe,  81  Md.  222,  233,  31  Atl.  788. 

589 


§  356  ACTIONS    AT   LAW    CONTINUED — MANDAMUS 

§  356.  When  Writ  Lies  to  Enforce  Discretionary  or 
Ministerial  Duties. 

When  the  duty  imposed  is  strictly  a  ministerial  one,  is  abso- 
lute and  imperative,  and  in  its  discharge  requires  the  exercise 
of  neither  official  discretion  nor  judgment,  mandamus  will  He 
to  enforce  its  performance.^^  And  such  a  writ  may  issue  to 
compel  public  officers  to  exercise  discretion.^^  But  though  the 
discretion  of  a  Secretary  of  State  may  extend  to  matters  of 
form,  still  it  does  not  extend  to  a  question  of  merits  in  an  ap- 
plication to  him  to  file  and  record  articles  of  incorporation 
showing  compliance  with  the  laws,  the  proper  fees  being  ten- 
dered.^^  Where  a  franchise  was  granted  to  a  telephone  com- 
pany to  extend  its  lines  upon  the  condition  that  the  location  of 
the  poles  should  be  designated  by  the  commissioner  of  public 
works,  it  was  decided  that  though  the  commissioner  refused 
and  his  refusal  was  purely  arbitrary  and  unjustified,  the  com- 
pany was  not  justified  in  taking  matters  into  its  own  hands, 
even  though  conforming  to  the  recognized  method  of  erecting 
such  poles,  but  that  the  legal  course  was  open  to  the  appellant 
to  compel  the  commissioner's  action  and  that  mandamus  would 
lie  to  compel  the  commissioner  to  act,  as  that  was  the  proper 
remedy  to  compel  the  exercise  of  official  discretion  or  judg- 
ment.^'^    If  county  commissioners  have  improjxM-ly  assessed  for 

M  State  ex  rel.  Baltimore,  Canton  &  P.  B.  Ry.  Co.  v.  Latrobe,  81  Md.  222, 
31  Atl.  788. 

Examine  the  following  cases: 

Alabama:  Ramagnano  v.  Crook,  85  Ala.  226,  3  So.  845. 

Kentucky:  Shine  v.  Kentucky  C.  R.  Co.,  85  Ky.  177,  3  S.  W.  18. 

Louisiana:  State  ex  rel.  Johnson  v.  Rightor,  40  La.  Ann.  852,  5  So.  416. 

Missouri:  State  ex  rel.  Hathaway  v.  Board  of  Health,  103  Mo.  22,  15 
S.  W.  322;  State  v.  Cramer,  96  Mo.  75,  8  S.  W.  788. 

Nebraska:  State  ex  rel.  Hershisher  v.  Kincaid,  23  Neb.  641,  37  N.  W.  612. 

Pennsylvania:  Commonwealth  v.  McLaughlin,  120  Pa.  St.  518,  21  W.  N.  C. 
478,  14  Atl.  377. 

West  Virginia:  Satterlee  v.  Strider,  31  W.  Va.  781,  8  S.  E.  552. 

65  Croasman  v.  Kincaid,  31  Ore.  445,  49  Pac.  764. 

68  state  ex  rel.  Steuben ville  Gas  &  Elec.  Co.  v.  Taylor,  55  Ohio  St.  61,  35 
Ohio  L.  J.  384,  44  N.  E.  513,  4  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  470. 

87  St.  Paul,  City  of,  v.  Freedy,  86  Minn.  350,  90  N.  W.  781,  8  Am.  Elec. 
Cas.  29,  citing  State  v.  Teal,  72  Minn.  37,  74  N.  W.  1024. 

590 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS      §§  357,  358 

taxation  machinery  as  being  part  of  t\ui  ivnl  estate  of  a  corpo- 
ration, a  writ  of  mandamus  is  the  proper  remedy  to  cause  them 
to  strike  from  their  books  the  illegal  assessment.^^ 

§  357.  When  Writ  Does  Not  Lie  to  Enforce  Discretionary 
Duties. 

Mandamus  will  not  lie  to  compel  the  exercise  of  discretion  in 
a  particular  manner.^*'  Whenever  the  performance  of  a  duty 
is  dependent  upon  the  exercise  of  judgment  and  discretion  on 
the  part  of  the  person  to  whom  the  pei-formance  of  that  duty  is 
exclusively  assigned,  that  judgment  will  not  be  interfered  with 
or  controlled  by  mandamus.™  Mandamus  cannot  be  sustained 
against  a  street  commissioner  to  compel  him  to  issue  a  permit 
to  excavate  the  city  streets  for  a  subway,  where  the  relator 
corporation  has  no  vested  right  so  to  place  its  wiresJ^  Nor  does 
such  a  writ  lie  to  compel  a  board  of  aldermen  to  designate  lo- 
cations for  electric  light  fixtures  in  streets  where  such  board 
has  in  such  matters  discretionary  powers  under  the  statute.'^' 

§  358.  When  Mandamus  Lies  and  Does  Not  Lie  to  Compel 

«8  Anne  Arundel  County  (County  Commissioners  of  Anne  Arundel  County) 
V.  Baltimore  Sugar  Ref.  Co.,  <J9  Md.  481,  58  Atl.  211.  The  Code,  Art.  81, 
§  1S4,  pro\'iding  for  the  filing  of  a  petition  to  correct  an  improper  assessment 
was  held  not  applicable  as  it  afforded  no  remedy  which  would  forbid  re- 
sort to  mandamus;  and,  besides,  that  section  was  simply  a  part  of  the  ma- 
chinery of  an  assessment  under  the  act  of  1896,  and  having  been  completel}' 
executed  was  without  effect. 

69  Shipman  v.  State  Live  Stock  Sanitary  Commission,  115  Mich.  488,  4 
Det.  L.  N.  954,  73  N.  W.  817. 

™  State  ex  rel.  Baltimore,  Canton  &  P.  B.  Ry.  Co.  v.  Latrobe,  81  Md. 
222,  23.3,  31  Atl.  788.  See  also  State  ex  rel.  Crescent  City  Rd.  Co.  v.  City 
Engineer,  49  La.  Ann.  676,  21  So.  724. 

71  State  ex  rel.  Laclede  Gas  Light  Co.  v.  Murphy,  130  Mo.  10,  31  S.  W. 
594,  5  Am.  Elec.  Cas.  71,  s.  c,  170  U.  S.  78,  18  Sup.  Ct.  505,  42  L.  ed.  955, 
where  the  questions  of  reasonable  police  regulations  as  to  public  safety  and 
convenience  in  placing  electrical  wires;  impairment  of  obligation  of  contract; 
offer  to  comply  with  terms  of  ordinance;  nonobligation  to  determine  in  ad- 
vance what  might  or  might  not  be  lawful  requirements;  and  Federal  ques- 
tion, are  all  considered. 

72  Suburban  Light  &  Power  Co.  v.  Board  of  Alderman  of  Boston,  153 
Mass.  200.  3  Am.  Elec.  Cas.  SO,  81,  26  N.  E.  447. 

591 


§  358  ACTIONS    AT    LAW    CONTINUED — MANDAMUS 

Filing  Articles  of  Incorporation  and  Certificates — Issuance 
of  Certificates. 

Mandamus  lies  to  compel  the  Secretary  of  State  to  file  and 
record  articles  of  incorporation,  showing  compliance  with  the 
laws,  upon  a  tender  of  the  proper  fees7^  Such  a  writ  also  lies  to 
compel  the  Secretary  of  State  to  file  an  amended  certificate  of  a 
gas  company,  whereby  it  proposes  to  extend  its  operations  to 
the  production  of  electric  light,  heat  and  power 7^  So  an  in- 
surance company  is  entitled  to  a  mandamus  to  compel  the 
Secretary  of  State  to  file  in  his  ofl&ce  a  certificate  designating 
an  agent  to  receive  process  as  required  by  a  provision  of  the 
Code  of  the  State  where  it  appears  that  the  plaintiff  has  fully 
compHed  with  the  State  statutes  relative  to  foreign  insurance 
companies  and  has  filed  ^vith  the  State  Auditor  all  papers  and 
certified  copies  and  statements  required  by  the  Code,  relating 
to  stock  and  mutual  insurance  corporations/^  As  mandamus 
is,  however,  a  discretionary  writ  it  will  not  issue  to  enable  the 
relator  to  do  an  illegal  act,  thus  where  the  relator  is  a  domestic 
co-operative  and  mutual  benefit  association  and  it  has  been 
refused  a  certificate  by  the  respondent,  the  State  commissioner, 
upon  the  ground  that  the  relator  is  not  doing  business  in  con- 
formity to  law,  that  is,  it  is  not  complying  with  the  law  in  that 
respect,  the  court  will  not  aid  it  in  its  intended  violation  by  the 
discretionary  writ  of  mandamus. '■"  Under  an  Ohio  decision  it  is 
held  that  the  insurance  commissioner  cannot  be  compelled  by 

73  state  ex  rel.  Steubenville  Gas  &  Elec.  Co.  v.  Taylor,  55  Ohio  St.  61,  35 
Ohio  L.  J.  384,  44  N.  E.  513,  4  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  470. 

74  People  ex  rel.  Municipal  Gas  Co.  v.  Rice,  138  N.  Y.  151,  51  N.  Y.  St. 
Rep.  853,  33  N.  E.  846. 

75  State  ex  rel.  Fidelity  &  Casualty  Co.  v.  Rotwitt,  18  Mont.  92,  44  Pac. 
407. 

76  Citizens'  Life  Ins.  Co.  v.  Commissioner  of  Ins.,  128  Mich.  85,  87  N.  W. 
126,  30  Ins.  L.  J.  919.  Under  2  Comp.  Laws  Mich.,  §  7517,  providing  that, 
on  the  filing  of  the  annual  statement  of  a  benefit  association,  if  the  insur- 
ance commissioner  shall  find  that  the  association  is  still  organized  and  doing 
business  conformably  to  law,  he  shall  issue  his  certificate  authorizing  it  to 
continue  the  business,  the  commissioner  may  withhold  the  certificate  on 
finding  that  the  association  is  allo'tving  rebates  in  violation  of  the  law;  and 
this  though  the  following  section  provides  for  the  institution  of  proceedings 
by  the  Attorney-General  in  such  case.     Id. 

592 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS       §§  359-361 

mandamus  to  issue  a  certificate  to  a  company  organized  in  a 
State  where  Ohio  corporations  were  not  permitted  to  carry- 
on  business  on  the  same  basis  substantially  as  in  Ohio7^ 

§  359.  When    Mandamus    Lies— Election    of    Corporate 
Officers. 

A  railway  company  will  be  subject  to  the  laws  of  a  State, 
which  ])rovide  that  in  all  elections  for  directors  or  managers 
of  incorporated  companies  every  stockholder  shall  have  the 
right  to  vote  in  person  or  by  proxy  for  the  number  of  shares  of 
stock  owned  by  him  for  as  many  persons  as  there  are  directors 
or  managers  to  be  elected,  or  to  cumulate  said  shares,  and  give 
one  candidate  as  many  votes  as  the  number  of  directors  multi- 
plied by  the  number  of  his  shares  of  stock  shall  equal,  or  to 
distribute  them  on  the  same  principle  among  as  many  candi- 
dates as  he  shall  think  fit,  and  such  a  mode  of  electing  may  be 
enforced  by  mandamus7^ 

§  360.  When  Mandamus  Lies  to  Compel  Order  Revoking 
Charter  to  Be  Vacated. 

Where  a  benefit  association  is  organized  under  the  laws  of 
Michigan,  and  its  members  are  insured  by  and  under  the  au- 
thority of  the  State  and  by  no  other  right,  mandamus  lies  to 
compel  its  officers  to  vacate  an  order  revoking  the  charter  of  a 
subordinate  lodge  without  cause  and  without  a  hearing.'^'' 

§  361.  When  Mandamus  Lies  to  Reinstate  Member. 

A  mandamus  will  issue  to  compel  the  recognition  of  the  re- 
lator as  a  member  of  a  subordinate  lodge,  which  is  a  domestic 
corporation,  where  such  member  stands  suspended  and  thereby 
loses  his  insurance  because  of  his  refusal  to  pay  an  assessment, 
for  which  he  is  not  liable,  made  under  the  orders  of  the  supreme 
lodge  of  the  order,  which  is  a  foreign  corporation  not  subject  to 

77  State  V.  Moore,  39  Ohio  St.  486. 

78  Cross  V.  West  Virginia  Central  &  Pa.  Ry.  Co.,  35  W.  Va.  174,  12  S.  E. 
1071. 

79  Golden  Star  Lodge  No.  1  v.  Watterson,  158  Mich.  696. 

38  593 


§  302  ACTIONS    AT    LAW    CONTINUED — MANDAMUS 

the  jurisdiction  of  the  court.*"  An  irregular  removal  of  a  mem- 
ber of  a  board  of  governors  of  an  association  formed  under  the 
provisions  of  a  statute  entitled,  "An  act  to  provide  for  the  in- 
corporation of  associations  for  the  erection  and  maintenance  of 
hospitals,  infirmaries,  orphanages,  asylums,  and  other  charita- 
ble institutions,"  *^  will  warrant  the  use  of  the  writ  of  mandamus 
to  restore  him  to  his  corporate  rights  in  said  board. *^ 

§  362.  Mandamus  Lies  to  Enforce  Right  of  Inspection  of 
Books  of  Corporation. 

Under  a  Code  *^  which  provides  that  full  accounts  shall  be 
kept  of  the  transactions  of  the  directors  of  every  corporation, 
'Svhich  shall  be  open  at  all  times  to  the  inspection  of  the  stock- 
holders or  members,"  a  stockholder  is  entitled  to  make  a  per- 
sonal inspection  of  the  books  of  the  corporation  and  cannot  be 
required  to  accept  anything  else  as  a  substitute  for  that;  and 
mandamus  is  a  proper  remedy  to  enforce  this  right  of  inspection 
at  reasonable  times,  if  it  be  refused  by  the  officers  of  the  corpo- 
ration. The  fact  that  the  stockholder  asking  to  inspect  the 
books  is  a  rival  in  business  of  the  corporation,  and  may  use  the 
information  so  obtained  to  the  injury  of  the  corporation,  is  no 
ground  for  refusing  the  writ,  but  it  would  be  denied  if  his  pur- 

80  Lamphere  v.  Grand  Lodge  of  the  Ancient  Order  of  U.  W.,  47  Mich 
429. 

When  mandamus  will  lie  to  reinstate  expelled  members  see  State  ex  rel. 
Vannata  v.  Smith,  61  N.  J.  L.  188,  38  Atl.  811;  Sibley  v.  Carteret  Club,  4 
N.  J.  L.  295;  People  v.  St.  Francis  Benev.  Soc,  24  How.  Pr.  (N.  Y.)  216; 
People  V.  Medical  Soc.  of  E.  N.  24  Barb.  (N.  Y.)  570;  Evans  v.  Philadelphia 
Club,  50  Pa.  St.  107;  Weis  v.  Musical  Protective  Union  (Pa.),  29  Pitts.  L. 
J.  (N.  S.)  1;  Manning  v.  San  Antonio  Club,  63  Tex.  166.  See  Joyce  on  In- 
surance, §  3520. 

When  mandamiis  will  not  lie  to  reinstate  expelled  members,  see  Fraternal 
Mystic  Circle  v.  State,  39  Ohio  L.  J.  43,  48  N.  E.  940. 

81  N.  J.  Act,  approved  March  9,  1877,  Gen.  Stat.,  p.  1686. 

82  Welch  V.  Passaic  Hospital,  59  N.  J.  L.  142,  36  Atl.  702.  Before  such 
member  can  be  removed  from  his  office,  there  must  be  an  inquiry  and  a 
determination  of  the  neglect  of  duties  imposed  upon  such  member  by  the 
constitution  and  by-laws  of  such  association,  and  this  inquiry  and  deter- 
mination can  only  be  made  upon  notice  to  him,  and  an  opportunity  for 
him  to  be  heard  in  his  defense.     Id. 

83Md.Code,  Art.  23,  §  5. 

594 


ACTIONS    AT   LAW    CONTINUED — MANDAMUS  §  363 

pose  were  improper  or  unlawful.  So  an  instruction  to  tlu^  juiy 
that  under  the  pleadings  and  evidence  in  the  case  the  plaintiff 
is  not  entitled  to  recover,  is  too  general,  but  a  judgment  will  not 
be  reversed  for  error  in  granting  such  an  instruction  if  the  court 
is  satisfied  that  there  is  no  ground  upon  which  a  plaintiff  could 
obtain  a  judgment  in  a  second  trial. '*'*  So  where  a  constitu- 
tional provision,^"'''  secures  to  shareholders  of  the  capital  stock 
of  corporations  the  right  to  inspect  the  books  of  such  com- 
panies, if  the  right  of  inspection  is  denied  the  writ  of  manda- 
mus will  lie  to  enforce  it.  By  "public  inspection,"  as  used  in 
such  constitution  is  meant,  not  the  inspection  of  the  idle,  the 
impertinent  or  the  curious — those  without  an  interest  to  sub- 
serve or  protect — but  the  inspection  by  those  with  a  laudable 
object  to  accomplish,  or  a  real  and  actual  interest  upon  which 
is  predicated  the  request  for  information  disclosed  by  the 
books.*^  Again,  where  the  tax  laws  of  the  State  make  it  the 
duty  of  the  county  assessor  to  assess  all  property  that  has  been 
omitted  from  taxation,  a  writ  of  mandate  will  lie  to  compel  a 
building  and  loan  association  to  permit  the  county  assessor  to 
examine  its  books  for  the  purpose  of  determining  whether  any 
of  the  stock  of  such  association  has  been  omitted  from  tax- 
ation.*^ 

§  363.  Mandamus  Lies  to  Compel  Surrender  of  Corpora- 
tion's Books,  Seal  and  Papers. 

Mandamus  lies  to  compel  the  surrender  and  delivery  of  the 
corporation  books  to  the  person  or  persons  entitled  to  their 
custody.**  And  that  writ  is  the  proper  remedy  to  compel  the 
delivery  of  the  seal,  books  and  papers  of  a  corporation  l)y  a 
secretary  who  refuses  to  deliver  them  to  his  successor  in  office, 

84  Weihenmeyer  v.  Bitner,  88  Md.  325,  45  L.  R.  A.  446, 

85  La.  Const.,  Art.  245. 

86  Bourdette,  State  ex  rel.  v.  New  Orleans  Gas  Light  Co.,  49  La.  Ann. 
1556,  22  So.  815. 

87  State  ex  rel.  Morgan,  Assessor,  v.  Real  Estate  Bldg.  &  Loan  Assoc,  151 
Ind.  502,  51  N.  E.  1061. 

88  State  ex  rel.  Immanuel  Presby.  Church  v.  Riedy,  59  La.  Ann.  274,  23 
So.  327. 

595 


§§  304,  365    ACTIONS  at  law  continued — mandamus 

when  it  appears  that  he  does  not  hold  them  under  any  color 
of  right  to  the  ofl&ce.**' 

§  364.  Mandamus  to  Compel  Transfer  of  Certificates  of 
Stock — Lost  Certificates. 

Where  certificates  of  stock  have  been  lost  mandamus  will 
issue  to  compel  a  corporation  to  transfer  on  its  books  the 
original  shares  of  stock,  standing  in  another's  name,  and  to 
issue  and  deliver  to  the  owner  new  certificates  in  his  name.^° 

§  365.  Mandamus  to  Control  Rates,  Charges  and  Fares — 
Discrimination. 

Mandamus  lies  to  compel  a  water  company  to  fix  reasonable 
rate.^^  So  an  electric  light  company  cannot  discriminate  in 
furnishing  electric  light  at  a  reasonable  rate  to  consumers, 
even  though  it  is  not  obligated  to  furnish  service  to  all  its 
patrons  upon  an  absolute  equality  in  the  absence  of  a  statutory 
enactment  to  that  effect.  So  where  it  appeared  that  such  a 
company  furnished  transformers  free  to  all  of  its  patrons  it  was 
held  that  a  refusal  to  furnish  light  to  a  certain  person  unless  he 
would  pay  the  cost  of  a  transformer  was  imjust  discrimination 
and  that  mandamus  would  issue  to  compel  the  furnishing  by 
the  company  of  electricity  for  lighting  purposes.  It  was  also 
decided  that  the  rights  of  the  parties  were  not  affected  by  the 
fact  that  the  company  wired  the  houses  of  its  other  patrons,  on 

89  state  ex  rel.  v.  Guertin,  106  Minn.  248,  119  N.  W.  43. 

When  mandamus  will  not  lie  to  compel  surrender  of  books,  etc.,  of  chari- 
table association.  State  ex  rel.  Jones  v.  Williams,  54  Neb.  154,  74  N.  W. 
396. 

90  State  ex  rel.  Benedict  v.  Mineral  &  Land  Improvement  Co.,  108  La.  24, 
32  So. 174. 

The  oath  for  a  mandamus  taken  hy  the  attorney  to  compel  the  transfer,  on 
the  books  of  the  company,  of  the  original  shares  of  stock  and  to  deliver 
certificates  in  his  name,  was  prima  facie  legal  and  sufficient,  particularly  in 
the  absence  of  all  objection  to  it  in  the  court  of  the  first  instance.  The  ob- 
jection was  only  raised  arguendo  on  appeal.  State  ex  rel.  Benedict  v.  Min- 
eral &  Land  Improvement  Co.,  108  La.  24,  32  So.  174. 

91  People  ex  rel.  Brush  v.  New  York  Suburban  Water  Co.,  56  N.  Y.  Supp. 
364,  38  App.  Div.  413. 

596 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS  §  365 

which  work  it  made  a  large  profit,  while  the  house  of  the  pro- 
posed patron  was  wired  by  other  parties.^^ 

In  Nebraska  mandamus  was  brought  to  compel  a  telephone 
company  to  furnish  an  instrument  and  telephonic  service  in 
relator's  office  at  a  price  less  than  that  demanded  by  the  com- 
pany, a  peremptory  writ  was  obtained  commanding  the  com- 
pany to  furnish  such  instrument  and  service  at  the  relator's 
price;  this  judgment  was  reversed  and  the  proceedings  dis- 
missed. Such  a  public  service  corporation  is  charged  with  cer- 
tain public  duties,  among  which  are  to  furnish  for  a  reasonable 
compensation  to  any  citizen  a  telephone  and  telephonic  service, 
and  to  charge  each  patron  for  the  service  rendered  the  same 
price  it  charges  every  other  patron  for  the  same  service  under 
substantially  the  same  or  similar  conditions;  but  the  power, 
the  jurisdiction,  to  determine  what  compensation  a  public 
service  corporation  may  exact  for  services  to  be  rendered  by  it 
is  a  legislative  and  not  a  judicial  function.  The  jurisdiction  of 
the  court  is  also  limited  to  declaring  what  the  law  is,  and  they 
are  forbidden  by  the  Constitution  to  perform  legislative  func- 
tions.^^ 

92  Snell  V.  Clinton  Electric  Light  Co.,  1Q6  111.  626,  63  N.  E.  1082,  rev'g 
95  111.  App.  552. 

83  Nebraska  Telephone  Co.  v.  State  ex  rel.  Yeiser,  55  Neb.  027,  45  L.  R. 
A.  113,  76  N.  W.  171.  The  court  in  this  case,  per  Ragan,  C,  said:  "The  re- 
spondent in  the  case  at  bar  is  a  private  corporation.  By  permission  of  the 
city  of  Omaha  it  is  occupying  the  streets  and  alleys  of  that  municipality 
with  its  poles,  wires,  and  other  apphances  used  in  the  conduct  of  the  busi- 
ness in  which  it  is  engaged.  It  is  a  common  carrier  of  news  and  intelligence. 
It  is  a  corporation  affected  with  a  pub  he  use — a  public  service  corporation 
— and  as  such  it  has  assumed  and  is  charged  with  certain  public  duties, 
among  which  are  to  furnish  for  a  reasonable  compensation  to  any  inhabit- 
ant of  the  city  of  Omaha  a  telephone  and  telephonic  service,  and  to  charge 
each  of  its  patrons  for  the  service  rendered  or  to  be  rendered  the  same  price 
it  charges  every  other  patron  for  the  same  service  under  substantially  the 
same  or  similar  conditions.  State  v.  Nebraska  Tel.  Co.,  17  Neb.  126,  22 
N.  W.  237;  American  Water  Works  v.  State,  46  Neb.  194,  64  N.  W.  711; 
Western  Union  Tel.  Co.  v.  Call  Pub.  Co.,  44  Neb.  326,  62  N.  W.  506.  But 
the  judgment  under  consideration  determines  not  only  that  the  telephone 
company  shall  render  for  the  relator  the  service  required  by  him,  but  fixes 
and  determines  as  well  what  compensation  the  relator  shall  pay  to  the  re- 
spondent for  such  service.    This  judgment,  then,  in  effect  determines,  de- 

597 


§  365  ACTIONS    AT    LAW    CONTINUED — MANDAMUS 

Under  a  Minnesota  statute  ^*  the  determination  of  the  Rail- 
road and  Warehouse  Commission  as  to  what  are  equal  and 
reasonable  fares  and  rates  for  the  transportation  of  persons  and 

cides,  and  fixes  the  charges  which  the  respondent  may  lawfully  exact  for 
services  to  be  rendered  in  future  by  it  to  its  patrons.  Where  a  public  serv- 
ice corporation  has  performed  a  service  and  sues  to  recover  therefor,  in 
the  absence  of  an  express  contract  for  a  specific  compensation  the  measure 
of  its  damages  is  a  reasonable  compensation  for  the  services  performed; 
and  whether  the  compensation  which  it  demands  is  reasonable  is  a  judicial 
question.  Where  the  legislature  has  fixed  the  compensation  which  a  public 
service  corporation  may  exact  for  the  performance  of  a  service,  then  the 
reasonableness  of  the  compensation  so  fixed  by  the  legislature — that  is, 
whether  the  limiting  of  the  corporation  to  the  compensation  fixed  by  the 
statute  would  result  in  a  confiscation  of  the  corporation's  property — is  a 
judicial  question.  Smyth  v.  Ames,  169  U.  S.  466,  18  Sup.  Ct.  418,  42  L.  ed. 
819.  But  the  power — the  jurisdiction — to  determine  what  compensation 
a  public  service  corporation  may  exact  for  service  to  be  rendered  by  it  we 
understand  to  be  a  legislative,  and  not  a  judicial  function.  In  the  case  at 
bar  the  respondent  had  not  performed  services,  and  sued  to  recover  the 
compensation.  If  it  had,  the  relator  might  have  defended  upon  the  ground 
that  the  compensation  demanded  was  unreasonable,  and  the  court  would 
have  had  jurisdiction  to  determine  the  question.  The  case  at  bar  is  not  a 
suit  by  the  relator  for  damages  against  the  respondent  for  its  neglect  and 
refusal  to  render  to  him  for  a  reasonable  compensation  the  service  he  de- 
manded. In  the  case  at  bar  the  relator  did  not  pay  the  compensation  al- 
leged to  be  exorbitant,  wliich  the  respondent  demanded,  and  then  sue  to 
recover  back  the  excess.  Had  he  done  so  it  may  be  that  the  court  would 
have  had  the  power  to  determine  whether  the  compensation  actually  de- 
manded and  received  by  the  respondent  was  unreasonable.  But  here  the 
court  determines  that  the  respondent  shall  perform  for  the  relator  a  specific 
service  for  three  months  for  a  specific  sum  of  money.  This,  in  effect,  was  a 
determination  by  the  court  that  three  dollars  per  month  was  a  reasonable 
compensation  for  the  services  required  to  be  rendered  by  the  respondent, 
and  a  fixing  of  the  compensation  for  such  service  at  that  price  for  the  fu- 
ture. 

"  We  think  the  history  of  the  legislation  of  the  entire  country  shows  that 
the  power  to  determine  what  compensation  pubhc  service  corporations 
may  demand  for  their  services  is  a  legislative  function,  and  not  a  judicial 
one.  If  the  courts  may  determine  what  compensation  a  telephone  company 
may  exact  for  a  service  to  be  rendered  in  the  future,  we  know  of  no  reason 
why  the  courts  may  not  determine  the  freight  and  passenger  rates  which 
the  railway  corporations  of  the  State  may  charge  for  the  transportation  of 
freight  and  passengers;  and  yet  the  framers  of  our  Constitution  recognized 
that  this  power  to  fix  the  compensation  of  public  service  corporations  was 
a  legislative  one,  as  by  that  instrument  they  expressly  confer  upon  the 

M  Laws,  1887,  c.  10,  §  8. 
598 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS  §  366 

property  by  a  railway  company  is  conclusive,  and,  in  proceed- 
ings by  mandamus  to  compel  compliance  with  the  tariff  of  rates 
recommended  and  published  by  them,  no  issue  can  be  raised  or 
inquiry  had  on  that  question.**^ 

§  366.  When  Mandamus  Lies  Against  Common  Carrier, 
Generally. 

When  a  common  carrier  refuses  absolutely  to  recognize  a  cer- 
tain duty  which  is  claimed  to  rest  upon  it  as  such  and  to  per- 
form it  under  any  terms  and  conditions,  the  party  claiming  the 
existence  of  such  duty  may  test  tliat  fact  by  mandamus,  leaving 

legislature  the  power  from  time  to  time  to  pass  laws  establishing  reasonable 
rates  or  charges  for  the  transportation  of  passengers  and  freight.  Section  4, 
Art.  11,  Const.  And  it  is  evident  that  the  legislature  has  acted  upon  the 
theory  that  this  power  to  fix  the  compensation  of  public  service  corporations 
is  one  vested  in  it  by  the  Constitution.  This  is  evident  from  its  creation  of 
the  board  of  transportation,  and  the  powers  conferred  upon  that  board; 
and  as  late  as  1897  the  legislature  conferred  authority  upon  the  mayor  and 
council  of  cities  of  the  metropolitan  class  to  fix  and  determine  by  ordinance 
what  compensation  telephone  companies  doing  business  within  such  cities 
might  charge  and  exact  for  services  rendered,  or  to  be  rendered  by  them. 
Comp.  St.,  1897,  c.  12n,  §  131.  Fixing  a  compensation  which  public  service 
corporations  may  charge  for  services  to  be  rendered  by  them  is  legislating; 
it  is  lawmaking.  The  power  of  the  courts  is  limited  to  declaring  what  the 
law  is,  and  they  are  precluded  by  the  Constitution  from  performing  legis- 
lative functions;  and,  though  the  courts  of  the  land  have  from  time  to  time 
declared  laws  fixing  the  compensation  which  public  service  corporations 
might  charge  for  services  to  be  rendered  by  them  void  because  the  compen- 
sation fixed  by  the  law  was  unreasonable  in  that  the  enforcement  of  the 
statute  would  confiscate  the  corporation's  property,  and  thereby  deprive  it 
of  its  property  without  due  process  of  law,  we  know  of  no  court  which  has 
ever  claimed  that  it  had  the  authority  to  determine  what  compensation 
would  be  a  reasonable  one  for  a  service  to  be  performed  by  such  corpora- 
tion. The  relator  must  address  himself  for  relief  from  the  grievances  of 
which  he  complains  to  the  legislative  power  of  the  State, — to  the  legisla- 
ture itself,  to  the  board  of  transportation,  to  the  mayor  and  council  of  the 
city  of  Omaha.  If  the  compensation  now  charged  and  exacted  by  the 
telephone  companies  of  the  State  is  exorbitant  and  unreasonable,  we  must 
presume  that  the  board  of  transportation,  the  mayor  and  council  of  the 
city  of  Omaha,  and  the  legislature  of  the  State,  one  and  all  of  them,  will 
investigate  the  matter  and  prescribe  a  scale  of  reasonable  charges.  The 
judgment  of  the  district  court  is  reversed,  and  the  proceeding  dismissed." 

"5  State  ex  rel.  Railroad  &  Warehouse  Commission  v.  Chicago,  Milwaukee 
&  St.  Paul  Ry.  Co.,  ,38  Minn.  281,  37  N.  W.  782. 

599 


§§367,368    ACTIONS  at  law  continued — mandamus 

open  the  question  as  to  the  specific  terms  and  conditions  upon 
which  it  is  to  be  performed.''^  Mandamus  also  lies  to  compel 
the  running  of  passenger  cars  separate  from  freight  trains.^^ 

§  367.  Mandamus — Limitation  of  Remedy  Under  Act  to 
Regulate  Commerce — Interstate  Commerce  Commission. 

Under  the  act  to  regulate  commerce  ^^  the  remedy  of  manda- 
mus is  limited  to  compelling  the  performance  of  duties  which 
are  either  so  plain  as  not  to  require  a  prerequisite  exertion  of 
power  by  the  Interstate  Commerce  Commission,  or  which 
plainly  arise  from  the  obhgatory  force  given  by  the  statute  to 
existing  orders  rendered  by  the  commission  within  the  lawful 
scope  of  its  authority. 


99 


§  368.  When  Mandamus  Lies  and  Does  Not  Lie  Against 
Railroad  Company. 

In  an  action  in  mandamus  to  compel  a  railway  company  to 
furnish  cars  for  a  shipper,  the  proof  established  that  the  relator 
desired  to  ship  his  hay  in  carload  lots;  that  he  had  repeatedly 
requested  the  carrier  to  furnish  him  cars  for  said  purpose,  and 
that  it  had  failed  to  do  so.  No  reasonable  excuse  was  shown 
for  such  conduct.  It  was  held,  that  a  peremptory  writ  of  man- 
damus in  favor  of  the  shipper  and  against  said  corporation  was 
proper.^    Mandamus  will  not  lie  to  compel  a  railroad  company 

86  Cumberland  Teleph.  &  Teleg.  Co.  v.  Morgan's  L.  &  S.  Ry.  Co.,  51  La. 
Ann.  29,  72  Am.  St.  Rep.  442,  24  So.  803. 

87  People  ex  rel.  Cantrell  v.  St.  Louis,  A.  &  T.  H.  Rd.  Co.,  176  111.  512,  52 
N.  E.  292,  aff'g  45  N.  E.  824,  .35  L.  R.  A.  656. 

88  Section  23,  although  added  thereto  in  1889,  is  construed  in  the  light  of 
§  15,  as  amended  in  1906. 

89  Baltimore  &  Ohio  R.  R.  Co.  v.  Pitcaim  Coal  Co.,  215  U.  S.  481,  54  L. 
ed. ,  .30  Sup.  Ct.  — .  Petition  in  mandamus  by  a  shipper  averring  dis- 
crimination in  distribution  of  coal  cars  by  the  Baltimore  &  Ohio  Railroad 
dismissed  because  the  matter  had  not  been  first  submitted  to  the  Interstate 
Commerce  Commission. 

1  State  V.  Chicago  &  Northwestern  R.  Co.,  83  Neb.  524,  120  N.  W.  163. 
It  was  also  held  in  this  case  that  chap.  90,  of  the  Laws  of  Nebraska,  1907, 
will  not  in  every  instance  afford  a  shipper  an  adequate  remedy  against  a 
railway  company  that  unlawfully  neglects  and  refuses  to  furnish  cars  for 
the  transportation  (jf  his  goods  and  chattels.    The  court,  per  Root,  J.,  said: 

600 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS  §  368 

to  build  a  station  at  a  particular  })lace  unless  there  is  a  specific 
duty,  imposed  by  statute,  to  do  so,  and  clear  proof  of  a  breach 
of  that  duty .2  Where,  in  case  of  a  reorganized  corporation, 
neither  the  charter  nor  the  general  law  required  the  original 
company  or  requires  the  new  company  to  maintain  and  operate 
a  branch  railroad  into  a  certain  city  said  corporation  is  within 
the  rule  that  a  writ  of  mandamus  can  only  be  used  to  enforce 
duties  and  obligations  clearly  imposed  by  the  charter  or  the 
general  law.  So  "where  the  line  of  railway,  taken  as  a  whole, 
cannot  be  profitably  maintained;  where  its  operation  when  dis- 
creetly and  economically  managed,  is  attended  with  loss,  it  is 
difficult  to  perceive  how  a  court  can,  by  mandamus  or  other- 
wise, compel  its  operation  to  be  continued."  ^  A  writ  of  manda- 
mus commanding  railroad  companies  to  construct  a  viaduct 
across  their  tracks,  which  contains  no  plans  or  specifications 
of  the  work  to  be  done,  cannot  be  sustained.  And,  where  a 
viaduct  is  to  be  built  across  the  tracks  of  several  railroad  com- 
panies and  the  tracks  are  so  situated  as  to  require  joint  work  in 
constructing  the  viaduct  across  some  of  the  tracks,  mandamus 
is  not  a  proper  remedy  to  compel  the  railroad  companies  to 
construct  the  viaduct,  but  all  the  companies  should  be  made 

"Independent  of  the  commission  law  or  any  other  special  statute,  it  was 
defendant's  duty  to  furnish  reasonably  adequate  provisions  for  the  transpor- 
tation of  freight  offered  it  for  shipment  over  its  railway,  and  to  serve  its 
patrons  without  discrimination.  State  v.  Chicago,  BurUngton  &  Quincy 
Rd.  Co.,  71  Neb.  593.  And  the  courts  will  compel  by  mandamus  the  dis- 
charge of  that  duty  in  a  proper  case.  State  v.  Chicago,  B.  &  Q.  R.  Co., 
supra.  Any  other  remedy  is  not  adequate,  unless  it  will  furnish  the  aggrieved 
party  relief  upon  the  very  subject-matter  of  his  application.  State  v. 
Stearns,  11  Neb.  104;  Hopkins  v.  State,  64  Neb.  10;  Fremont  v.  Crippen, 
10  Cal.  211;  Babcock  v.  Goodrich,  47  Cal.  488.  In  cases  like  the  one  at  bar 
proceedings  before  the  commission  will  not  afford  that  relief.  The  order, 
if  made  by  the  commission,  is  simply  a  step  incident  to  an  action  in  the  dis- 
trict court,  which  may  be  anticipated  and  restrained  by  the  carrier  for  an 
indefinite  time  by  an  action  in  a  court  distant  from  the  residence  of  the 
complainant." 

2  Northern  Pacific  Rd.  Co.  v.  Dustin,  142  U.  S.  492,  12  Sup.  Ct.  283,  35 
L.  od.  1092;  State  ex  rel.  Smart  v.  Kansas  City,  S.  &  G.  R.  Co.,  51  La.  Ann. 
200,  25  So.  126. 

3  Sherwood  v.  Atlantic  &  Danville  Ry.  Co.,  94  Va.  291,  .306,  26  S.  E.  943, 
6  Am.  &  Eng.  R.  Cas.  (N.  vS.)  670,  per  Keith,  P. 

601 


§  369  ACTIONS    AT    LAW    CONTINUED — MANDAMUS 

parties  to  one  equitable  action  wherein  one  decree  could  des- 
ignate what  part  of  the  viaduct  should  be  built  jointly  and 
the  portion  of  the  expense  to  be  borne  by  each  company,  and 
also  what  part  should  be  separately  constructed  by  the  different 
companies.^  If  the  charter  of  a  railroad  company  requires  it  to 
establish  a  terminus  of  the  road  at  one  of  two  points  to  be  se- 
lected by  it,  the  obligation  imposed  by  the  charter  is  satisfied 
by  the  construction  and  maintenance  of  such  terminus  at  either 
of  the  points  prescribed,  and  the  purchaser  of  said  railroad 
under  foreclosure  proceedings  cannot  be  compelled  by  manda- 
mus to  establish  a  terminus  at  the  other  point,  although  such 
other  point  may,  at  one  time,  have  been  used  as  such  terminus 
under  a  contract  with  the  original  company.^ 

§  369.  When  Mandamus  Lies  and  Does  Not  Lie  Against 
Street  Railroad  Company. 

Mandamus  lies  to  compel  the  operation  of  a  street  railway 
company  where  it  attempts  to  discontinue  an  existing  service.^ 
Mandamus  is  the  proper  remedy  to  compel  a  street  railway 
company  to  perform  its  duty  to  maintain  and  operate  its  road 
in  conformity  with  the  provisions  of  its  grant/  Mandamus 
may  also  issue  to  compel  the  issuance  of  a  transfer  over  the  line 
of  a  street  railway.*  In  Connecticut  the  statute  ^  provides  that 
the  mayor  and  common  council  of  each  city  shall  have,  in  the 
first  instance,  exclusive  control  over  the  placing  of  street  rail- 
way tracks  in  the  city  streets,  and  of  changes  of  grade  of  such 
railway,  and  if  any  railway  company  shall  fail  to  obey  their 
orders  in  those  respects  they  "may  proceed  by  mandamus  to 

4  Burlington  &  Colorado  Ry.  Co.  v.  People,  20  Colo.  App.  181,  77  Pac. 
1026. 

5  Sherwood  v.  Atlantic  &  Danville  Ry.  Co.,  94  Va.  291,  26  S.  E.  943,  6 
Am.  &  Eng.  R.  Cas.  (N.  S.)  670. 

8  Stat«  ex  rel.  Grinsfelder  v.  Spokane  Street  R.  Co.,  19  Wash.  518,  53  Pac. 
719,  41  L.  R.  A.  515. 

7  Potwin  Place,  City  of,  v.  Topeka  Ry.  Co.,  51  Kan.  609,  33  Pac.  309,  37 
Am.  St.  Rep.  312;  State  ex  rel.  Bridgeton  v.  Bridgeton  &  M.  Tract.  Co.,  63 
N.  J.  L.  502,  43  Atl.  715. 

8  Richmond  Ry.  &  Electric  Co.  v.  Brown,  97  Va.  26,  32  S.  E.  775,  1  Va. 
S.  C.  Rep.  213. 

9  Gen.  Stat.,  §  3824  (see  Pub.  Acts  of  1907,  p.  800,  ch.  219). 

602 


ACTIONS    AT    LAW    CONTINrED— MANDAMUS  §  370 

compel  such  company,  at  its  own  expense,  to  carry  out  such 
orders. "  Such  writs  have  been  frequently  issued.^"  In  a  man- 
damus application  brought  by  the  State,  on  relation  of  the  at- 
torney for  the  board  of  railroad  commissioners,  to  require  a 
street  railway  company  to  construct  a  subway  beneath  the 
tracks  of  a  railroad  a  peremptory  writ  was  awarded;  in  such  a 
case  the  city  is  not  a  necessary  party .^'  Mandamus  will  not, 
however,  be  granted  to  compel  a  street  railway  company  to 
keep  its  cars  running  over  the  whole  of  each  line  during  the 
entire  year.^^ 

§  370.  When  Street  Railway  Company  Is  and  Is  Not  En- 
titled to  Mandamus. 

Where  an  ordinance  of  a  city  provided  that  no  person  should, 
under  any  pretext,  dig  up  any  of  the  streets  of  the  city  without 
having  first  obtained  a  written  permit  therefor  from  the  city 
commissioner,  approved  by  the  mayor;  it  was  held,  that  if  a 
person  or  corporation  is  duly  empowered  by  ordinance  or  legis- 
lative enactment  to  do  an  act  involving  such  digging  up  of 
streets,  as,  for  instance,  to  lay  a  street  railway,  neither  the 
mayor  nor  the  city  commissioner  can  prevent  the  performance 
of  that  act  by  refusing  to  issue  the  permit,  and  in  such  cases  its 
issue,  not  involving  the  exercise  of  a  discretion,  can  be  en- 
forced by  mandamus.    But  if  a  person  or  corporation  has  not 

10  State  ex  rel.  Waterbury  v.  New  York,  New  Haven  &  Hfd.  Rd.  Co.,  81 
Conn.  645,  655,  71  Atl.  942,  per  Baldwin,  J.,  citing  Hartford  v.  Hartford 
Street  Ry.  Co.,  73  Conn.  327,  47  Atl.  330;  State  ex  rel.  Howard  v.  Hartford 
Street  Ry.  Co.,  76  Conn.  174,  56  Atl.  506. 

11  State  ex  rel.  Dawson  v.  Parsons  St.  Ry.  &  Electrical  Co.  (Kan.,  1909), 
105  Pac.  704.  The  court,  per  Mason,  J.,  said:  "The  final  objection  that  is 
thought  to  require  specific  mention  is  that  the  writ  ought  not  to  issue  be- 
cause, granting  that  the  street  railway  company  must  construct  the  kind 
of  crossing  prescribed  by  the  board  or  none  at  all,  it  is  under  no  public  duty 
to  construct  any,  and  therefore  is  not  subject  to  mandamus  in  that  regard. 
The  allegations  of  the  alternative  writ  show  that  the  company  is  now  op- 
erating a  continuous  line  from  one  side  of  the  city  to  the  other,  save  for  the 
break  caused  by  the  railroad  tracks.  This  arrangement  may  be  regarded  as 
in  effect  an  operation  of  the  street  railway  across  the  railroad  by  means  of 
a  transfer,  and  it  is  competent  for  the  Railroad  Commissioners  to  order  this 
method  to  be  changed.    A  peremptory  writ  will  be  awarded."    Id.,  706. 

12  Kingston  v.  Kingston,  P.  &  C.  Elec.  R.  Co.,  28  Ont.  Rep.  399. 

603 


§  371  ACTIONS    AT    LAW    CONTINUED — MANDAMUS 

the  right  to  do  the  thing  which  it  is  proposed  to  do  under  the 
permit  apphed  for,  the  mayor  would  be  under  no  obhgation 
to  issue  it,  not  because  he  has  a  discretionary  power  to  grant  or 
withhold  it,  but  because,  either  with  or  without  the  permit,  the 
proposed  act  would  be  illegal.  And  where  a  railroad  company 
fails  to  comply  with  the  conditions  of  an  ordinance,  authorizing 
the  construction  of  tracks,  etc.,  upon  certain  streets  but  pro- 
viding a  time  limit  both  as  to  commencing  and  completing  the 
road,  and  said  company  by  such  noncompliance  has  forfeited 
its  right  under  the  ordinance  it  will  not  be  entitled  to  a  manda- 
mus to  compel  the  mayor  and  city  commissioner  to  issue  a 
permit  to  dig  up  the  streets  for  the  purpose  of  laying  the  tracks 
of  the  company .^^  Mandamus  will  not  issue  in  behalf  of  a  street 
railway,  where  an  appeal  is  pending  and  questions  important 
to  the  public  and  the  parties  are  presented  thereby,  and  said 
railway  is  protected  by  a  sufficient  undertaking,  given  by  the 
appellants,  and  the  necessity  for  exercising  the  claimed  right 
before  determination  of  the  appeal  is  not  apparent.  This  was 
held  in  a  case  where  a  street  passenger  railway  sought  to  con- 
demn a  way  for  a  trolley  line  across  a  railroad's  right  of  way, 
and  to  compel  the  joint  construction  of  the  crossing.  It  did 
not  appear  that  there  was  a  necessity  for  putting  in  said  crossing 
before  the  litigation  and  the  right  to  the  crossing  were  finally 
determined. ^^ 

§  371.  When  Mandamus  Lies  and  Does  Not  Lie  Against 
Telephone  Companies. 

Mandamus  lies  to  compel  a  telephone  company  to  place  their 
telephones  and  furnish  telephonic  facilities  without  discrimina- 
tion for  those  who  will  pay  for  the  same  and  abide  the  reason- 
able regulations  of  the  company .^^  Mandamus  also  lies  to  com- 
pel the  restoration  of  a  telephone  and  the  giving  of  service  to  a 

13  State  ex  rel.  Baltimore,  Canton  &  P.  B.  Ry.  Co.  v.  Latrobe,  SI  Md.  222, 
31  Atl.  788. 

H  State  ex  rel.  Oshkosh,  A.  &  B.  W.  R.  Co.  v.  Burnell,  104  Wis.  246,  80 
N.  W.  460. 

15  Godwin  v.  Carolina  Teleph.  &  Teleg.  Co.,  136  N.  C.  258,  48  S.  E.  636, 
67  L.  R.  A.  251,  per  Clark,  J. 

604 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS  §  371 

ciLstomer.^^  And  the  writ  may  be  issued  to  compel  a  telephone 
company  to  place  a  telephone  in  a  telegraph  company's  office, 
within  the  territory  of  the  former,  notwithstanding  a  contract 
with,  or  license  from,  the  parent  company  owning  the  patent, 
which  forbids  the  licensee  to  furnish  telephonic  facilities  to  any 
telegraph  company,  except  those  designated  by  the  licensor. 
This  rule  as  to  the  last  point  is  well  settled. ^^  A  telephone  com- 
pany will  not,  however,  be  compelled  to  install  an  instrument 
in  a  rival  company's  office,  under  a  statute  requiring  such  corpo- 
rations to  transmit  the  messages  of  other  companies,  since  the 
remedy  by  way  of  penalty,  provided  by  the  statute,  is  adequate 
at  law  and  is  exclusive.^*  Nor  will  the  writ  be  issued  to  compel 
placing  a  telephone  in  a  house  which  is  used  for  an  unlawful 
purpose,  as  in  a  case  where  the  application  was  made  to  compel 
the  defendant  to  put  a  telephone  with  necessary  fixtures  and 
appliances  in  the  dwelling  house  of  the  plaintiff  who  was  ad- 
mitted to  be  a  prostitute  and  keeper  of  that  house  as  a  bawdy- 
house.  The  objection  was  not  to  her  character  but  to  the 
character  of  her  business  at  the  house  where  it  was  sought  to 
have  the  telephone  placed  since  she  would  not  be  debarred 
from  the  right  to  have  a  telephone  placed  in  another  house 
owned  by  her  but  not  kept  as  a  bawdyhouse.^" 

16  State  ex  rel.  Payne  v.  Kimlock,  93  Mo.  App.  349,  67  S.  W.  684. 

17  United  States:  State  ex  rel.  Postal  Teleg.  Cable  Co.  v.  Delaware  &  Atl. 
Teleg.  &  Teleph.  Co.,  47  Fed.  632,  aff'd  in  50  Fed.  677;  State  ex  rel.  Balti- 
more &  Ohio  Teleg.  Co.  v.  Bell  Teleph.  Co.,  23  Fed.  539  (court  divided). 

Indiana:  Central  Union  Teleph.  Co.  v.  State,  123  Ind.  113,  24  N.  E.  215, 
8.  c,  124  Ind.  600,  24  N.  E.  1091;  Central  Un.  Tel.  Co.  v.  State,  118  Ind. 
194,  19  N.  E.  604. 

Maryland:  Chesapeake  &  Pot.  Teleph.  Co.  v.  Baltimore  &  Ohio  Teleg. 
Co.,  66  Md.  399,  7  Atl.  809. 

New  York:  People  ex  rel.  Postal  Teleg.  Cable  Co.  v.  Hudson  River  Teleph. 
Co.,  10  N.  Y.  St.  Rep.  282,  19  Abb.  N.  C.  466. 

Vermont:  Commercial  Union  Teleg.  Co.  v.  New  England  Teleph.  &  Teleg. 
Co.,  61  Vt.  241,  15  Am.  St.  Rep.  893. 

18  People  ex  rel.  Oneida  Toleph.  Co.  v.  Central  New  York  Teleph.  &  Teleg. 
Co.,  58  N.  Y.  Supp.  221,  41  App.  Div.  17.  Compare  Central  Union  Teleph. 
Co.  V.  State,  118  Ind.  144,  194,  206,  19  N.  E.  604.    See  §  380,  herein. 

19  Godwin  V.  Carolina  Teleph.  &  Teleg.  Co.,  136  N.  C.  258,  48  S.  E.  636, 
67  L  R.  A.  251. 

605 


§§  372,  373    ACTIONS  at  law  continued — mandamus 

§  372.  When  Mandamus  Lies  and  Does  Not  Lie  Against 
Telegraph  Companies. 

It  is  held  that  a  stock  telegraph  company,  one  of  whose  corpo- 
rate purposes  is  to  furnish  market  quotations,  may  be  com- 
pelled by  mandamus  to  replace  a  ticker  removed  from  a  custo- 
mer's office  and  furnish  service  therefor.^"  But  such  writ  does 
not  lie  to  compel  a  telegraph  company  to  permit  a  telephone  to 
be  placed  in  its  office  for  receiving  and  transmitting  messages, 
as  the  former  company  cannot  be  compelled  to  receive  oral 
messages,  even  though  it  has  waived  its  rights  in  this  respect, 
and  has  permitted  another  telephone  company  to  place  its 
instrument  in  said  office,^^ 

§  373.  When  Mandamus  Lies  and  Does  Not  Lie  Against 
Water  Companies. 

Mandamus  is  an  appropriate  remedy  to  compel  a  public 
service  water  company  to  supply  its  customers  with  water  upon 
compliance  with  its  reasonable  rules  and  regulations;  and  such 
a  company  has  the  undoubted  right  to  adopt  reasonable  rules 
and  regulations  for  the  conduct  of  its  business  and  it  is  a 
customer's  duty  to  comply  therewith;  but  in  the  absence  of  a 
statute  making  water  rents  a  lien  or  incumbrance  upon  the 
premises,  such  a  regulation  is  not  reasonable  if  it  can  be  con- 
strued as  authorizing  the  cutting  off  of  a  water  supply  should  a 
tenant  refuse  to  pay  delinquent  water  rents  due  by  the  landlord 
or  former  occupant,  as  this  would  coerce  a  person  to  pay  the 
debt  of  another;  otherwise  as  to  cutting  off  a  consumer's  water 
supply  until  he  has  paid  rents  due  by  him.^^ 

20  Davis  V.  Electric  Rep.  Co.  (Pa.),  19  Wkly.  N.  C.  567,  2  Am.  Elec.  Cas. 
375.    Compare  Renville,  In  re,  61  N.  Y.  Supp.  549,  46  App.  Div.  37. 

21  People  ex  rel.  Cairo  Teleph.  Co.  v.  Western  Union  Teleg.  Co.,  166  111. 
15,  46  N.  E.  731,  36  L.  R.  A.  637. 

22  Poole  V.  Paris  Mountain  Water  Co.,  81  S.  C.  438,  62  S.  E.  874.  The 
court,  per  Jones,  J.,  said:  "The  respondent  cut  off  petitioner's  water  supply 
contrary  to  its  rules,  for  nonpayment  of  a  bill  which  appeared  to  be  exor- 
bitant, and  which  petitioner  in  good  faith,  and  with  show  of  reason,  dis- 
puted, and  thereafter  respondent  refused  to  enter  into  a  contract  to  supply 
petitioner  for  the  current  year,  except  upon  payment  of  the  disputed  bill. 
While  a  public  service  water  company  has  the  right  to  cut  off  a  consumer's 

606 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS  §  374 

Mandamus  may  also  be  employed  to  compel  a  water  com- 
pany to  extend  its  mains  in  a  city,  where  under  the  contract 
between  the  city  and  the  company  it  is  the  duty  of  the  com- 
pany to  make  such  extension.^^  But  where  there  is  no  fraud 
or  mistake  set  up,  a  contract  voluntarily  made  with  a  water 
company  and  partly  carried  out  for  a  long  time  cannot  be 
ignored  by  a  person  so  entering  into  said  contract  so  as  to 
enable  him  to  maintain  mandamus  against  such  company  to 
compel  it  to  furnish  water  to  him.^"* 

§  374.  Jurisdiction  of  Mandamus  Proceedings. 

The  general  power  of  the  Federal  Supreme  Court  to  issue  a 
writ  of  mandamus  to  an  inferior  court,  to  take  jurisdiction  of 
a  cause  when  it  refuses  to  do  so,  is  settled  by  a  long  line  of  de- 
cisions; but  mandamus  only  lies  in  that  court,  as  a  general 
rule,  where  there  is  no  other  adequate  remedy;  nor  can  it  be 
availed  of  as  a  writ  of  error .^^   A  writ  of  mandamus  issued  under 

water  supply  for  nonpayment  of  recent  and  just  bills  for  water  rents,  and 
may  refuse  to  engage  to  furnish  further  supply  until  said  bills  are  paid,  the 
right  cannot  be  exercised  so  as  to  coerce  the  consumer  into  paying  a  bill 
when  it  is  unjust,  or  which  the  consumer  in  good  faith  and  with  show  of 
reason  disputes,  by  denying  him  such  a  prime  necessity  of  life  as  water, 
when  he  offers  to  comply  with  the  reasonable  rules  of  the  company  as  to 
such  supply  for  the  current  term.  State  ex  rel.  Gwynn  v.  Citizens'  Tel.  Co., 
61  S.  C.  98,  39  S.  E.  257,  55  L.  R.  A.  139,  85  Am.  St.  Rep.  870;  McEntee  v. 
Kingston  Water  Co.,  165  N.  Y.  27,  58  N.  E.  785;  Wood  v.  City  of  Auburn, 
87  Me.  287,  32  Atl.  906,  29  L.  R.  A.  376."  The  court  also  cited  upon  the 
point  of  reasonable  regulations  and  the  right  to  cut  off  a  water  supply,  the  fol- 
lowing cases: 

California:  Sherwood  v.  Citizens'  Water  Co.,  90  Cal.  635,  27  Pac.  439. 

Massachusetts:  Turner  v.  Revere  Water  Co.,  171  Mass.  329,  50  N.  E.  634, 
40  L.  R.  A.  657,  68  Am.  St.  Rep.  432. 

Mississippi:  Burke  v.  City  of  Water  Valley,  87  Miss.  732,  40  So.  820,  112 
Am.  St.  Rep.  468. 

New  York:  People  v.  Manhattan  Gas  Light  Co.,  45  Barb.  (N.  Y.)  136. 

Washington:  Liune  v.  Bredes,  43  Wash.  540,  86  Pac.  858,  6  L.  R.  A. 
(N.  S.)  707,  117  Am.  St.  Rep.  1070;  Tacoma  Hotel  Co.  v.  Tacoma  Land  Co., 
3  Wash.  316,  28  Pac.  516,  14  L.  R.  A.  669,  28  Am.  St.  Rep.  35. 

23Topeka,  City  of,  v.  Topeka  Water  Co.,  58  Kan.  349,  49  Pac.  79. 

24  State  ex  rel.  Crawford  v.  Minnesota  &  M.  Land  &  Inv.  Co.,  20  Mont. 
198,  50  Pac.  420. 

25  Atlantic  City  Railroad,  In  re,  164  U.  S.  633,  41  L.  ed.  579,  17  Sup.  Ct. 

607 


§  374  ACTIONS    AT    LAW    CONTINUED — MANDAMUS 

§  688  of  the  United  States  Revised  Statutes,  is  for  the  purpose 
of  revising  and  correcting  proceedings  in  a  case  ah-eady  insti- 
tuted in  the  courts  and  is  part  of  the  appellate  jurisdiction  of  the 
Federal  Supreme  Court  which  is  subject  to  such  regulations  as 
Congress  shall  make.^*^  Circuit  Courts  of  the  United  States, 
until  Congress  shall  otherwise  provide,  have  no  power  to  issue 
a  writ  of  mandamus  in  an  original  action  for  the  purpose  of  se- 
curing relief  by  the  writ,  although  the  relief  sought  concerns 
an  alleged  right  secured  by  the  Constitution  of  the  United 
States.27  Not  has  the  Federal  Circuit  Court  any  original  juris- 
diction to  issue  a  writ  of  mandamus  at  the  instance  of  the  In- 
terstate Commerce  Commission  against  a  railroad  company  to 
compel  it  to  make  a  report  of  the  matters  and  things  specified 
in  §  20  of  the  act  of  Congress  to  regulate  commerce  where  juris- 
diction to  issue  mandamus  is  conferred  under  another  section, 
in  certain  other  cases,  and  it  is  clear  that  when  Congress  in- 
tended to  give  the  power  to  issue  such  a  writ  it  expressed  that 
intention  explicitly,  and  it  also  appears  under  other  sections 
that  special  remedies  are  given.^s    And  where  an  original  action 

208,  citing  Pennsylvania  Company,  In  re,  137  U.  S.  451,  11  Sup.  Ct.  141,  34 
L.  ed.  738;  Morrison,  In  re,  147  U.  S.  14,  13  Sup.  Ct.  246,  37  L.  ed.  60;  Rail- 
way Co.,  Ex  parte,  103  U.  S.  794,  26  L.  ed.  461;  Baltimore  &  Ohio  Rd.  Co., 
Ex  parte,  108  U.  S.  566,  27  L.  ed.  812,  2  Sup.  Ct.  876.  A  case  of  petition 
for  writ  of  mandamus  by  a  corporation  directed  to  the  judges  of  a  Federal 
Circuit  Court,  commanding  them  to  dismiss,  "As  against  your  petitioner," 
the  bill  of  complaint  in  the  suit,  and  to  vacate  against  the  petitioner,  a  cer- 
tain order  overruHng  the  demurrer  of  the  petitioner  and  to  enter  a  decree 
to  that  effect.  It  was  averred  that  the  petitioner  had  a  defense  on  the 
merits  and  that  it  had  no  adequate  remedy  by  appeal,  unless  the  Federal 
Supreme  Court  "  will  grant  the  mandamus  as  herein  petitioned."  The 
question  of  waiver  of  jurisdiction  by  appearance  was  also  urged. 
28  Winn,  In  re,  213  U.  S.  458,  53  L.  ed.  873,  29  Sup.  Ct.  515. 

27  Covington  Bridge  Co.  v.  Hager,  203  U.  S.  109,  51  L.  ed.  Ill,  27  Sup. 
Ct.  24. 

28  Knapp  v.  Lake  Shore  &  Michigan  Southern  Ry.  Co.,  197  U.  S.  536,  25 
Sup.  Ct.  538,  49  L.  ed.  870.  The  court,  per  Mr.  Justice  McKenna,  said: 
"Congress  has  undoubtedly  power  to  authorize  a  Circuit  Court  to  issue  a 
mandamus  in  an  original  proceeding.  Kendall  v.  United  States,  12  Pet. 
(37  U.  S.)  524,  9  L.  ed.  1181;  United  States  v.  Schurz,  102  U.  S.  378,  26  L. 
ed.  167.  But  has  Congress  done  so,  as  contended,  by  §§  12  and  20  of  the 
Interstate  Commerce  Act  as  amended?  Under  §  12  the  commission  is  given 
the  authority  to  inquire  into  the  management  of  the  business  of  common 

608 


ACTIONS    AT   LAW    CONTINUED — MANDAMUS  §  374 

in  mandamus  was  begun  in  a  Federal  Circuit  Court  by  a  bridge 
company  to  compel  the  auditor  of  public  accounts  for  a  State 
to  issue  his  warrant  on  the  State  Treasury  for  the  amount  of  a 
franchise  tax  collected  under  the  authority  of  the  State  statute, 
and  the  return  of  the  tax  was  asked  upon  the  ground  that  it 
levied  a  burden  on  the  interstate  commerce  business  of  the 
bridge  company  and  was  therefore  repugnant  to  the  Federal 
Constitution;  it  was  held  that  Circuit  Courts  of  the  United 
States,  until  Congress  shall  otherwise  provide,  have  no  power  to 
issue  a  writ  of  mandamus  in  an  original  action  for  the  purpose 

carriers  subject  to  the  act,  and  have  the  right  to  obtain  from  the  carriers 
full  and  complete  information  to  enable  it  to  perform  its  duties.  It  is  also 
authorized  to  enforce  the  provisions  of  the  act.  By  §  20,  the  commission 
may  require  annual  reports  and  fix  the  time  and  prescribe  the  manner  in 
which  such  reports  shall  be  made.  And  it  is  made  the  duty  of  any  district 
attorney  of  the  United  States,  to  whom  the  commission  may  apply,  to  in- 
stitute in  the  proper  court  and  to  prosecute  under  the  direction  of  the 
attorney-general  all  necessary  proceedings  for  the  enforcement  of  the  pro- 
visions of  this  act.  It  is  hence  contended  that  the  power  of  the  commission 
to  require  the  report  stated  in  the  petition  is  undoubted,  and  having  power 
to  order  the  report  to  be  made  the  commission  has  the  power  to  enforce 
obedience  to  the  order.  But  in  what  way?  Manifestly  only  in  such  way  as 
the  courts  have  jurisdiction  to  give.  All  powers  are  given  in  view  of  that 
jurisdiction,  and  the  amendments  of  the  Interstate  Commerce  Act  are  so 
framed.  Jurisdiction  to  issue  mandamus  is  conferred  by  §  6  to  enforce  the 
filing  or  publishing  by  a  common  carrier  of  its  schedules  or  tariffs  of  rates, 
fares  and  charges.  And  such  jurisdiction  is  also  given  to  the  Circuit  Courts 
and  District  Courts  upon  the  relation  of  any  person  or  persons,  firm  or 
corporation,  alleging  a  violation  of  any  of  the  provisions  of  the  act  which 
prevents  the  relator  from  having  interstate  traffic  moved  on  terms  as  favor- 
able as  any  other  shipper.  The  remedy  is  expressly  made  cumulative  of 
the  other  remedies  provided  by  the  act.  It  is  clear,  therefore,  when  Con- 
gress intended  to  give  the  power  to  i.ssue  mandamus  it  expressed  that  in- 
tention explicitly.  Such  power  cannot  be  inferred  from  the  grant  of  au- 
thority to  one  commission  to  enforce  the  act  or  from  the  direction  to  district 
attorneys  or  to  the  Attorney-General  to  institute  '  all  necessary  proceedings 
for  the  enforcement  of  the  provisions'  of  the  act  (§  12).  The  proceedings 
meant  are,  as  we  have  said,  those  within  the  jurisdiction  of  the  court.  And 
special  remedies  are  given.  For  instance,  by  §  16,  a  summary  proceeding 
in  equity  is  authorized,  and  the  form  of  the  ultimate  order  of  the  court  may 
be  that  of  a  '  writ  of  injunction  or  other  proper  process,  mandatory  or  other- 
wise.' Without  attempting  now  to  define  the  extent  of  that  section,  we 
may  say,  it  seems  adequate  to  enable  the  commission  to  enforce  any  order 
it  is  authorized  to  make." 

39  609 


§  374  ACTIONS    AT    LAW    CONTINUED — MANDAMUS 

of  securing  relief  by  the  writ,  although  the  relief  concerns 
an  alleged  right  secured  by  the  Constitution  of  the  United 
States.2o 

The  Supreme  Court  of  Wisconsin  will  take  original  jurisdic- 
tion of  the  writ  of  mandamus,  upon  the  mere  relation  of  a  pri- 
vate person,  in  the  name  of  the  State,  to  compel  the  Secretary 
of  State  to  revoke,  as  required  by  statutes,  a  State  license  to  a 
foreign  corporation  to  transact  business  forfeited  by  violation 
of  its  conditions.  The  jurisdiction  being  assumed  because  the 
subject-matter  of  the  writ  affects  the  prerogatives  of  the  State, 
and  not  being  founded  upon  the  pnvate  right  of  the  relator, 
a  subsequent  settlement  between  him  and  the  corporation, 
leaving  him  without  further  interest  in  the  application  is  im- 
material."^^ 

Under  a  New  York  decision  the  court  has  no  power  in  a  pro- 
ceeding by  mandamus  to  compel  a  railroad  company  to  restore 
a  highway  at  the  point  of  an  overhead  crossing  to  such  con- 
ditions as  will  not  impair  its  usefulness,  to  make  permanent 
an  encroachment  of  stone  abutments  upon  a  highway,  provided 
the  route  of  the  highway  is  changed  by  acquiring  additional 
land,  so  that  the  traveler  may  pass  in  safety  over  a  straight 
course  between  the  abutments,  where  their  construction  in  that 
manner  was  without  an  order  of  the  Supreme  Court,  as  required 
by  the  railroad  law,  and  was,  therefore,  illegal  ab  initio. ^^ 

Under  a  Nebraska  decision  where  unjust  discrimination  was 
alleged  against  a  railroad  company,  and  such  discrimination  was 
found  to  exist,  and  it  was  ordered  that  the  railroad  company 
reduce  its  rates  to  conform  to  a  schedule  presented  by  a  board 
of  commissioners,  and  the  railroad  company  neglected  to  com- 
ply with  the  order,  it  was  held  that  mandamus  was  a  proper 

29  Covington  &  Cincinnati  Bridge  Co.  v.  Hager,  203  U.  S.  109,  51  L.  ed. 
Ill,  27  Sup.  Ct.  24. 

30  State  ex  rel.  Drake  v.  Doyle,  40  Wis.  175,  22  Am.  St.  Rep.  692. 
Where  court  without  jurisdiction  to  compel  insurance  commissioner  to 

grant  license  to  society;  mandamus  denied  Court  of  Honor  of  111.,  In  re, 
109  Wis.  625,  85  N.  W.  497. 

31  People  ex  rel.  Bacon  v.  Northern  Central  Rd.  Co.,  164  N.  Y.  289,  58 
N.  E.  138,  modifying  54  N.  Y.  Supp.  1112:  Railroad  Law,  §  11. 

610 


ACTIONS    AT   LAW    CONTINUED — MANDAMUS       §§  375,  370 

remedy  to  enforce  said  order,  and  that  the  mention  of  the  Dis- 
trict Court  in  the  statute  did  not  i)reclude  brinsin^  tiie  action 
in  the  Supreme  Court  in  any  case  where  the  latter  court  had 
original  jurisdiction."''^ 

§  375.  Proper  or  Necessary  Parties,  Generally. 

The  officers  of  a  building  and  loan  association  having  the 
custody  of  its  books  and  papers  are  proper  parties  in  an  action 
in  mandamus  to  compel  the  association  to  permit  the  county 
assessor  to  examine  its  books  for  the  purpose  of  determining 
whether  any  of  the  stock  of  such  association  has  been  omitted 
from  taxation.^^  The  owner  and  lessor  of  a  railroad  is  not  a 
necessary  party  to  a  proceeding  by  a  mandamus  to  compel  the 
restoration  of  a  highway  under  the  railroad  law  of  1890  of 
New  York,  and  if  it  were,  where  the  defect  of  parties  appears 
upon  the  face  of  the  proceedings  and  defendant  fails  to  object 
thereto  by  demurrer  under  the  Code  of  New  York,^^  it  is 
waived.^^ 

§  376.  Parties  Plaintiff— Private  Persons. 

Private  persons  may,  without  the  intervention  of  the  gov- 
ernment law  officer,  move  for  a  mandamus  to  enforce  a  public 
duty  not  due  to  the  government  as  such.^*'  So  a  private  person, 
who  shows  a  direct  and  special  interest  in  himself,  may  apply  for 
a  writ  of  mandamus  to  enforce  a  public  duty,  though  the  public 
may  be  affected,  and  it  may  be  the  duty  of  the  commonwealth 
or  the  public,  through  its  officers,  to  act  in  the  matter.    But 

32  State  V.  Fremont,  Elkhorn  &  Missouri  Valley  R.  R.  Co.,  22  Neb.  313, 
23  Neb.  117,  68  N.  W.  1022. 

'■^  State  ex  rel.  Morgan,  Assessor,  v.  Real  Estate  Bldg.  &  Loan  Assoc,  151 
Ind.  502,  51  N.  E.  1061. 

34  N.  Y.  Code  Civ.  Proc,  §  2076. 

35  People  ex  rel.  Bacon  v.  Northern  Central  Rd.  Co.,  164  N.  Y.  289,  58 
N.  E.  138,  modifying  54  N.  Y.  Supp.  1112. 

36  Union  Pacific  Rd.  Co.  v.  Hall,  91  U.  S.  343,  23  L.  ed.  428  (duty  of  rail- 
road company  to  operate  and  run  its  whole  road,  including  a  bridge  over  the 
Missouri  River,  as  one  connected  and  continuous  Hne);  Richmond  Ry.  & 
Electric  Co.  v.  Brown,  97  Va.  26,  32  S.  E.  775,  1  Va.  S.  C.  Rep.  213.  See 
First  Nat.  Bank  v.  Lancaster,  54  Neb.  467,  74  N.  W.  858. 

611 


§  370  ACTIONS    AT    LAW    CONTINUED— .MANDAMUS 

the  direct  and  special  interest  of  a  private  individual  which 
entitles  him  to  apply  for  mandamus  to  enforce  his  private  right 
in  the  performance  of  a  public  duty  must  be  independent  of  and 
distinguishable  from  that  which  obtains  to  him  in  common  with 
the  general  public,  though  it  may  be  necessary  that  such  par- 
ticular interest  should  be  different  in  kind  from  that  of  the  gen- 
eral public  or  peculiar  to  the  individual  alone.^'' 

If  an  act  of  incorporation  merely  confers  vitality  and  corpo- 
rate existence  on  a  corporation,  and  the  terms  and  conditions 
on  which  it  is  to  exercise  its  corporate  powers  are  to  be  pre- 
scribed by  some  other  designated  authority,  then  such  terms 
and  conditions,  when  prescribed,  become  parts  of  the  organic 
law  of  the  corporation,  and  may  be  enforced  by  mandamus 
awarded  on  the  application  of  a  private  person  who  is  injured 
by  their  violation;  and  this  applies  where  the  defendant  is  en- 
titled to  a  free  transfer  which  he  claims  over  the  line  of  the  street 
railway  of  the  plaintiff.^*  A  party  must  have  a  personal  interest 
in  the  matter  in  order  to  enable  him  to  maintain  a  mandamus 
proceeding  to  compel  a  corporation  to  comply  with  a  statutory 
requirement  that  it  post  its  by-laws  in  its  principal  place  of 
business.^^  Again,  mandamus  will  lie  at  the_  instance  of  a  pri- 
vate citizen  in  the  name  of  the  people  of  the  State  to  compel  a 
lessee  railroad  company,  which  has  reconstructed  a  crossing 
in  such  manner  as  to  encroach  upon  a  highway,  to  perform  the 
public  duty  imposed  upon  it  by  the  railroad  law  of  New  York,^" 
of  restoring  the  highway  "to  its  former  state  or  to  such  state 
as  not  to  have  its  usefulness  impaired,"  and  the  proceeding  is 
entirely  independent  of  the  remedy  given  by  the  highway  law 
of  New  York  '^^  for  the  removal  of  encroachments  upon  a  high- 
way and  the  sections  thereof  ^  relating  to  notice  of,  and  direc- 

37  Louisville  Home  Telephone  Co.  v.  City  of  Louisville,  130  Kj-.  611,  113 
S.  W.  855. 

38  Richmond  Ry.  &  Electric  Co.  v.  Brown,  97  Va.  26,  1  Va.  S.  C.  Rep.  213, 
32  S.  E.  775. 

3»  Boardman  v.  Marshalltown  Grocery  Co.,  105  Iowa,  445,  75  N.  W.  343. 
40  N.  y.  Laws,  1890,  chap.  565,  §  11. 
*i  N.  Y.  Laws,  1890,  chap.  568. 
42  Sections  15  and  105. 

012 


ACTIONS    AT   LAW    CONTINUED — MANDAMUS  §  376 

tions  for,  their  removal  and  providing,  in  connection  with  the 
town  law  of  New  York  ^^  that  the  proceeding  must  be  brought 
in  the  name  of  the  town,  have  no  application.^'' 

So  a  private  party  has  such  an  interest  as  will  enable  him  to  be 
a  relator  in  mandamus  proceedings  to  compel  the  continued 
operation  of  a  street  railway  line  when  the  company  attempts 
to  discontiune  the  same,  where  he  resides  and  owns  property 
adjacent  to  such  line  and  has  incurred  expense  by  improve- 
ments made  in  reliance  upon  its  continuing  its  operation. ^•'^ 
And  mandamus  to  compel  a  city's  executive  board  to  advertise 
and  sell  a  telephone  franchise  as  directed  by  an  ordinance  pro- 
viding therefor  involves  the  enforcement  of  a  public  duty,  and 
a  private  individual,  who  is  a  citizen  and  a  resident,  engaged  in 
business  in  the  city,  and,  as  such,  interested  in  the  execution  of 
the  law,  is  a  proper  relator  to  institute  such  proceedings  for 
the  public,  when  the  city  attorney  or  other  representative  of 
the  commonwealth  fails  to  act  in  the  niatter.'"^  But  a  private 
citizen,  having  no  grievance  of  his  own,  but  claiming  to  act  in 
behalf  of  the  public,  is  not  entitled  to  a  peremptory  writ  of  man- 
damus requiring,  under  the  provisions  of  the  railroad  law,^' 
a  street  railroad  corporation,  operating  two  intersecting  lines 
of  railway  in  the  city  of  New  York,  to  carry  for  a  single  fare  of 
five  cents  any  passenger  desiring  to  make  a  continuous  trip 
from  any  point  on  one  line  to  any  other  point  on  the  other  line, 
and  to  give  to  such  passenger  at  the  intersection  of  such  lines, 
without  extra  charge,  a  transfer  entitling  him  to  make  such 
continuous  trip,  since,  even  if  it  be  true  that  the  railroad  com- 
pany is  violating  the  statute  in  question,  the  relator  has  shown 
no  legal  right  in  himself,  and  so  far  as  the  public  is  concerned, 
and  so  far  as  any  individual  may  acquire  such  a  right,  the  law 

43  N.  Y.  Laws,  1890,  chap.  569,  §  182. 

«  People  ex  rel.  Bacon  v.  Northern  Central  Rd.  Co.,  164  N.  Y.  289,  58 
N.  E.  138,  modifying  54  N.  Y.  Supp.  1112. 

40  State  ex  rel.  Grinsfelder  v.  Spokane  Street  R.  Co.,  19  Wash.  518,  41  L. 
R.  A.  515,  53  Pac.  719. 

■•a  Louisville  Home  Telephone  Co.  v.  City  of  Louisville,  130  Ky.  611,  113 
S.  W.  855. 

4?  N.  Y.  Laws,  1892,  chap.  676,  §  104. 

013 


§  377  ACTIONS    AT   LAW    CONTINUED— MANDAMUS 

gives  other  and  adequate  legal  remedies.'**  Again,  where  peti- 
tioner for  a  writ  of  mandate  is  a  resident  elector,  property 
owner  and  taxpayer  and  he  applies  for  such  writ  to  compel  the 
common  council  to  put  in  action  the  election  machinery  of  a 
city  for  the  purpose  of  passing  an  ordinance  by  a  direct  vote, 
under  its  charter,  confirming  the  granting  of  a  franchise  by  the 
harbor  commissioners  to  a  railway  corporation  to  erect  and 
maintain  a  wharf  and  pier  in  tide  lands  and  waters  of  a  bay, 
and  within  the  limits  of  the  city,  such  writ  will  be  denied  as  he 
is  not  ''the  party  beneficially  interested."  '^^  In  such  case  the 
railway  corporation  itself  is  the  only  party  to  whom  the  law 
could  imply  a  beneficial  interest,  and  it  did  not  appear  that  it 
had  ever  asked  for  a  confirming  ordinance  and  it  had  evidently 
abandoned  the  privileges  granted  by  the  harbor  commissioners. 
Again,  the  petitioner  was  not  only  not  beneficially  interested  in 
the  franchise  he  was  seeking  to  have  confirmed  by  ordinance,  but 
he  did  not  even  allege  that  he  was  one  of  the  petitioners  seeking 
to  accomplish  the  passage  of  the  ordinance  by  a  direct  vote.^" 

§  377.  Parties— Attorney-General. 

It  is  declared  in  a  Michigan  case  that  the  attorney-general  is 
not  a  "complainant."    He  does  not  petition.    He  "informs." 

48  People  exrel.  Lehmaier  v.  Interurban  Ry.  Co.,  177  N.  Y.  296,  69  N.  E. 
596,  dismissing  appeal,  83  N.  Y.  Supp.  622,  85  App.  Div.  407. 

49  Cal.  Code  Civ.  Proc,  §  1086. 

50  Webster  v.  Common  Council  of  City  of  San  Diego,  8  Cal.  Civ.  App.  480, 
97  Pac.  92.  The  court,  per  Taggart,  J.,  said:  "If  we  were  to  assume  that 
petitioner  here,  as  a  resident  elector  or  taxpayer,  is  a  competent  person  to 
ask  the  common  council  to  put  in  action  the  election  machinery  of  the  city 
for  the  purpose  of  passing  an  ordinance  by  a  direct  vote,  it  would  be  idle 
for  the  court  to  grant  his  petition  in  the  face  of  an  abandonment  of  the 
franchise  from  the  harbor  commissioners  by  the  grantee  of  the  franchise. 
This,  however,  is  not  a  case  in  which  the  taxpayer,  resident  or  elector,  as 
such,  can  be  said  to  be  a  party  beneficially  interested.  A  taxpayer  is  said  to  be 
so  interested  in  a  matter  which  affects,  or  may  aftect  directly,  his  assessment 
or  taxes  (Hyatt  v.  Allen,  54  Cal.  353).  *  *  *  Again,  as  a  property 
owner  he  is  beneficially  interested  in  the  disincorporation  of  a  municipality 
in  which  he  is  a  resident  elector  and  taxpayer  Frederick  v.  San  Lins 
Obispo,  118  Cal.  391  (50  Pac.  661).  The  reason  for  his  being  considered  a 
party  beneficially  interested  in  all  these  cases  is  clear,  and  it  is  equally  clear 
that  no  such  reason  exists  m  the  case  at  bar." 

614 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS  §  377 

His  intervention  is  purely  official.  He  undertakes  to  put  the 
court  in  possession  of  facts,  which,  when  communicated  in 
proper  form,  through  the  right  official  channel,  impose  upon  the 
court  determinate  duties.  He  does  not  take  the  attitude  or  hold 
the  language  of  an  ordinary  suitor.  Formerly,  if  the  suit  im- 
mediately concerned  the  right  of  the  State  only,  the  information 
was  commonly  exhibited  without  a  relator.  But  modern  prac- 
tice has  made  it  usual,  if  not  necessary,  to  name  a  relator  upon 
the  face  of  the  information,  in  order,  and  only  in  order,  to  sup- 
ply some  one  to  be  subject  to  costs.  But  the  suit  is  still  ex- 
clusively the  suit  of  the  official  agent  and  must  be  prosecuted  by 
his  sanction,  and  be  guided  and  controlled  by  his  judgment.^^ 
But  there  is  no  impropriety  in  naming  the  special  counsel  for 
the  railroad  commissioners,  along  with  the  attorney-general, 
as  relators  in  a  proceeding  by  mandamus  instituted  by  the 
attorney-general  and  special  counsel  in  compliance  with  the  spe- 
cial directions  of  the  commissioners,  to  compel  the  observance 
by  a  terminal  company  of  a  regulation  made  under  the  Consti- 
tution of  Florida ^^  by  the  commissioners.^^ 

Under  a  Pennsylvania  decision  while  a  State  statute  provides 
that  "two  reputable  citizens  resident  in  the  region  traversed  by 
the  line"  of  a  street  railway  company  have  a  standing  to  peti- 
tion the  court  for  a  mandamus  to  compel  the  attorney-general 
to  institute  proceedings  against  a  street  railway  company  to 
enforce  the  provisions  of  a  statute  prohibiting  with  the  Consti- 
tution the  issue  of  stock  except  for  certain  purposes,  still,  be- 
fore that  officer  will  be  subject  to  a  writ  of  mandamus  to  compel 
him  to  proceed  under  the  enactment,  he  has  a  right  to  know 
the  strength  of  the  case  he  is  asked  to  present  in  the  name  of 
the  State;  and  the  parties  asking  him  to  proceed  must  present 
for  his  consideration  facts  showing  a  'prima  facie  case.-'^'' 

51  Attorney-General  v.  Moliter,  26  Mich.  444,  449,  substantially  the  lan- 
guage of  Graves,  J.,  in  a  case  holding  that  where  the  attorney-genera!  has  a 
right  to  intervene  to  restrain  unauthorized  corporate  action,  the  regular 
course  is  for  him  to  proceed  by  information  rather  than  by  a  bill  in  equity. 

52  Chapter  4700,  Laws  of  1899. 

53  State  V.  Jacksonville  Terminal  Co.,  41  Fla  377,  27  So.  225. 

54  Cheatham  v.  McCormick,  178  Pa.  St.  186,  35  Atl.  631. 

615 


§  377  ACTIONS    AT    LAW    CONTINUED — MANDAMUS 

In  an  original  suit  in  a  Texas  court  a  mandamus  was  sought 
against  the  attorney-general  of  the  State  to  compel  him  to  pay 
over  certain  moneys  alleged  to  be  in  the  hands  of  the  respondent 
and  claimed  to  belong  to  the  relator,  a  district  attorney  who 
claimed  the  exclusive  right  to  institute;  in  behalf  of  the  State, 
all  suits  in  his  district;  it  was  alleged  that  certain  suits  had  been 
brought  in  said  district  by  the  attorney-general,  at  the  request 
of  the  railroad  commission,  to  recover  of  a  railroad  corporation 
penalties  incurred  by  it  for  refusal  to  permit  a  person  to  ex- 
amine books  and  papers,  and  also  against  another  railroad  cor- 
poration to  recover  penalties  for  unlawful  discrimination;  the 
prayer  was  for  the  payment  over  to  the  relator  of  said  moneys 
as  commissions  on  the  penalties  recovered  in  such  suits.  It  was 
held:  (1)  that  the  institution,  prosecution,  and  management  of 
all  suits  for  penalties  against  railroads  for  the  violation  of  pro- 
visions of  the  railroad  commission  law  are  committed  exclusively 
to  the  commission  and  to  the  attorney-general;  and  a  district 
or  county  attorney  has  no  authority  to  institute  a  suit  of  this 
class,  nor  to  appear  in  or  prosecute  it  except  by  request  of  the 
railroad  commission;  ^^  (2)  that  the  Constitution  of  the  State  ^^ 
did  not  confer  on  district  or  county  attorneys  the  right  to  rep- 
resent the  State  in  all  suits  in  the  District  Court;  and  the  amend- 
ment to  said  Constitution,^^  empowered  the  legislature  to  confer 
upon  the  agencies  created  by  it  powers  which  were,  before  the 
adoption  of  the  amendment,  vested  in  other  officers  by  the 
Constitution;  (3)  that  the  district  attorney  of  a  certain  county 
was  not  entitled  to  commissions  on  penalties  recovered  in  suits 
by  the  State,  prosecuted  by  the  attorney-general  under  direc- 
tion of  the  railroad  commission,  for  violation  of  its  regulations 
by  railroad  companies.^*  An  attorney-general  cannot  after  the 
expiration  of  his  term  of  office  order  the  dismissal  of  a  pending 

55  Section  2,  Art.  10,  Const.,  Amdt.  of  1890;  Rev.  Stat.,  Arts.  4568,  4569, 
4577. 
.  56  Section  21,  Art.  5. 

57  Section  2,  Art.  10. 

58  Moore  v.  Bell,  Attorney-General,  95  Texas,  151,  66  S.  W.  45.  Compare 
State  ex  rel.  Missouri  Pac.  Ry.  Co.  v.  Williams,  221  Mo.  227  (point  10  of 
case) . 

616 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS  §  378 

action  for  the  usurpation  of  a  franchise  by  a  street  railway  cor- 
poration, brought  by  him  while  in  office  upon  relation  of  an  in- 
dividual, nor  is  such  dismissal  aided  by  the  fact  that  before  said 
expiration  of  his  office  said  attorney-general  had  made  a  minute 
of  his  determination  to  dismiss  such  action.^" 

§  378.  Parties— Defendants. 

Officers  of  a  corporation  who  have  charge  of  its  records  and 
who  must  obey  the  writ,  if  issued,  are  proper  parties  defendant 
in  mandamus  to  compel  such  corporation  to  permit  an  inspec- 
tion of  its  books.^"  So  where  the  railroad  commissioners,  under 
the  power  conferred  on  them  by  the  Florida  Constitution,^^ 
have  made  a  regulation  requiring  a  terminal  company  corpo- 
ration to  admit  a  railroad  company  to  the  privileges  and  bene- 
fits of  its  common  passenger  station  or  terminal,  and  it  appears 
that  the  commissioners  had  power  to  make  the  regulation,^^ 
such  regulation  is  to  be  deemed  and  held  to  be  prima  facie 
reasonable  and  just,  and  a  writ  of  mandamus  to  compel  ob- 
servance of  said  regulation  is  properly  addressed  to  the  ter- 
minal company  where  the  duty  devolves  upon  it  as  a  corpora- 
tion, and  riot  upon  a  particular  officer  of  the  company.^^ 
Again,  where  the  incorporators  of  a  mutual  insurance  com- 
pany, pursuant  to  authority  lodged  in  them,  by  the  act  under 
which  the  company  is  organized,  to  fix  the  number  of  direct- 
ors and  the  manner  of  electing  them,  have  vested  the  power 
to  call  the  stockholders  together  for  election  purposes  ex- 
clusively in  the  board  of  directors,  the  president  and  secretary 
of  the  company  are  not  the  proper  respondents  in  mandamus 
proceedings  to  compel  the  reconvening  of  the  stockholders  for 
an  election  in  compliance  with  the  stockholders'  minority  law, 

59  People  V.  Sutter  Street  Ry.  Co.,  117  Cal.  604,  49  Pac.  736.  A  case  of  an 
information  by  the  attorney-general  to  obtain  a  judgment  to  have  a  fran- 
chise forfeited ;  quo  warranto  not  an  exclusive  remedy. 

60  State  ex  rel.  Morgan  v.  Real  Estate  Bldg.  &  L.  Fund  Assoc,  151  Ind. 
502,  51  N.  E.  1061. 

61  Section  6,  chap.  4700,  Laws,  1899. 

62  Section  8,  chap.  4700. 

63  State  V.  Jacksonville  Terminal  Co.,  41  Fla.  377,  27  So.  225. 

617 


§§  379,  380     ACTIONS  at  law  continued — mandamus 

after  an  election  in  which  the  rigiits  of  the  minority  under  such 
law  have  been  disregarded.^^ 

§  379.  Necessity  of  Demand  Upon  or  Notice  to  Party  Be- 
fore Bringing  Mandamus. 

An  express  demand  is  unnecessary  as  a  condition  precedent 
to  bringing  mandamus  to  compel  the  performance  of  a  duty  of 
a  public  nature  where  there  is  nothing  which  imposes  upon  any- 
one the  duty  of  making  such  demand.^^ 

The  Nebraska  statute  authorizing  issuance  of  a  peremptory 
mandamus  without  notice  has  reference  to  cases  in  which  the 
refusal  of  a  public  officer  to  discharge  an  official  duty  is  so 
obviously  inexcusable  and  the  necessity  for  prompt  action  so 
imperative,  that  notice  must  be  dispensed  with  in  order  to 
prevent  a  failure  of  justice.  But  while  it  is  competent  for  the 
legislature  to  authorize  courts  in  a  proper  case  to  coerce  official 
action  without  notice  and  an  opportunity  to  the  recalcitrant  to 
be  heard,  no  such  power  can  be  exerted  against  a  private  corpo- 
ration or  the  officers  by  which  its  functions  are  performed."" 

§  380.  Defenses  Available,  Generally. 

The  remedy  by  mandamus  to  compel  the  furnishing  of  tele- 
phonic service  is  not  taken  away  by  the  fact  that  a  penalty  is 
provided  for  noncompliance  with  a  statute  compelling  service 
without  discrimination."^  And  the  fact  that  a  railway  company 
based  its  refusal  of  a  shipper's  request  that  it  receive  the  cars 
of  a  connecting  road  for  transportation  over  its  line,  as  re- 

^  Dusenbury  v.  Looker,  110  Mich.  58,  3  Det.  L.  N.  289,  67  N.  W.  986, 
1  Am.  &  Eng.  Corp.  Cas.  (N.  S.)  602. 

«5  State  ex  rel.  Burnham  v.  Cornwall,  97  Wis.  565,  73  N.  W.  93. 

When  demand  sufficient  as  condition  precedent  to  bringing  mandamus, 
see  Santa  Rosa  Lighting  Co.  v.  Woodward,  119  Cal.  30,  50  Pac.  1025. 

Whal  is  a  sufficient  averment  of  a  demand,  see  People  ex  rel.  Attorney- 
General  V.  Reis,  76  Cal.  269,  18  Pac.  309.      ■ 

«6  Horton  v.  State,  60  Neb.  701,  84  N.  W.  87. 

Alternative  urrit  of  mandamus  may  be  granted  either  with  or  toithout  previous 
notice  of  the  application,  as  the  court  thinks  proper,  under  N.  Y.  Code  Civ. 
Proc,  §  2607. 

67  Central  Union  Teleph.  Co.  v.  State,  118  Ind.  144,  194,  206,  19  N.  E. 
604.    But  see  §  371,  herein. 

618 


ACTIONS    AT   LAW    CONTINUED — MANDAMUS  §  381 

quired  b}^  statute,^®  on  the  ground  that  it  did  not  want  to  do 
business  with  such  company,  does  not  prevent  it  from  relying 
upon  any  legal  excuse  it  had  for  its  refusal,  in  a  proceeding  by 
mandamus,  to  compel  it  to  receive  such  cars.^^  So  in  mandamus 
proceedings  by  a  contractor  against  a  municipal  corporation 
to  compel  the  payment  of  a  bond,  respondent  is  not  estopped 
to  show  that  said  bond  was  issued  in  reliance  upon  the  promise 
of  the  contractor  to  thereafter  complete  the  work  in  accordance 
with  the  contract,  and  that  it  had  not  done  so.'" 

§  381.  Pleadings — Sufficiency  of  Showing  Demurrer- 
Judgment  — Appeal . 

In  the  absence  of  statutory  provision  to  the  contrary,  the 
common-law  rules  of  pleading  govern  in  mandamus  proceed- 
ings.'''^ 

An  alternative  writ  of  mandamus  to  compel  the  observance 
of  a  regulation  made  by  the  railroad  commissioners  under  the 
powers  conferred  by  the  Florida  Constitution  '^  requiring  a  ter- 
minal company  to  admit  a  railroad  company  to  the  privileges 
and  benefits  of  its  common  passenger  station  or  terminal,  and 
fixing  rates  for  the  uses  and  privileges  of  such  terminal  to  be 
paid  by  such  railroad  company,  need  not  allege  any  fact  tend- 
ing to  show  that  the  rates  so  fixed  are  reasonable  and  just,  as 
such  regulation  is  under  the  statute  to  be  deemed  and  held  to 
be  'prima  fade  reasonable  and  just.^^ 

Under  a  Kentucky  decision  an  application  by  private  indi- 
viduals for  mandamus  to  compel  a  city's  executive  board  to 
advertise  and  sell  a  telephone  franchise  as  directed  b}-  an 

88  McClain's  Iowa  Code,  §  2039. 

69  Green  Bay  Lumber  Co.  v.  The  Chicago,  Rock  Island  &  Pacific  Ry.  Co., 
102  Iowa,  292,  72  N.  W.  406. 

70  Barber  Asphalt  Paving  Co.  v.  Village  of  Highland  Park,  156  Mich.  178, 
16  Det.  L.  N.  76,  120  N.  W.  621. 

71  McCoy  V.  State,  2  Marv.  (Del.)  54.3,  .36  Atl.  81;  Chicago  C.  W.  Rd. 
Cq.  v.  People,  179  111.  441,  .53  N.  E.  9S6,  aff'g  79  111.  App.  .529. 

See  New  York  Code  Civ.  Proc,  §  2076,  as  to  contents  of  alternative  writ 
of  mandamus. 

72  Chapter  4700,  Laws,  1899. 

73  State  v.  Jacksonville  Terminal  Co.,  41  Fla.  377,  27  So.  225. 

019 


§  381  ACTIONS    AT   LAW    CONTINUED — MANDAMUS 

ordinance  providing  therefor,  which  avers  that  the  apphcants 
are  taxpayers,  and  that  one  of  them,  who  owns  an  existing 
franchise,  expects  to  purchase  the  new  franchise,  without  any 
showing  as  to  how  their  property  or  other  legal  right,  or  the 
city's  property  or  revenue,  are  injured  by  the  refusal  to  sell  the 
franchise,  does  not  show  that  the  applicants  have  such  private 
right  as  entitled  them  to  the  writ.^^  If  a  relator  includes  greater 
relief  than  he  is  entitled  to  in  the  mandatory  clause  of  a  writ, 
it  renders  his  petition  and  writ  insufficient  as  against  a  de- 
murrer for  want  of  facts  or  a  motion  to  quash. ''^ 

In  a  Georgia  case  a  petition  for  a  mandamus  to  compel  the 
ordinary  of  a  county  to  issue  a  warrant  to  its  treasurer  in  favor 
of  a  contractor,  who  had  built  and  completed  a  courthouse  for 
the  county,  in  pursuance  of  a  written  contract  between  the 
ordinary  and  the  contractor,  and  to  deliver  such  warrant  to  the 
petitioner,  a  bank,  who  had  furnished  the  money  to  the  con- 
tractor for  the  erection  of  the  building,  under  a  contract  be- 
tween petitioner  and  the  contractor  that  the  latter  would  give 
orders  on  the  ordinary  for  the  delivery  to  the  petitioner  of 
warrants  issued  by  the  ordinary  for  amounts  due  the  contractor, 
was  held  subject  to  the  ground  of  a  demurrer  that  set  up  that 
it  did  not  appear  from  the  petition  that  either  the  contract  be- 
tween the  ordinary  and  the  contractor,  or  the  written  order 
given  by  the  latter  to  the  petitioner  on  the  ordinary  for  the 
warrants,  and  accepted  in  writing  by  the  ordinary,  was  entered 
on  the  minutes  of  the  ordinary,  although  it  did  appear  that  the 
contractor  had  fully  performed  his  contract  and  that  the  build- 
ing had  been  accepted  by  the  ordinary  and  used  ever  since  by 
the  county,  and  that  a  fund  for  the  payment  of  the  cost  of  the 
erection  of  the  courthouse  had  been  levied  and  collected  by  tax- 
ation, and  a  sufficiency  thereof  to  pay  the  warrant  was  in  the 
county  treasury.'^ 

The  issue  of  the  necessity  of  opening  additional  culverts  on  a 

74  Louisville  Home  Telephone  Co.  v.  City  of  Louisville,  L30  Ky.  611,  113 
S.  W.  855. 

75  State  ex  rel.  v.  Connersville  Nat.  Gas  Co.,  163  Ind.  563,  71  N.  E.  483. 
7«  Jones  v.  Bank  of  Gumming,  131  Ga.  191,  63  S.  E.  36. 

620 


ACTIONS    AT    LAW    CONTINUED — MANDAMUS  §  381 

motion  for  a  peremptory  mandamus  to  compel  a  railroad  com- 
pan}^  to  restore  certain  culverts  in  its  embankment,  which  the 
relator  claims  are  indispensable  to  the  usefulness  of  his  land,  is 
tendered  by  positive  allegations  in  defendant's  papers  that  no 
more  than  the  existing  culverts  are  necessary  to  the  proper 
operation  and  management  of  the  business  for  which  the  prem- 
ises are  used.  Thus  the  perpetual  maintenance  by  the  Hudson 
River  Railroad  Company  of  the  culverts  deemed  necessary  when 
its  embankment  was  constructed  to  give  the  owner  of  the  land 
intersected  by  it  the  means  of  access  to  the  Hudson  River  front 
is  not  required  by  the  provision  of  the  New  York  Code  "  that 
the  company  shall  in  such  cases  construct  and  sustain  "con- 
venient passes  or  roads  across  or  under  the  railroad,"  for  the 
purpose  of  giving  the  usual  access  to  the  river  in  farming  or 
managing  the  land,  but  only  such  culverts  need  be  maintained 
as  will  serve  to  meet  the  existing  necessities  and,  therefore, 
the  issuance  of  a  peremptory  mandamus  commanding  their 
restoration  is  reversible  errorJ* 

The  fact  that  a  mandamus  to  compel  a  railroad  company  to 
extend  its  road  to  a  terminus  designated  in  its  charter  is  re- 
fused because  of  the  inability  of  the  court  to  enforce  its  order, 
owing  to  the  fact  that  the  affairs  of  the  company  are  in  the 
hands  of  a  receiver  of  the  Federal  Court,  does  not  affect  the 
question  of  the  duty  of  the  company  to  so  extend  its  line.  An 
order  refusing  a  writ  of  mandamus  is  not  such  a  judgment  as 
concludes  further  inquiry  as  to  the  grounds  upon  which  the 
writ  is  sought.  A  mandamus  refused  on  one  day  may  be 
granted  on  another  if  the  ends  of  justice  require  it.'''^ 

In  New  York  there  is  n  appeal  from  an  order  of  the  special 
term  denying  a  peremptory  writ  of  mandamus  but  granting 
the  alternative  writ.^" 

"  Section  16,  chap.  216,  Laws,  1846. 

78  People  ex  rel.  Frost  v.  New  York  Cent.  &  Hudson  R.  R.  Co.,  168  N.  Y. 
187,  61  N.  E.  172,  rev'g  70  N.  Y.  Supp.  684,  61  App.  Div.  404. 

79  Winchester  &  Strasburg  Rd.  Co.  v.  Commonwealth,  106  Va.  2(i4,  '^5 
S.  E.  692. 

«o  People  ex  rel.  Mt.  Vernon  Trust  Co.  v.  Millard,  127  .\pp.  Div.  77.  The 
court,  per  Jenks,  J.,  said:  "We  think  that  the  appeal  should  be  dismissed. 

621 


§  381  ACTIONS    AT    LAW    CONTINUED— MANDAMUS 

In  People  ex  rel.  Ackerman  v.  Lumb,  6  App.  Div.  26,  the  relator  moved  for 
a  peremptory  writ,  but  the  special  term  granted  an  alternative  writ,  and  the 
respondents  appealed.  We  held  that  the  order  was  not  appealable  inas- 
much as  it  was  in  the  nature  of  an  order  to  show  cause,  and  did  not  affect  a 
substantial  right.  See,  too,  People  ex  rel.  Levenson  v.  O'Donnel,  99  App. 
Div.  253,  90  N.  Y.  Supp.  961,  and  cases  cited;  Merrill  on  Mandamus, 
§  306;  Baylies  N.  T.  &  App.  (2d  ed.)  107.  Merrill  on  Mandamus  (supra)  says: 
'  When  the  court  upon  the  hearing  of  the  application  decides  that,  upon  the 
allegations  made,  the  relator  is  not  entitled  to  a  writ  of  mandamus,  and  re- 
fuses to  grant  either  a  motion  to  show  cause  or  an  alternative  writ,  the 
prevailing  opinion  in  America  is,  that  such  action  is  a  final  judgment,  from 
which  an  appeal  or  a  writ  of  error  may  be  taken  to  the  appellate  court.'  " 


622 


ACTlONa   AT   LAW   CONTINUED— QUO   WARRANTO       §  382 


CHAPTER  XXTI 

ACTIONS   AT   LAW   CONTINUED — QUO    WARRANTO 

§  382.  Nature  of  Quo  Warranto.  and  Leave  Corporation  In- 

383.  When  Quo  Warranto  Not  Ex-  tact. 

elusive    Remedy  —  When    §  388.  Quo     Warranto     to     Control 
Proper  Remedy.  Rates  and  Charges. 

384.  When    Special    or    Statutory       389.  Jurisdiction  of  Quo  Warranto 

Actions  or  Proceedings  Ex-  Proceedings. 

elusive.  390.  Parties  —  State  —  Attorney- 

385.  Quo  Warranto  Lies  in  Case  of  General. 

Unlawful  Exercise  of  Cor-  391.  Parties— Plaintiffs  —  Defend- 

porate     Power     or     Fran-  ants— Joinder. 

chises.  392    Seeking  Other  Relief  as  Con- 

386.  Quo   WarraiUo   to  Forfeit  or  dition  Precedent  to  Grant- 

Annul   or  Test   Franchises  ing  Quo  Warranto. 

of    Corporation— Ouster.  393.  Pleadings    —    Sufficiency    of 

387.  Qu/)     Warranto     to     Forfeit  Showing. 

Only     Misused     Franchise       394.  Defenses  Available,  Generally. 

§  382.  Nature  of  Quo  Warranto.^ 

The  remedy  by  information  in  the  nature  of  quo  warranto, 
though  criminal  in  form,  is  in  effect  a  civil  proceeding.^  80, 
under  the  Ilhnois  statute,  it  is  a  civil  action.^  And  a  statute 
abolishing  the  common-law  proceeding  by  information  in  the 
nature  of  quo  warranto,  and  authorizing  an  action  to  be  brought 
in  cases  in  which  that  remedy  was  applicable,''  makes  the  pro- 
ceeding a  civil  action  for  the  enforcement  of  a  civil  right,  subject 
to  removal  from  State  Courts  to  the  Federal  Courts  when  other 
circumstances  permit.  And  proceedings  by  a  State  against  a 
corporation  created  under  its  own  laws,  in  the  nature  of  quo 
warranto  for  the  abandonment,  relinquishment  and  surrender  of 

1  See  §  384,  herein. 

2  Ames  V.  Kansas,  111  U.  S.  449,  28  L.  ed.  482,  4  Sup.  Ct.  437. 

3  People  ex  rel.  Lord  v.  Bruennemer,  1G8  III.  482,  48  N.  E.  43. 
<  See  §  384,  herein. 

623 


§  383       ACTIONS   AT    LAW   CONTINUED — QUO   WARRANTO 

its  powers  to  another  corporation  with  whom  it  has  been  consol- 
idated under  a  law  of  the  United  States,  and  proceedings  against 
the  directors  of  said  consolidated  company  for  usurping  the 
powers  of  such  State  corporation  are,  when  in  the  form  of  a  civil 
action,  suits  arising  under  the  laws  of  the  United  States,  within 
the  meaning  of  the  acts  regulating  the  removal  of  causes.^ 

Under  the  Utah  Constitution  an  information  in  the  nature 
of  quo  warranto  rather  than  the  ancient  writ  is  intended  by  the 
writ  of  quo  warranto  concerning  which  the  Supreme  Court  is 
therein  given  jurisdiction.^ 

Under  the  Minnesota  Constitution  such  proceedings  are 
within  what  are  therein  denominated  remedial  cases  and  are 
not  cases  at  law  within  that  instruments  Under  the  common 
law  an  information  in  the  nature  of  quo  loarranto  will  lie  only 
for  usurping  a  public  office,  and  is  never  exercised  in  the  case  of 
a  mere  agency  or  employment  determinable  at  the  will  of  the 
employer.  Quo  warranto  will  not  lie  to  determine  conflicting 
claims  of  appointment  to  a  position  as  superintendent  of  a 
mining  company.* 

Quo  warranto  is  not  a  remedy  to  determine  disputes  between 
private  persons  and  a  corporation,  or  between  corporations, 
but  is  to  determine  by  what  right  a  corporation  exercises  wrong- 
fully or  illegally  a  certain  franchise,  or  to  oust  it  from  the  right 
to  be  a  corporation,  for  an  abuse  or  nonuser  of  franchises 
granted,  or  for  some  violation  of  its  charter.^ 

§  383.  When  Quo  Warranto  Not  Exclusive  Remedy — 
When  Proper  Remedy. 

A  special  grant  to  courts  by  the  State  Constitution  of  power 
to  issue  writs  of  quo  warranto  does  not  make  such  grant  of  juris- 
diction exclusive  of  a  proceeding  by  regular  action  to  have  a 

5  Ames  V.  Kansas,  111  U.  S.  449,  28  L.  ed.  482,  4  Sup.  Ct.  437. 

6  State  V.  Elliott,  1.3  Utah,  200,  44  Pac.  248. 

7  State  ex  rel.  Clapp  v.  Minnesota  Thresher  Mfg.  Co.,  40  Minn.  21.3,  3  L. 
R.  A.  510,  41  N.  W.  1020. 

8  State  V.  Cronan,  23  Nev.  437,  49  Pac.  41. 

9  State  ex  inf.  v.  Atchison,  Topeka  &  Santa  Fe  Ry.  Co.,  176  Mo.  687,  711, 
75  S.  W.  776,  63  L.  R.  A.  761. 

624 


ACTIONS   AT    LAW   CONTINUED — QUO   WARRANTO       §  383 

franchise  of  a  corporation  forfeited  for  nonuscr.^"  So  the  legal 
organization  of  a  corporation  can  be  tested  by  such  an  informa- 
tion or  by  scire  facias}'^  An  information  in  the  nature  of  quo 
warranto,  and  not  a  bill  for  injunction,  is  the  appropriate  rem- 
edy where  the  legal  existence  of  a  corporation  is  to  be  tested.'^ 
And  although  a  bill  in  equity  would  lie  to  restrain  a  corporation 
organized  for  charitable  purposes  under  a  statute/^  from  con- 
ducting a  hospital  and  sanitarium  for  profit,  the  remedy  by 
quo  warranto  is  also  appropriate,  both  remedies  being  provided 
by  the  statute.^^  So  an  adjudication  of  ouster,  involving  a 
deprivation  of  all  capacity  to  administer  the  trust  reposed  in 
defendant,  is  not  the  only  relief  grantable  in  these  proceedings, 
but  defendant  may  be  prevented  by  a  proper  order  from  exer- 
cising any  franchises  or  privileges  not  conferred  upon  it  by  law.^^ 
Upon  a  bill  between  corporations  to  restrain  the  defendant 
from  unwarrantably  interfering  with  the  rights,  privileges  and 
property  of  the  complainant,  upon  charges  preferred  by  each 
against  the  other,  the  successive  steps  in  the  organization  of 
each  will  not  be  investigated  for  the  purpose  of  determining 
whether  the  corporations  legally  exist.  Such  charges  may  be 
more  properly  investigated  in  a  proceeding  by  quo  warranto}^ 
If  certain  persons  assume  to  act  as  lawfully  elected  directors 
the  validity  of  their  claimed  election  as  such  may  be  tested  by 
a  proceeding  in  the  nature  of  quo  warranto  and  not  by  injunc- 
tion.^^ On  the  other  hand,  directors  have  the  same  remedy 
when  duly  elected  to  compel  their  recognition.^^ 

10  People  V.  Sutter  Street  Ry.  Co.,  117  Cal.  604,  611,  49  Pac.  736. 

11  Lincoln  Park  Chapter  No.  177,  R.  A.  M.  v.  Swatek,  105  111.  App.  604, 
aff'd  in  68  N.  E.  429. 

12  Osborn  v.  Oakland,  49  Neb.  340,  68  N.  W.  506. 

13  Act  No.  242,  Laws  of  Mich.,  1863. 

14  3  Comp.  Laws  of  Mich.,  §§  9755,  9950. 

15  People  V.  Michigan  Sanitarium  &  Benevolent  Ass'n,  151  Mich.  452,  15 
Det.  L.  N.  24,  115  N.  W.  423. 

16  Denver  &  S.  Ry.  Co.  v.  Denver  City  Ry.  Co.,  2  Colo.  673. 

i7Carmel  Natural  Gas  &  I.  Co.  v.  Small,  150  Ind.  427,  47  N.  E.  11,  50 
N.  E.  476. 

18  Attorney-General  v.  Looker,  111  Mich.  498,  4  Det.  L.  N.  745,  69  N.  W. 
929. 

40  025 


§§  384,  385    ACTIONS  at  law  continued— quo  warranto 

§  384.  When  Special  or  Statutory  Actions  or  Proceedings 
Exclusive. 

Neither  the  ancient  writ  of  quo  warranto  nor  the  information 
in  the  nature  thereof  was  ever  in  force  in  the  State  of  Tennes- 
see.^'* In  that  State  the  Code^"  relating  to  "special  actions 
and  proceedings"  provides  for  "proceedings  in  the  name  of  the 
State  against  corporations,  and  to  prevent  usurpation  of  office," 
and  a  bill  to  oust  a  foreign  corporation  from  the  State  and  to 
obtain  a  perpetual  injunction  against  its  doing  business  in  the 
State  is  the  same  that  applies  to  all  domestic  corporations  and 
to  all  foreign  corporations,  within  the  borders  of  that  State, 
and  there  is  no  other  process  of  law  known  to  the  practice  of 
said  State  by  which  such  a  litigation  can  be  inaugurated  or 
conducted.  It  is  a  purely  civil  proceeding,  and  judgments 
eventuating  thereunder,  to  the  effect  that  corporation  or  corpo- 
rations dependent  thereto  shall  forfeit  their  charters  or  be 
ousted  from  the  State,  as  the  case  may  be,  are  civil  judgments 
and  not  criminal  sentences.^^ 

Again,  in  New  York  the  writ  of  quo  warranto  and  proceedings 
in  the  nature  of  quo  warranto  were  abolished  by  the  Code  in 
that  State,  and  the  relief  formerly  obtained  by  means  of  such 
writ  or  proceeding  is  obtained  by  appropriate  action  therefor 
by  and  in  the  name  of  the  people.^^ 

§  385.  Quo  Warranto  Lies  in  Case  of  Unlawful  Exercise 
of  Corporate  Power  or  Franchises.^'^ 

Quo  warranto  is  the  proper  remedy  in  case  of  an  unlawful 

19  State  V.  Standard  Oil  Co.  of  Ky.,  120  Tenn.  86,  134,  110  S.  W.  565. 

20  Shannon's  Code,  §§  5165-5187;  Code  of  1858,  §§  3409-3431.  • 

21  State  V.  Standard  Oil  Co.  of  Ky.,  120  Tenn.  86,  134,  110  S.  W.  565. 

22  N.  Y.  Code  Civ.  Proc,  §§  1983  et  seq.  See  Herring  v.  New  York, 
Lake  Erie  &  W.  Rd.  Co.,  105  N.  Y.  340;  People  v.  Hall,  80  N.  Y.  117. 

As  to  like  statutory  provisions  as  New  York,  see  Wishek  v.  Becker,  10 
N.  Dak.  63,  84  N.  W.  590;  State  v.  Portage  City  Water  Co.,  107  Wis.  441, 
83  N.  W.  697. 

When  statutory  remedy  exclusive,  see  State  ex  inf.  Crow  v.  .\tchison,  To- 
peka  &  Santa  Fe  Ry.  Co.,  176  Mo.  687,  73  S.  W.  776;  Rev.  Stat.,  1899, 
chap.  12,  Arts.  2,  4. 

23  See  §  383,  herein. 

626 


ACTIONS   AT    LAW   CONTINUED — CilJO   WARRANTO       §  38G 

assumption  of  the  power  to  exercise  a  franchise.^'*  So  an  in- 
formation in  the  nature  of  quo  warranto  lies  against  a  corpora- 
tion for  the  unlawful  exercise  or  usurpation  of  privileges 
whereby  the  rights  of  others  are  injured,  encroached  upon,  or 
put  to  hazard.^^  An  information  in  the  nature  of  quo  warranto 
also  lies  against  an  incorporated  company  for  carrying  on  bank- 
ing operations  without  authority  from  the  legislature.^*^  And 
where  a  railroad  corporation  claims  certain  rights  or  privileges 
in  lands  of  the  State  such  right  may  be  contested  by  quo  war- 
ranto.^'^  If  a  corporation  exercises  a  right  to  use  the  streets  of 
a  municipality  for  gas  pipes  for  lighting  it  is  a  person  and  is 
exercising  a  public  franchise  within  the  meaning  of  a  statute 
prohibiting  the  unlawful  exercise  by  any  j^erson  of  any  public 
franchise  and  authorizing  the  bringing  of  quo  warranto  in  such 
case.^* 

§  386.  Quo  Warranto  to  Forfeit  or  Annul  or  Test  Fran- 
chises of  Corporation — Ouster. 

Quo  warranto  is  the  proper  remedy  to  obtain  the  forfeiture 
of  a  corporation's  franchise.^''  And  that  writ  or  an  action  in  the 
nature  of  quo  warranto  is  the  proper  remedy  at  the  suit  of  the 
State  to  test  the  right  of  a  corporation  to  exercise  its  franchises 
or  to  declare  them  forfeited.^"    So  quo  warranto  lies  to  forfeit 

2*  State  V.  City  of  Topeka,  30  Kan.  653,  2  Pac.  587. 

25  Hartnett  v.  Plumbers'  Supply  Assoc,  160  Mass.  229,  47  N.  E.  1002,  38 
L.  R.  A.  194. 

26  People  V.  Utica  Ins.  Co.,  15  Johns.  (N.  Y.)  357,  8  Am.  Dec.  243. 

27  State  ex  rel.  Richards  v.  Pittsburg,  Chicago,  Cincinnati  &  St.  Louis  Rd. 
Co.,  52  Ohio  St.  1,  34  Ohio  L.  J.  15,  41  N.  E.  205. 

28  State  V.  Seattle  Gas  &  Electric  Co.,  28  Wash.  488,  68  Pac.  946,  70  Pac. 
114;  Ballinger's  Annot.  Codes  &  Stat.,  §  5780,  subd.  1. 

28  People  V.  Chicago  Telephone  Co.,  220  111.  238,  77  N.  E.  245. 

The  ancient  writ  of  quo  ivarranto  is  the  proper  remedy  to  seize  into  the 
hands  of  the  State  the  franchises  of  a  corporation  which  has  forfeited  them 
by  misusers  or  nonuser.  State  v.  Real  Estate  Bank,  5  Ark.  (5  Pike)  595, 
41  Am.  Dec.  509. 

Tfiat  State  has  power  to  forfeit  charter  for  abme  of  corporate  privileges,  see 
New  Orleans  Water  Works  Co.  v.  Louisiana,  185  U.  S.  336,  46  L.  ed.  936,  22 
Sup.  Ct.  691. 

30Ripstein  v.  Haynes  Medina  Valley  Ry.  Co.  (Tex.  Civ.  App.),  85  S.  W. 
314;  Sayles,  Ann.  Civ.  Stat.,  1897,  Art.  5243?:. 

027 


§  '.]S{)       ACTIONS   AT    LAW   CONTINUED — QUO   AVARRANTO 

a  corporate  franchise,  or  the  right  to  exercise  the  same  by  occu- 
pation of  a  city's  streets  under  an  ordinance.^^ 

Under  a  Wisconsin  decision,  the  only  remedy  whereby  the 
vahdity  of  a  grant  to  a  water  company  of  the  right  to  fur- 
nish the  granting  city  with  water  can  be  tested  is  quo  war- 
ranto for  usurpation  of  such  franchise.^^  And  a  right  granted 
by  ordinance  to  a  corporation  to  operate  an  interurban  railway 
upon  the  streets  of  a  city  is  a  "franchise"  within  the  meaning 
of  the  word  as  used  in  the  statute  relating  to  quo  warranto, 
and  for  proper  cause  may  be  annulled  in  an  action  of  that 
character.^^  Again,  that  writ  lies  to  oust  a  foreign  corpora- 
tion from  unlawfully  exercising  rights,  privileges  and  fran- 
chises.^ 

Quo  warranto  may  also  be  maintained  and  a  judgment  of 
ouster  properly  rendered  against  a  water  company  which  ren- 
ders its  water  impure  by  pumping  water  into  its  mains  from  a 
mill  pond  which  received  tho  seepage  of  a  town  and  with  which 
it  had  a  pipe  connection.^^ 

But  quo  warranto  will  not  lie  against  a  railroad  corporation 
to  oust  it  from  the  exercise  of  certain  rights,  privileges  and  fran- 
chises alleged  to  be  illegally  exercised  by  it;  as  in  the  case  of  a 
violation  of  an  alleged  custom  of  gratuitously  performing  cer- 
tain services  affecting  grain  dealers  for  which  a  right  to  make 
a  particular  charge  on  grain,  called  a  reconsignment  charge, 
made  for  such  services,  after  the  grain  has  been  delivered  on 
certain  of  its  tracks,  in  transferring  the  grain  to  other  railroads. 
No  legal  right  can  be  predicated  on  an  alleged  custom  for 

31  People  V.  Chicago  Telephone  Co.,  220  111.  238,  77  N.  E.  245. 

32  Ashland  v.  Wheeler,  88  Wis.  607,  60  N.  W.  818. 

When  suit  in  nature  of  quo  warranto  does  not  lie  for  usurpation  of  franchises, 
see  Haupt  v.  Rogers,  170  Mass.  71,  48  N.  E.  1080. 

33  Olathe,  City  of,  v.  Missouri  &  Kansas  Interurban  Ry.  Co.,  78  Kans.  19.3, 
96  Pac.  42. 

3*  State  ex  rel.  Atty.  Gen'l  v.  Fidelity  &  C.  Ins.  Co.,  49  Ohio  St.  440,  31 
N.  E.  655,  16  L.  R.  A.  611,  28  Ohio  L.  J.  26,  20  Wash.  L.  Rep.  485,  21  Ins. 
L.  J.  678.  See  State  ex  rel.  PhilUps  v.  Fidelity  &  C.  Co.,  77  Iowa,  648;  State 
V.  Boston,  C.  &  M.  Rd.  Co.,  25  Vt.  433. 

35  Commonwealth  v.  Potter  County  Water  Co.,  212  Pa.  463,  61  Atl. 
1099. 

628 


ACTIONS   AT   LAW   CONTINUED — QUO   WARRANTO      §§  387,  388 

gratuitous  service.-''^  Whether  a  corporation  has  forfeited  its 
charter  by  nonuser  and  misuser  under  the  law  of  a  State  does 
not  involve  a  Federal  question,  and  a  proceeding  regularly 
brought  by  the  attorney-general  in  the  nature  of  quo  warranto 
constitutes  due  process  of  law.^^ 

§  387.  Quo  Warranto  to  Forfeit  Only  Misused  Franchise 
and  Leave  Corporation  Intact. 

According  to  the  common  law  of  most  of  the  States,  if  the 
franchises  of  a  corporation  are  not  dependent  upon  each  other, 
it  is  competent  for  the  court  in  the  exercise  of  its  discretion 
upon  quo  warranto  proceedings  to  decree  a  forfeiture  of  the  mis- 
used franchise  and  leave  the  corporation  intact.^* 

§  388.  Quo  Warranto  to  Control  Rates  and  Charges. 

A  corporation  may  be  proceeded  against,  for  taking  illegal 
rates,  by  quo  warranto?^  That  writ  is  also  the  proper  remedy 
against  a  railroad  corporation  where  it  charges  excessive  fares 
in  comparison  with  those  charged  by  other  companies  originally 

30  state  ex  inf.  v.  Atchison,  Topeka  &  Santa  Fe  Ry.  Co.,  176  Mo.  687,  712, 
75  S.  W.  776,  63  L.  R.  A.  761. 

37  Delmar  Jockey  Club  v.  Missouri,  210  U.  S.  324,  52  L.  ed.  1080,  28  Sup. 
Ct.  732. 

38  State  V.  Boston  &  Maine  Rd.  Co.  (N.  H.,  1909),  74  Atl.  542,  549,  per 
Bingham,  J.  (in  a  case  of  an  information  in  equity  by  the  Attorney-General 
to  restrain  defendants  from  demanding  excessive  rates),  citing  State  v. 
Barron,  57  N.  H.  498;  Id.,  58  N.  H.  370;  State  v.  Bridge  Co.,  85  Me.  17,  33, 
26  Atl.  947;  State  v.  Canal  Co.,  23  Ohio  St.  121;  State  v.  Association,  35 
Ohio  St.  258,  264;  State  v.  Association,  42  Ohio  St.  579,  584;  State  v.  Gas 
Co.,  153  Ind.  483,  491,  53  N.  E.  1089,  53  L.  R.  A.  413,  74  Am.  St.  Rep.  314; 
Marion  Bond  Co.  v.  Rubber  Co.,  160  Ind.  558,  561,  65  N.  E.  748;  State  v. 
Railway,  36  Minn.  246,  30  N.  W.  816. 

39  New  Orleans  Water  Works  Co.  v.  Louisiana,  185  U.  S.  336,  349,  46  L. 
ed.  936,  22  Sup.  Ct.  691.  The  court,  per  Mr.  Justice  Peckham,  said:  "That 
the  State  has  power  to  forfeit  the  charter  of  a  corporation  for  an  abuse  of 
its  privileges  is  recognized  as  the  law  of  Louisiana.  The  Civil  Code  of  that 
State,  Article  447,  has  for  many  years  authorized  a  proceeding  in  the  nature 
of  a  quo  warranto  to  forfeit  the  charter  for  misuse,  and  it  has  been  held  that 
such  article  applies  to  every  charter  granted  since  its  adoption.  Atchafalaya 
Bank  v.  Dawson,  13  La.  R.  497;  State  of  Louisiana  v.  New  Orleans  Gas 
Light  &  Banking  Company,  2  Rob.  (La.)  529,  532." 

629 


§  889       ACTIONS   AT    LAW    CONTINUED — QUO   WARRAxNTO 

in  possession  of  roads  which  it  has  acquired  under  the  statute 
by  lease  or  purchase.^" 

§  389.  Jurisdiction  of  Quo  Warranto  Proceedings. 

In  Utah  the  proceeding  in  the  nature  of  quo  warranto  rather 
than  the  ancient  writ  of  quo  warranto  is  intended  by  that  pro- 
vision of  its  Constitution  under  which  the  jurisdiction  of  the 
Supreme  Court  is  derived.'*^ 

In  Missouri  the  writ  hes  from  the  Supreme  Court  to  an  in- 
ferior court  when  the  latter  refuses  to  perform  some  act  over 
which  under  the  law  it  has  jurisdiction  and  which  it  is  required 
to  perform,  and  the  relator  has  a  clear  legal  right  to  have  such 
inferior  court  exercise  its  jurisdiction,  and  has  no  other  adequate 
remedy  therefor.'*^  The  Constitution  of  that  State  in  giving 
the  Supreme  Court  power  to  issue,  hear  and  determine  "writs 
of  quo  warranto/'  included  proceedings  on  information  in  the 
nature  of  a  quo  warranto,  and  thereby  gave  the  said  court  juris- 
diction to  hear  and  determine  such  civil  proceedings.^^ 

Again,  the  laws  of  the  State  of  Missouri  authorize  and  direct 
the  attorney-general  to  institute  civil  proceedings  in  the  Su- 
preme Court  by  information  in  the  nature  of  quo  warranto 
against  any  corporation  to  annul  its  charter  and  forfeit  its  fran- 
chises whenever  it  has  by  misuser,  nonuser  or  usurpation  of 
powers,  so  conducted  itself  as  to  violate  the  laws  of  its  being, 
the  antitrust  statutes  or  the  criminal  laws  of  the  State;  and 
the  Supreme  Court  has  jurisdiction  to  hear  and  determine  such 
civil  proceedings,  nor  can  the  Supreme  Court  be  ousted  of  its 
jurisdiction  by  the  fact  that  the  corporation's  conduct  is 
violative  of  the  criminal  laws  of  the  State,  nor  can  the  corpo- 
ration justify  or  defend  upon  any  such  plea.  The  court  has  no 
original  jurisdiction  over  a  proceeding  that  is  essentially  a 
criminal  prosecution,  but  the  proceeding  upon  information  in 

40  State  V.  Toledo  Railway  &  Light  Co.,  23  Ohio  Cir.  Ct.  Rep.  603. 

«  State  V.  Elliott,  13  Utah,  200,  44  Pac.  248. 

«  State  ex  rel.  Union  Electric  Light  &  Power  Co.  v.  Grimm,  220  Mo.  483, 
489. 

43  Syllabus  in  State  v.  Standard  Oil  Co.,  218  Mo.  1,  116  S.  W.  902.  See 
Walker  v.  Equitable  Loan  &  Inv.  Assoc,  142  Mo.  .325,  41  S.  W.  916. 

63(> 


ACTIONS    AT    LAW    CONTINUED — QUO    WARRANTO        §  390 

the  nature  of  a  quo  warranto  to  oust  the  company  of  its  fran- 
chises for  a  violation  of  the  antitrust  statutes,  and  to  impose 
penalties  on  it  if  it  is  found  guilty,  is  a  civil  one,  and  of  that  the 
Supreme  Court  has  jurisdiction,  and  in  determining  it  it  is 
immaterial  whether  the  corporation  has  also  been  guilty  of  a 
crime  which  would  subject  it  to  prosecution  upon  indictment 
before  a  court  and  jury.''''  When  quo  warranto  to  forfeit  their 
charters  was  brought  against  several  corporations  having  their 
domicile  in  different  counties,  the  Circuit  Court  of  one  of  the 
counties  was  held  to  be  without  jurisdiction  even  though  some 
of  the  corporation  defendants  were  therein  domiciled.^^ 

§  390.  Parties— State— Attorney-General. 

The  State  may  bring  an  action  of  quo  warranto  to  test  the 
validity  of  a  corporate  organization  either  against  the  persons 
who  officially  undertake  to  exercise  its  powers  and  franchises 
or  against  the  organization  itself  by  the  name  it  assumes;  and 
in  either  case  a  valid  and  binding  judgment  of  nullity  may  be 
rendered.'"'  The  attorney-general  is  a  proper  party  in  quo 
warranto  to  oust  a  corporation  from  usurpation  of  franchises.^^ 
So  an  attorney-general  has,  without  leave  of  court,  the  right  at 
any  time  to  file  in  the  proper  court  an  information  in  quo  war- 
ranto wherein  matters  of  public  interest  are  involved,  but  he 
cannot  maintain  such  a  proceeding  solely  for  the  vindication  of 
private  rights  or  the  redress  of  private  grievances  in  which  the 
public  has  no  interest,  and  if  these  facts  appear  from  the  in- 
formation, they  may  be  taken  advantage  of  by  return  or 
special  plea  to  the  order  to  show  cause.''*  An  authority  con- 
ferred by  a  State  Constitution  upon  the  attorney-general  to 
prosecute  all  proper  actions  in  the  courts  to  prevent  the  un- 

*4  Syllabus  in  State  v.  Standard  Oil  Co.,  218  Mo.  1,  116  S.  W.  902. 

«  State  V.  Mississippi  Cotton  Oil  Co.,  79  Miss.  203,  30  So.  609. 

«  Gardner  v.  The  State,  77  Kan.  742,  95  Pac.  588. 

47  State  ex  rel.  Crow  v.  Lincoln  Trust  Co.,  144  Mo.  562,  46  S.  W.  593. 

«  State  ex  inf.  v.  Atchison,  Topeka  &  Santa  Fe  Ry.  Co.,  176  Mo.  687,  707, 
75  S.  W.  776,  63  L.  R.  A.  761  (considering  and  citing  numerous  authorities); 
State  ex  inf.  v.  Missouri  Pacific  Ry.  Co.,  176  Mo.  718,  75  S.  W.  888;  State 
ex  inf.  V.  Chicago,  Rock  Island  &  Pacific  Ry.  Co.,  176  Mo.  721,  75  S.  W.  888. 

631 


§  391       ACTIONS  AT    LAW   CONTINUED — QUO   WARRANTO 

lawful  exercise  of  power  by  corporations  is  exclusive  and  ren- 
ders invalid  any  statutory  attempt  to  confer  upon  district  or 
county  attorneys  a  power  to  bring  quo  warranto  in  like  cases, 
even  though  another  provision  of  the  Constitution  empowers 
the  latter  attorneys  to  represent  the  State  in  all  cases  in  the 
district  and  inferior  courts.^^  The  attorney-general  in  behalf  of 
the  State  and  at  its  expense,  and  not  an  attorney  acting  for  a 
town  and  at  its  expense,  should  prosecute  an  information  in  the 
nature  of  quo  warranto  brought  to  obtain  the  forfeiture  of  a 
corporation's  franchise  because  of  misuser  or  nonuser  thereof.^" 

§  391.  Parties— Plaintiffs— Defendants— Joinder. 

A  private  person  cannot,  in  Massachusetts,  maintain  quo 
warranto  in  his  own  name  in  cases  not  provided  for  under  the 
statute.^^ 

A  city  which  grants  by  ordinance  a  right  to  operate  an  inter- 
urban  railway  upon  its  streets,  is  a  proper  plaintiff  in  an  action 
of  the  character  of  quo  warranto  to  forfeit  the  rights  so  granted 
and  for  the  annulment  of  the  franchise  where  the  statute  au- 
thorizes it  to  be  brought  by  the  person  claiming  an  interest 
adverse  to  the  franchise  which  is  its  subject.^^ 

Information  in  nature  of  a  quo  warranto,  lies  against  persons 
acting  as  trustees  of  an  incorporated  church,  but  the  court  will 
grant  or  refuse  it,  according  to  circumstances.^^ 

Quo  warranto  proceeding  cannot  be  maintained  against  a 
superintendent  of  a  mining  corporation  where  his  employment 
depends  upon  the  will  of  the  directors,  as  he  is  not  a  person  un- 
lawfully exercising  an  office  in  a  corporation  created  by  the 
laws  of  the  State  within  the  intent  of  a  statute  providing  for 

49  State  V.  International  &  G.  N.  R.  Co.,  89  Tex.  562,  35  S.  W.  1067. 

50  Attorney-General  v.  Adonai  Shomo  Corp.,  167  Mass.  424,  45  N.  E.  762. 
When  attorney-general  cannot  bring  quo  warranto  but  county  attorney  must 

institute  proceedings  to  determine  usurpation  of  corporate  franchises,  see 
State  V.  Seattle  Gas  &  Electric  Co.,  28  Wash.  488,  70  Pac.  114;  Ballinger's 
Ann.  Codes  &  Stat.,  §  5781. 

51  Haupt  V.  Rogers,  170  Mass.  71,  48  N.  E.  1080. 

52  Olathe,  City  of,  v.  Missouri  &  Kansas  Interurban  Ry.  Co.,  78  Kan.  193, 
96  Pac.  42. 

53  Commonwealth  v.  Arrison,  15  Serg.  &  R.  (Pa.)  127. 

632 


ACTIONS    AT    LAW   CONTINUED — QUO    WARRANTO       §§  392,   393 

such  a  proceeding  in  sucli  cases."''"*  One  corporation  may  be 
jcjined  with  another  as  defendants  in  a  suit  in  the  name  of  the 
State  on  information  in  the  nature  of  a  quo  warranto  to  oust 
them  of  their  franchises  upon  a  charge  of  abuse  or  usurpation 
of  corporate  powers .^^ 

§  392.  Seeking  Other  Relief  as  Condition  Precedent  to 
Granting  Quo  Warranto. 

In  an  original  proceeding  in  quo  warranto  to  forfeit  the  right 
to  operate  a  railway  on  the  streets  of  a  city  the  case  will  be  dis- 
missed where  it  does  not  appear  that  there  has  been  a  sufficient 
effort  to  obtain  relief  by  other  means,  as  the  courts  are  re- 
luctant to  adjudge  forfeitures  of  corporate  privileges  and  fran- 
chises.^^ 

§  393.  Pleadings — Sufficiency  of  Showing. 

An  information  in  the  nature  of  quo  warranto  for  usurping  a 
franchise  need  show  no  title  in  the  people  to  the  franchise,  but 
it  lies  with  the  defendant  to  show  his  warrant  for  exercising  it.^^ 
It  need  not  be  alleged  that  the  misuser  relied  on  in  quo  war- 
ranto as  a  ground  for  forfeiture  of  a  franchise  is  willful.^* 

In  Illinois  the  allegations  in  any  information  in  quo  warranto 
may  be  of  a  general  character,  while  defendant  is  required  to 
set  forth  particularly  the  grounds  of  his  claim  and  the  con- 
tinued existence  of  his  right.  The  course  of  pleading  is  the 
same  as  in  other  forms  of  action,  the  action  of  quo  warranto 
being  purely  a  civil  one,  and  common-law  pleadings  govern  in 

estate  ex  rel.  Ryan  v.  Cronan,  23  Nev.  437,  40  Pac.  41. 

Parties  defendant  in  quo  warranto,  see  Saunders  v.  Kohnke,  109  La.  838, 
33  So.  793. 

55  Syllabus  in  State  v.  Standard  Oil  Co.,  218  Mo.  1,  116  S.  W.  902. 

Joinder  of  parties  defendant  in  quo  warranto,  see  State  v.  Leischer,  117 
Wis.  475,  94  N.  W.  290. 

58  Olathe,  City  of,  v.  Missouri  &  Kansas  Interurban  Ry.  Co.,  78  Kan. 
193,  96  Pac.  42. 

57  People  V.  Utica  Ins.  Co.,  15  Johns.  (N.  Y.)  357,  8  Am.  Dec.  243.  See 
§  384,  herein. 

58  State  ex  rel.  Walker  v.  Equitable  Loan  &  Inv.  Assoc,  142  Mo.  325,  41 
S.  W.  916. 

633 


§  393       ACTIONS   AT   LAW  CONTINUED— QUO   WARRANTO 

that  State  in  matters  of  quo  warranto;  but  while  a  defendant 
in  pleading  to  an  information  of  that  character  must  either  dis- 
claim or  justify,  and  if  he  pleads  justification  he  must  neces- 
sarily state  specifically  the  grounds  of  his  defense,  still  it  is  not 
necessary  or  proper  for  a  plea  to  anticipate  a  matter  which 
should  come  from  the  other  side.^^ 

In  Michigan  an  information  in  the  nature  of  quo  warranto 
against  a  corporation  organized  as  a  charitable  hospital  under 
a  statute,^"  which  alleges  that  defendant's  business  is  not  being 
conducted  as  a  charity  but  for  the  profit  of  its  officers,  and  that 
it  has  accumulated  a  large  amount  of  property  which  it  claims 
is  exempt  from  taxation,  and  that  defendant  was  organized  un- 
der said  law  for  the  purpose  of  claiming  the  exemption  for  its 
property  and  not  as  a  legitimate  charity,  states  a  case  under  the 
statute.^^ 

In  Missouri  the  pleadings  in  an  information  in  the  nature  of 
quo  warranto  are  governed  by  the  rules  in  civil  cases  rather  than 
those  which  apply  to  criminal  proceedings,  in  matters  of  form, 
as  well  as  in  matters  of  substance.  It  devolves  upon  the  State 
to  charge  or  aver  that  the  respondent  has  a  corporate  existence, 
and  if  the  evident  purpose  is  to  have  the  charter  forfeited  for 
nonuser,  misuser  or  usurpation  of  powers,  then  the  pleader 
must  plead  specifically  the  acts  of  nonuser,  the  acts  of  mis- 
user, or  of  usurpation  relied  upon  for  grounds  of  forfeiture,  so 
that  the  corporation  may  know  what  it  is  called  upon  to  meet 
and  defend,  and  when  the  information  attempts  to  set  out  the 
details  of  the  usurpation  of  the  franchises  and  all  the  facts  are 
pleaded,  an  issue  of  law  may  be  tendered  by  demurrer,  as  not 
only  the  statute  of  that  State,  but  the  decisions  thereof,  have 
recognized  the  right  to  demur  to  the  information  in  the  nature 
of  quo  warranto  ^^  And  in  that  State  an  information  in  quo 
warranto  to  oust  a  corporation  which  contains  general  allega- 

59  People  V.  Heidelberg  Garden  Co.,  233  111.  290,  84  N.  E.  230,  aff'g  124 
111.  App.  331. 

80  Act  No.  242,  Laws,  Mich.,  1863. 

81  People  V.  Michigan  Sanitarium  &  Benevolent  Assn.,  151  Mich.  452,  15 
Det.  L.  N.  24,  115  N.  W.  423.  3  Comp.  Laws  of  Mich.,  §  99.50. 

02  State  ex  rel.  Union  Electric  Light  &  Power  Co.  v.  Grimm,  220  Mo.  483. 

G34 


ACTIONS   AT    LAW   CONTINUED — QUO   WARRANTO       §  394 

tions  of  the  facts  constituting  the  misuser,  nonuser  or  usurpa- 
tion, is  sufficient.  The  State  is  not  required,  as  in  an  indictment 
in  a  criminal  prosecution,  to  allege  and  prove  in  detail  the  facts 
constituting  the  mode  and  manner  in  which  defendants  have 
violated  the  law  against  combinations  in  restraint  of  trade  or 
the  usurpation  of  powers  not  granted  by  their  charters.  And 
an  information  which  does  not  charge  defendants  with  forming 
a  combination  to  maintain  prices,  but  only  with  combining  to 
regulate,  control  and  fix  prices,  is  sufficient.  While  certain  sec- 
tions of  the  statutes  of  a  State  ^^  prohibit  a  combination  to  main- 
tain prices,  and  do  not  prohibit  combinations  to  fix,  regulate 
and  control  prices,  but  another  section  ^'*  does  in  express  terms 
prohibit  such  combinations,  all  should  be  construed  together  as 
one  act,  and  where  that  is  done  there  is  no  room  for  niceties  of 
meaning  between  "to  maintain  prices"  and  ''to  fix,  regulate 
and  control  prices."*^  A  showing  that  a  corporation  claims 
rights  and  privileges  not  within  its  grant  of  power  or  that  it 
intends  or  threatens  to  exercise  the  same  is  not  sufficient  to 
justify  a  court  in  entertaining  proceedings  in  quo  warranto  for 
the  forfeiture  of  its  charter .^^  If  it  is  not  averred  in  the  informa- 
tion that  the  corporation,  whose  charter  it  is  sought  to  forfeit, 
is  organized  under  the  laws  of  the  State,  the  information  is 
demurrable.^' 

§  394.  Defenses  Available,  Generally. 

The  existence  of  an  agreement  with  a  borough  whereby  a 
water  company  is  able  to  maintain  a  connection  with  a  mill 
pond  will  not  prevent  a  judgment  of  ouster,  under  a  writ  of 
quo  warranto  against  a  water  company,  for  rendering  its  water 
unfit  for  use  by  pumping  water  from  such  pond,  which  received 
the  seepage  of  a  town,  into  the  water  mains.** 

63  Mo.  Rev.  Stat.,  1899,  §§  8965,  8966. 

64  Section  8978. 

65  Syllabus  in  State  v.  Standard  Oil  Co.,  218  Mo.  1,  116  S.  W.  902. 

66  Attorney-General  v.  Superior  &  St.  C.  Rd.  Co.,  93  Wis.  604,  67  N.  W. 
1138. 

«7  Snyder  v.  Citizens'  Gas  &  O.  Min.  Co.,  151  Ind.  505,  51  N.  E.  1067. 
68  Commonwealth  v.  Potter  County  Water  Co.,  212  Pa.  St   463,  61  Atl. 
1099. 

C35 


§  394     AcnoNS  at  law  continued — quo  warranto 

It  is  held  that  the  constitutionaUty  of  a  statute,  because  of 
the  failure  to  provide  for  compensation  to  abutting  owners  for 
the  use  of  streets  by  a  telephone  company,  will  not  be  con- 
sidered in  quo  warranto  proceedings  by  the  State,  brought  only 
to  oust  a  telephone  company  from  the  city's  streets;  nor  in  such 
proceedings  will  an  ordinance  granting  a  franchise,  within  the 
power  of  the  city,  be  declared  void  because  of  an  irregularity  in 
the  passage  of  the  enactment.*^^  Where  quo  warranto  is  brought 
against  a  foreign  corporation  on  the  ground  that  it  is  unlaw- 
fully exercising  certain  franchises  the  fact  that  it  has  a  license 
from  the  state  superintendent  of  insurance  constitutes  no  bar.''" 

«9  state  V.  Nebraska  Teleph.  Co.,  127  Iowa,  194,  103  N.  W.  120. 

7«  State  ex  rel.  Attorney-General  v.  Fidelity  &  C.  Ins.  Co.,  49  Ohio  St.  440, 
28  Ohio  L.  J.  26,  20  Wash.  L.  Rep.  485,  31  N.  E.  655,  16  L.  R.  A.  611,  21 
Ins.  L.  J.  678. 


636 


ACTIONS    AT    LAW    CONTINUED — PROHIBITION       §§  395,  39G 


CHAPTER  XXIII 

ACTIONS   AT   LAW   CONTINUED — PROHIBITION 

§  395.  Nature  of    Prohibition,   Gen-    §  398.  Where    Act    Sought    to    Be 
erally.  Prohibited  Has  Been  Done. 

396.  Nature    of    Prohibition    Con-       399.  Prohibition    to    Court    With- 

tinued — Is  a  Discretionary  out  Jurisdiction  or  Where 

Writ — Effect  of  Judgment  It  Exceeds  Jurisdiction, 

or  Sentence.  400.  Prohibition      to      Admiralty 

397.  Prohibition     Does    Not    Lie  Court. 

Where    There    Is    a    Plain       401.  Prohibition  —  Parties,  Gener- 
and    Adequate    Remedy —  ally. 

Exhausting  Remedies. 

§  395.  Nature  of  Prohibition,  Generally. 

The  writ  of  prohibition  issues  by  way  of  preventive  relief 
not  to  supply  other  remedies  or  to  serve  in  their  place  as  in  case 
of  an  appeal.^  It  is  also  held  not  to  be  a  writ  of  right .^  A  writ  of 
prohibition  should  issue  from  the  law  side  of  the  court .^ 

Under  a  Missouri  decision,  however,  the  intent  of  the  statute 
is  that  a  simple  form  of  action  should  be  had  between  the  parties 
in  conformity  with  the  Code  as  far  as  applicable.^ 

§  396.  Nature  of  Prohibition  Continued — Is  a  Discretion- 
ary Writ — Effect  of  Judgment  or  Sentence. 

A  party  is  entitled  to  a  writ  of  prohibition  as  a  matter  of 
right  where  it  appears  that  the  court  whose  action  is  sought  to 
be  prohibited  had  clearly  no  jurisdiction  of  the  cause  originally, 

1  Valentine  v.  Police  Court  of  San  Francisco,  141  Cal.  615,  75  Pac.  336. 

2  Holly  Shelter  Rd.  Co.  v.  Newton,  133  N.  C.  132,  1.36,  45  S.  E.  549. 

3  Smith  V.  Whitney,  116  U.  S.  167,  6  Sup.  Ct.  570,  29  L.  ed.  601. 

A  writ  of  prohibition  is  either  alternative  or  absolute.  N.  Y.  Code  Civ. 
Proc,  §  2091. 

*  State  ex  rel.  St.  Louis  &  K.  R.  Co.  v.  Hirzel,  137  Mo.  435,  37  S.  W.  921, 
38  S.  W.  961. 

637 


§  397  ACTIONS     AT    LAW    CONTINUED — PROHIBITION 

or  of  some  collateral  matter  arising  therein,  and  that  he  ob- 
jected to  the  jurisdiction  at  the  outset,  and  has  no  other 
remedy;  where  there  is  another  remedy  by  appeal  or  otherwise, 
or  where  the  question  of  the  jurisdiction  of  the  court  is  doubtful 
or  depends  on  facts  which  are  not  made  matter  of  record,  or 
where  the  application  is  made  by  a  stranger,  the  granting  or 
refusal  of  the  writ  is  discretionary;  and  it  is  not  obligatory 
where  the  case  has  gone  to  sentence,  and  the  want  of  jurisdic- 
tion does  not  appear  on  the  face  of  the  proceedings.^ 

WTiere  there  is  another  remedy  by  appeal  or  otherwise,  or 
where  the  question  of  the  jurisdiction  of  the  court  is  doubtful  or 
depends  on  facts  which  are  not  made  matter  of  record,  or  where 
the  application  for  a  writ  of  prohibition  is  made  by  a  stranger, 
the  granting  or  refusal  of  the  writ  is  discretionary;  and  it  is  not 
obligatory  where  the  case  has  gone  to  sentence,  and  the  want  of 
jurisdiction  does  not  appear  on  the  face  of  the  proceedings.^ 
Again,  it  is  held  that  the  writ  is  so  far  a  discretionary  one  that 
it  must  appear  that  irreparable  damage  would  result  if  it  should 
not  be  granted.'' 

Prohibition  will  not,  however,  go  after  judgment  and  sen- 
tence, unless  want  of  jurisdiction  appears  on  the  face  of  the 
proceedings;  but,  before  judgment,  the  Superior  Court  can  ex- 
amine not  simply  the  process  and  pleadings  technically  of  record, 
but  also  the  facts  and  evidence  upon  which  action  was  taken.* 

§  397.  Prohibition  Does  Not  Lie  Where  There  Is  a  Plain 
and  Adequate  Remedy — Exhausting  Remedies. 

The  writ  of  prohibition  will  not  be  granted  if  the  petitioner 
has  a  plain,  complete,  adequate  and  speedy  remedy  by  some 

5  New  York  &  Porto  Rico  Steamship  Co.,  In  re,  155  U.  S.  523,  39  L.  ed. 
246,  15  Sup.  Ct.  183. 

8  New  York  &  Porto  Rico  Steamship  Co.,  In  re,  155  U.  S.  153,  15  Sup.  Ct. 
183,  39  L.  ed.  246;  Rice,  In  re,  155  U.  S.  .396,  39  L.  ed.  198,  15  Sup.  Ct.  194; 
Alix,  In  re,  166  U.  S.  1.36,  17  Sup.  Ct.  948,  41  L.  ed. .  See  Kilty  v.  Jack- 
son, 184  Mass.  310,  68  N.  E.  2.36. 

7  Holly  Shelter  Rd.  Co.  v.  Newton,  133  N.  C.  132,  136,  45  S.  E.  549.  See 
State  ex  rel.  Mayer  v.  Rightor,  40  La.  Ann.  837,  6  So.  102;  Ensign  Co.  v. 
Carroll,  .30  W.  Va.  5.32,  4  S.  E.  782. 

8  Cooper,  In  re,  143  U.  S.  472,  36  L.  ed.  4.32,  12  Sup.  Ct.  453. 

638 


ACTIONS    AT    LAW    CONTINUED — PROHIBITION  §  397 

other  proceeding  or  action;  ^  the  writ  is  not  to  supply  the  place 
of  other  remedies;  ^"  nor  is  it  necessary  to  wait  until  all  remedies 
are  exhausted  in  the  inferior  court."  It  is  held,  however,  that  an 
application  for  a  writ  of  prohibition  will  not  be  considered  un- 
less it  is  shown  that  relief  was  unsuccessfully  sought  in  the  lower 
court.^^  Nor  will  such  a  writ  be  granted  in  favor  of  a  corpora- 
tion where  the  law  affords  an  adequate  remedy  to  correct  the 
errors  on  which  the  relief  sought  for  in  the  petition  is  based.^' 
Under  the  provisions  of  the  Idaho  statute  ^^  a  writ  of  prohi- 
bition will  be  issued  upon  proper  complaint  or  petition  to  arrest 
proceedings  which  are  without  or  in  excess  of  the  jurisdiction 
of  such  tribunal,  corporation,  board  or  person,  in  all  cases  where 
there  is  not  a  plain,  speedy  and  adequate  remedy  in  the  ordinary 
course  of  law.  It  was  held,  therefore,  that  if  an  appeal  is  au- 
thorized under  the  facts  of  the  case  it  would  not  be  a  plain, 
speedy  and  adequate  remedy  in  the  ordinary  course  of  law.^^ 

8  Alabama:  Smith,  Ex  parte,  23  Ala.  94. 

California:  McAneny  v.  Superior  Court,  150  Cal.  6,  87  Pac.  1020  (under 
Code  Civ.  Proc,  §  1102);  Western  Meat  Co.  v.  Superior  Court,  9  Cal.  App. 
538,  99  Pac.  976;  Keith  v.  Recorder's  Court,  9  Cal.  App.  380,  99  Pac.  416; 
Hubbard  v.  Justices'  Court,  5  Cal.  App.  90,  89  Pac.  865. 

Colorado:  Mclnerney  v.  City  of  Denver,  17  Colo.  302,  29  Pac.  516. 

District  of  Columbia:  Dahlgreen,  In  re,  30  App.  D.  C.  588. 

Idaho:  Bellevue  Water  Co.  v.  Stockshager  (Idaho,  1895),  43  Pac.  568. 

Michigan:  Port  Huron  Savings  Bank  v.  St.  Clair  Circuit  Judge,  147  Mich. 
551,  14  Det.  L.  N.  2,  111  N.  W.  202. 

Minnesota:  State  ex  rel.  Townsend  v.  Ward,  70  Minn.  58,  72  N.  W.  825. 

Missouri:  State  ex  rel.  Missouri  Pac.  R.  Co.  v.  Seay,  23  Mo.  App.  623. 

Nevada:  Low  v.  Crown  Point  Min.  Co.,  2  Nev.  75. 

New  York:  People  v.  Westbrook,  89  N.  Y.  252;  People  v.  Nichols,  79 
N.  Y.  582,  rev'g  18  Hun,  5.30. 

Utah:  Board  of  Home  Missions  of  Presby.  Church  of  U.  S.  v.  Maughan 
(Utah,  1909),  101  Pac.  581. 

Washington:  State  v.  Superior  Court,  51  Wash.  572,  99  Pac.  760;  State  v. 
Superior  Court,  50  Wash.  650,  97  Pac.  778;  State  v.  Moore,  23  Wash.  115, 
62  Pac.  441. 

10  State  ex  rel.  McNamee  v.  Stobie,  194  Mo.  14,  92  S.  W.  191. 

11  N.  N.  &  M.  V.  Co.  V.  McBrayer,  15  Ky.  L.  Rep.  399. 

12  Quaker  Realty  Co.,  In  re,  122  La.  43,  47  So.  360. 

13  Western  Meat  Co.  v.  Superior  Court,  9  Cal.  App.  538,  99  Pac.  976. 
"  Section  4995,  Rev.  Stat.  Idaho. 

isCronan  v,  Dist.  Court,  15  Idaho,  184,  96  Pac.  768. 

639 


§  398  ACTIONS     AT    LAW    CONTINUED — PROHIBITION 

Again,  the  court  will  deny  an  application  for  a  writ  of  prohibi- 
tion sought  for  the  purpose  of  restraining  respondents  from  try- 
ing a  corporation  upon  an  information  charging  it  with  a  viola- 
tion of  a  statute ^^  defining  trusts  and  providing  "criminal 
penalties  and  civil  damages,  and  punishment  of  corporations, 
persons,  firms,  and  associations,  or  persons  connected  with  them, 
and  to  promote  free  competition  in  commerce  and  all  classes  of 
business,  in  the  State."  The  ground  on  which  the  petitioner 
mainly  relied  was  that  prior  to  the  filing  of  the  information  the 
petitioner  had  not  been  legally  committed  under  the  provisions 
of  the  Penal  Code,  but  this  question  was  declared  by  the  court 
to  be  "altogether  beside  the  proposition  submitted  in  this  pro- 
ceeding," and  it  was  also  declared  that  the  only  question  was: 
"Did  the  court  act  in  excess  of  its  jurisdiction  in  the  matter  of 
its  arraignment  of  the  petitioner?"  and  it  was  held  that  the 
remedy  at  law  was  adequate  to  move  to  set  aside  the  informa- 
tion, and  "it  is  a  fundamental  principle  that  errors  of  law  can- 
not be  reviewed  in  a  proceeding  of  the  character  of  the  one 
before  us  where  there  is  an  adequate  remedy  at  law  for  the  cor- 
rection of  such  errors.  If,  therefore,  the  petitioner  was  arraigned 
on  an  information  not  founded  on  a  proper  commitment,  or  was 
otherwise  not  properly  or  legally  arraigned,  the  law  affords 
ample  remedy  for  the  correction  of  the  error."  ^^ 

When  a  party  aggrieved  by  a  judgment  has  an  appeal  to  the 
Federal  Supreme  Court  which  becomes  inefficacious  through  his 
neglect,  a  writ  of  prohibition  to  prevent  the  enforcement  of  the 
judgment  will  not  issue  to  said  court .^* 

§  398.  Where  Act  Sought  to  Be  Prohibited  Has  Been  Done. 

The  writ  of  prohibition  can  only  be  used  to  prevent  the  doing 
of  some  act  which  is  about  to  be  done,  and  can  never  be  used  as 
a  remedy  for  acts  already  completed.  Therefore,  where  the 
court  to  which  the  writ  should  be  issued,  has  already  disposed  of 
the  case,  so  that  nothing  remains  which  that  court  can  do, 

i«Cal.  Stats.,  1907,  p.  984. 

17  Western  Meat  Co.  v.  Superior  Court,  9  Cal.  App.  5.38,  99  Pac.  976. 

18  Cooper,  In  re,  143  U.  S.  472,  36  L.  ed.  432,  12  Sup.  Ct.  453. 

640 


ACTIONS    AT    LAW    CONTINUED — PROHIBITION  §  399 

either  by  way  of  executing  its  judgment  or  otherwise,  no  prohi- 
bition will  be  granted.  And  this  is  true,  though  the  final  dis- 
position of  the  case  was  made  after  service  on  the  judge  of  a 
rule  to  show  cause  why  the  writ  should  not  issue;  and  though 
other  cases  of  the  same  character  may  be  pending  in  the  same 
court.  ^'^ 

Again,  where  the  case  is  one  in  prohibition,  and  it  appears 
by  conclusive  evidence  aliunde  that  since  judgment  by  dismissal 
in  the  lower  court  the  thing  sought  to  be  prohibited  has  been 
done  and  cannot  be  undone  by  any  order  of  the  court,  there  is 
nothing  remaining  but  a  moot  case  and  the  writ  of  error  will 
be  dismissed.^" 

§  399.  Prohibition  to  Court  Without  Jurisdiction  or 
Where  It  Exceeds  Jurisdiction. 

A  party  is  entitled  to  a  writ  of  prohibition  as  a  matter  of 
right  where  it  appears  that  the  court  whose  action  is  sought  to 
be  prohibited  had  clearly  no  jurisdiction  of  the  cause  originally, 
or  of  some  collateral  matter  arising  therein,  and  that  he  ob- 
jected to  the  jurisdiction  at  the  outset,  and  has  no  other 
remedy .^^  And  if  a  court  assumes  jurisdiction  of  an  action 
when  he  has  by  statute  been  deprived  of  jurisdiction  in  that 

19  United  States  v.  Hoffman,  4  Wall.  (71  U.  S.)  158,  18  L.  ed.  354.  See 
also  Hiern  v.  St.  Paul,  104  La.  280,  29  So.  112;  State  ex  rel.  Chappuis  v. 
Marmouget,  104  La.  1,  28  So.  920. 

A  writ  of  prohibition  will  not  be  issued  to  an  inferior  court  in  respect  of 
a  cause  which  is  finished.  Joins,  Ex  parte,  191  U.  S.  93,  48  L.  ed.  110,  24 
Sup.  Ct.  27. 

20  Jones  V.  Montagues,  194  U.  S.  147,  48  L.  ed.  913,  24  Sup.  Ct.  611. 

21  New  York  &  Porto  Rico  Steamship  Co.,  In  re,  155  U.  S.  153,  15  Sup. 
Ct.  183,  39  L.  ed.  246;  Rice,  In  re,  155  U.  S.  396,  39  L.  ed.  198,  15  Sup.  Ct, 
194;  Alix,  In  re,  166  U.  S.  136,  17  Sup.  Ct.  948,  41  L.  ed.  948. 

See  the  following  cases: 

United  States:  Smith  v.  Whitney,  116  U.  S.  167,  29  L.  ed.  601,  6  Sup.  Ct. 
570. 

Kentucky:  Clark  County  Court  v.  Warner,  25  Ky.  L.  Rep.  857,  76  S.  W. 
828. 

Massachusetts:  Tehan  v.  Brown,  191  Mass.  92,  77  N.  E.  313. 

New  York:  People  v.  Goff,  98  N.  Y.  Supp.  66,  49  Misc.  72,  rev'd  98  N.  Y. 
Supp.  557,  112  App.  Div.  424,  aff'd  in  185  N.  Y.  504,  78  N.  E.  149. 

Virginia:  Moss  v.  Burham,  94  Va.  12,  26  S.  E.  388. 

West  Virginia:  Eastham  v.  Holt,  43  W.  Va.  599,  27  S.  E.  883. 

41  641 


§  400  ACTIONS    AT    LAW    CONTINUED — PROHITU TION 

class  of  cases  he  may  be  restrained  by  a  writ  of  prohibition?^ 
So  where  a  court  acting  in  excess  of  its  jurisdiction  appoints 
a  receiver  who  takes  possession  of  property,  prohibition  will  lie.^^ 
In  a  recent  case  in  Missouri  there  was  an  original  proceeding 
in  the  Supreme  Court  to  obtain  a  writ  of  prohibition  to  prevent 
the  respondent  from  further  entertaining  jurisdiction  of  a  cer- 
tain injunction  suit  pending  in  the  court  over  which  he  presided, 
wherein  the  State  at  the  relation  of  a  circuit  attorney  was  plain- 
tiff and  certain  railroad  companies  were  defendants.  The  ap- 
plication for  prohibition  set  out  the  jjetition  and  the  amended 
petition  in  the  injunction  proceedings,  and  also  the  orders  made 
by  the  respondent.  In  the  restraining  order  the  defendants 
were  enjoined  from  charging,  exacting  or  receiving  three  cents 
a  mile  for  the  transportation  of  passengers  within  the  State  of 
Missouri  and  from  receiving  a  higher  or  greater  amount  than 
two  cents  a  mile.  A  peremptory  writ  was  awarded;  and  it  was 
held  that  it  was  settled  doctrine  that  a  writ  of  prohibition  lies 
as  well  to  prevent  an  excessive  or  unauthorized  application  of 
judicial  force  as  where  a  court  assumes  judicial  power  not 
granted  by  law.^ 

§  400.  Prohibition  to  Admiralty  Court. 

A  writ  of  prohibition  will  not  be  issued  to  a  District  Court 
of  the  United  States  sitting  in  admiralty,  wherein  a  libel  claim- 
ing damages  was  filed  against  a  steamer  for  drowning  certain 

22  Norfolk  &  W.  Rd.  Co.  v.  Pinnacle  Coal  Co.,  44  W.  Va.  574,  41  L.  R.  A. 
414,  30  S.  E.  196. 

23  Murray  v.  Superior  Court,  129  Cal.  628,  62  Pac.  191.  See  State  ex  rel. 
St.  Louis  &  K.  R.  Co.  v.  Hirzel,  137  Mo.  435,  37  S.  W.  921,  .38  S.  W.  961. 

Prohibition  in  case  of  excess  of  jurisdiction,  see  State,  Bronsard  v.  Voor- 
hies,  51  La.  Ann.  500,  25  So.  96. 

24  State  ex  rel.  Missouri  Pacific  Ry.  Co.  v.  Williams,  221  Mo.  227.  This 
case  is  also  important  by  reason  of  other  questions  decided,  viz.:  that  the 
State  Court  could  not  entertain  jurisdiction  to  defeat  the  result  of  an  ad- 
judication of  the  Federal  Circuit  Court  upon  the  question  of  rates  and  fares; 
also  the  effect  of  charges  in  the  bill  as  to  combinations,  etc.,  as  concealing 
the  main  purpose  of  the  bill;  also  the  right  of  a  circuit  attorney  to  bring 
suit  to  enjoin;  also  the  question  as  to  the  State  being  a  party:  also  who  are 
real  parties;  also  the  remedy  in  case  of  wrongful  decision  by  the  Federal 
Circuit  Court. 

642 


ACTIONS     AT     LAW    CONTINUKI) — PROHIBITION  §  400 

seamen  of  a  vessel,  with  which,  as  she  was  navigating  the  public 
waters  of  the  United  States,  the  steamer,  as  was  alleged,  wrong- 
fully collided.  That  court,  having  jurisdiction  of  the  steamer 
and  of  the  collision  which  is  the  subject-matter  of  the  suit,  is 
competent  to  decide  whether,  under  the  circumstances,  it  may 
estimate  the  damages  which  one  person  has  sustained  by  the 
killing  of  another.2^ 

So  a  writ  of  prohibition  to  prohibit  judges  of  the  District 
Court  from  applying  any  part  of  proceeds  of  sale  under  decrees 
of  admiralty  court  of  same  district  of  vessels  belonging  to  a 
bankrupt,  and  surrendered  by  the  receiver  for  adjudication  of 
the  maritime  liens,  to  the  payment  of  the  receiver's  expenses 
and  commissions  in  connection  with  such  vessels,  until  all  mari- 
time liens  had  been  paid  in  full,  will  be  refused.^^ 

In  a  Federal  case,  the  facts  were  as  follows : 

The  collector  of  customs  at  the  port  of  New  York  seized  a 
British  built  steam  pleasure  yacht,  purchased  in  England  by  a 
citizen  of  the  United  States,  and  duly  entered  at  that  port,  the 
seizure  being  for  the  alleged  reason  that  the  vessel  was  liable  to 
duty  as  an  imported  article.  Her  owner  filed  a  libel  in  ad- 
miralty against  her  and  the  collector  in  the  District  Court  of 
the  United  States  for  the  Southern  District  of  New  York,  claim- 
ing the  delivery  of  the  vessel  to  him  and  damages  against  the 
collector.  Under  process  from  the  court  the  vessel  was  at- 
tached and  taken  possession  of  by  the  marshal,  and  due  notice 
was  given.  The  collector  appeared  personally  in  the  suit,  and 
})ut  in  an  answer,  and  the  district  attorney  put  in  a  claim  and 
an  answer  in  behalf  of  the  United  States.  The  substance  of  the 
answers  was  that  the  vessel  was  liable  to  duty  as  an  imported 
article.  The  collector  appHed  to  the  Federal  Supreme  Court 
U)Y  a  writ  of  prohibition  to  the  District  Court,  alleging  that 
that  court  had  no  jurisdiction  of  the  suit.  The  Federal  Supreme 
Court,  without  considering  the  question  of  the  liability  of  the 

25  Gordon,  Ex  parte,  104  U.  S.  515,  26  L.  ed.  814. 

28  Hudson  Oil  &  Supply  Co.,  Matter  of,  214  U.  S.  487  (writ  denied; 
no  opinion);  Consolidated  Rubber  Tire  Co.,  Matter  of,  214  U.  S.  488 
(same  facts;  no  opinion). 

643 


§  401  ACTIONS    AT    LAW    CONTINUED — PROHIBITION 

vessel  to  duty,  denied  the  writ  on  these  grounds:  The  District 
Court  had  jurisdiction  of  the  vessel  and  of  the  collector;  the 
(luestion  whether  the  vessel  was  liable  to  duty  as  an  imported 
article  was  siib  judice  in  the  District  Court;  the  subject-matter 
of  the  libel  was  a  marine  tort,  cognizable  by  the  District  Court; 
it  being  alleged  in  the  answers,  that  the  vessel  was  detained  by 
the  collector  "  under  authority  of  the  revenue  laws  of  the  United 
States,"  she  was,  under  the  Revised  Statutes,^^  subject  to  the 
order  and  decree  of  the  District  Court;  the  libelant  had  no 
remedy  under  the  Customs  Administrative  Act,^*  and  the  only 
way  in  which  the  vessel  could  be  brought  under  the  jurisdiction 
of  the  court  of  the  United  States  was  by  the  institution  of  the 
nbel.29 

§  401.  Prohibition— Parties,  Generally. 

Although  a  statute^"  declares  that  the  writ  of  prohibition 
is  a  counterpart  of  the  writ  of  mandate,  still  it  is  held  that  the 
same  degree  of  strictness  is  not  maintained  in  prohibition  as  in 
mandate.  So  a  party  seeking  relief  by  writ  of  prohibition  need 
not  necessarily  be  named  as  a  party  in  the  original  action. 
He  may  make  himself  a  party  by  showing  that  he  has  an  in- 
terest in  the  controversy  and  by  moving  to  set  aside  a  judg- 
ment or  order  made  without  or  in  excess  of  jurisdiction,  and  if 
his  motion  is  denied  and  an  appeal  would  not  be  a  plain,  speedy 
and  adequate  remedy,  he  may  have  the  writ  of  prohibition 
issued  to  protect  his  rights.^^ 

Under  the  Missouri  statute  governing  the  procedure  in  pro- 
hibition the  suit  need  not  be  brought  in  the  name  of  the  State 
at  the  relation  of  the  parties  for  whom  the  action  is  instituted.^^ 

27  Section  934. 

28  Act  of  June  10,  1890,  26  Stat.  131. 

29  Fassett,  In  re,  142  U.  S.  479,  35  L.  ed.  1087,  12  Sup.  Ct.  295,  followed  in 
Eagles,  In  re,  146  U.  S.  357,  36  L.  ed.  1004,  13  Sup.  Ct. . 

30  Rev.  Stat.  Idaho,  §  4995. 

31  Cronan  v.  Dist.  Court,  15  Idaho,  1S4,  96  Pac.  768. 

32  State  ex  rel.  St.  Louis  &  K.  R.  Co.  v.  Hirzel,  137  Mo.  435,  37  S.  W.  921, 
38  S.  W.  961. 


644 


EQUITABLE    REMEDIES 


CHAPTER  XXIV 


EQUITABLE    REMEDIES 


402.  Equity,  Generally. 

403.  When     Equity    Is     Without 

Jurisdiction,  Generally. 

404.  Equity  Jurisdiction — Parties, 

Generally. 

405.  What  Is  Not  and  Is  a  Condi- 

tion Precedent  to  Suit — 
Quieting  Title  —  Specific 
Performance. 

406.  Equity — Adequate     Remedy 

at  Law. 

407.  Contract  for  Co-operation  in 

Procuring  Municipal  Fran- 
chise— Validity  of — Public 
Policy  —  Equity  —  When 
Remedy  at  Law  Adequate 
— Illustration. 

408.  Adequate  Statutory  Remedy 

— Application  to  Municipal 
Body  as  Condition  Prece- 
dent to  Equity  Suit — Rate 
Regulation. 

409.  Irreparable  Injury. 

410.  Multiplicity  of  Suits. 

411.  Fraud  and  Trusts. 

412.  Reformation  of  Relief  or  from 

Written  Instruments  or 
Contracts. 

413.  Accounting. 

414.  Corporation    Mortgages — En- 

forcement of — Foreclosure 
— Rights  and  Remedies  of 
Parties — General  Instances. 

415.  Corporation  Liens  and  Mort- 

gages— Equity  Jurisdiction 
of  Foreclosure — Conflicting 
Claims  to  Possession. 

416.  Corporation  Liens  and  Mort- 

gages— Enforcement  of — 
Foreclosure — Parties. 


417.  Rights  of  Parties  upon  Fore- 

closure of  Mortgages — Jun- 
ior Bondholder — Judgment 
Creditor  —  Priorities — Pro- 
ceeds of  Sale — Adjustment 
of  Claim — Accounting — In- 
stances. 

418.  Foreclosure  and  Sale  of  Rail- 

road Mortgage — Distribu- 
tion of  Proceeds — Unse- 
cured Creditors — Bank  as 
General  Creditor  —  Prior 
Mortgagee. 

419.  Foreclosure  of  Railroad  Mort- 

gage— Rights  of  Purchaser 
— Title  and  Obligations. 

420.  Foreclosure  and  Sale — Reor- 

ganization Agreements  by 
Purchasers — Exceptions  to 
Sale — Constitutional    Law. 

421.  Injunction,    Generally  —  In- 

stances. 

422.  Injunction — Jurisdiction. 

423.  Jurisdiction  to  Enjoin  Pros- 

ecuting Action  in  Another 
State — Jurisdiction  of 
Federal  Court — Injunction 
from  to  State  Court. 

424.  Injunction    Against    Officers, 

Directors  or  Stockhold- 
ers. 

425.  Injunction  —  Rate      Regula- 

tion. 

426.  Injunction — By  and  Against 

Railroads  and  Street  Rail- 
roads. 

427.  Injunction — By  and  Against 

Telegraph  and  Telephone 
Companies. 

645 


§  402  EQUITABLE    REMEDIES 

§  428.   Injunction — Interference  forcement  of  Orders  of  In- 

With  Departmental  Officers  terstate  Commerce, 

or  Executive  Department —  §  434.  Bill  Lies  in  Equity  to  Revise 

Postmaster.  Ruling    of    Railroad   Com- 

429.  Injunction   to   Protect   Fran-  missioners. 

chises    of     Corporation    or  435.  Equity — Cancellation  and  Re- 

to   Prevent    Their  Forfeit-  scission. 

ure.  436.  Cancellation,     Rescission     or 

430.  Injunction  —  Criminal    Pro-  Setting  Aside  Sale  of  Cor- 

ceedings — When  Equity  porate  Stock — Contracts  to 

Cannot  and  Can  Enjoin.  Prevent  Competition — Pre- 

431.  Injunction — Nuisances — Bill  tended  Purchase  of  Stock. 

in  Equity  to  Abate.  437.  Specific  Performance. 

432.  Injunction— Nuisances — Par-       438.  Specific    Performance  —  Dis- 

ties  —  State    or   Attorney-  cretion  of  Court. 
General  —  Corporations  —  439.  Specific  Performance  —  Con- 
Joinder,  tract     to     Sell     Corporate 

433.  Injunction    to    Restrain    En-  Stock. 

§  402.  Equity,  Generally.^ 

Chancery  jurisdiction  is  conferred  on  the  courts  of  the  United 
States  by  the  Constitution  under  certain  Hmitations,  and  under 
these  limitations,  the  usages  of  the  High  Court  of  Chancery,  in 
England,  so  far  as  adopted  as  rules  by  the  Federal  Supreme 
Court,  furnish  the  chancery  law  which  is  exercised  by  the 
States,  and  even  in  those  where  no  State  chancery  system  ex- 
ists. Under  this  system,  where  relief  can  be  given  by  the  English 
chancery,  similar  relief  can  be  given  by  the  courts  of  the  Union; 
and  this  applies  to  the  right  of  a  person  or  corporation  to  pro- 
ceed against  a  bridge  as  a  nuisance  where  such  a  bridge  ob- 
structs navigation.^  The  Federal  Circuit  Court  may  also  when 
sitting  in  a  State,  take  jurisdiction  of  a  bill  brought  under  a  State 
statute  even  though  such  statute  may  have  enlarged  the  ordi- 
nary equitable  action  to  quiet  title  and  remove  a  cloud.^    So 

iSee  §§  162,  163,  herein. 

2  Pennsylvania  v.  Wheeling  &  Belmont  Bridge  Co.,  13  How.  (54  U.  S.)  518, 
14  L.  ed.  249,  18  How.  (59  U.  S.)  421,  15  L.  ed.  435;  s.  c,  IS  How.  (59  U.  S.) 
460,  15  L.  ed.  449.    See  §§  162,  163,  herein. 

Equity  jurisdiction  general  and  unlimited  over  corporations,  see  Central 
Iron  Works  v.  Pennsylvania  Rd.  Co.,  2  Dauph.  Co.  Rep.  308,  under  statute. 

3  Bardon  v.  Land  &  River  Improv.  Co.,  157  U.  S.  327,  15  Sup.  Ct.  650, 
39  L.  ed.  719. 

646 


EQUITABLE    REMEDIES  §  402 

Federal  Courts  may  enforce  on  their  equity  or  admiralty  side 
new  rights  or  new  privileges  conferred  by  State  or  Territorial 
statutes  as  they  may  enforce  new  rights  of  action,  given  by 
statute,  upon  their  common-law  side,  and  this  applies  to  a  case 
of  fraud.^  But  said  court  cannot  in  the  trial  of  an  action  at 
law  exercise  the  powers  of  a  court  of  equity.^  A  court  of  equity 
has  full  power  to  dispose  of  all  questions  and  grant  complete 
equitable  relief  as  to  all  matters  within  the  bill  when  properly 
before  the  court  on  the  pleadings  and  fairly  within  the  issues, 
provided  it  has  obtained  equity  jurisdiction  on  a  distinct  ground 
of  equity.^  So  an  attachment  lien  may  properly  be  protected 
in  equity/  Equity  has  also  the  power  to  determine  riparian 
rights  as  between  prior  and  subsequent  appropriators.*  And 
resort  may  be  had  to  equity  to  prevent  the  violation  of  the 
right  to  exercise  an  exclusive  ferry  franchise.^ 

A  court  of  equity  has  jurisdiction  whether  the  statute  con- 
ferred it  or  not  to  inquire  into  the  validity  of  the  election  of 
corporation  directors  and  to  set  the  same  aside  if  not  made  in 
conformity  with  law.^*'  Stockholders  are  also  entitled  to  invoke 
equitable  protection  against  a  by-law  increasing  the  powers  of 
officers  and  directors  which  regulate  the  internal  affairs  of 
corporations  and  the  management  thereof,  unless  it  appears 
that  such  by-law  was  legally  adopted."  Again,  equity  may 
compel  a  corporation  to  deliver  certificates  of  shares  of  capital 

4  Cowley  V.  Northern  Pac.  Rd.  Co.,  159  U.  S.  569,  40  L.  ed.  263,  16  Sup. 
Ct.  127. 

5  Security  Trust  Co.  v.  Black  River  National  Bank,  187  U.  S.  211,  47  L. 
ed.  147,  23  Sup.  Ct.  52. 

6  Elk  Fork  Oil  &  Gas  Co.  v.  Jennings  (U.  S.  C.  C),  84  Fed.  839. 

7  Montana  Nat.  Bank  v.  Merchants'  Nat.  Bank,  19  Mont.  586,  49  Pac. 
140,  61  Am.  St.  Rep.  532. 

8  Becker  v.  Marble  Creek  Irrig.  Co.,  15  Utah,  225,  49  Pac.  892,  1119. 

9  Murray  v.  Menefee,  20  Ark.  561. 

10  Wright  V.  Central  California  Water  Co.,  67  Cal.  532,  8  Pac.  70,  citing 
Brown  v.  Pacific  Mail  Steamship  Co.,  5  Blatchf.  (U.  S.  C.  C.)  525;  Webb  v. 
Ridgely,  38  Md.  364;  Walker  v.  Devereaux,  4  Paige  (N.  Y.),  225.  See 
Keen  v.  Union  Water  Co.,  52  N.  J.  Eq.  813,  31  Atl.  282.    See  §  260,  herein. 

11  Weinburgh  v.  Union  St.  Ry.  A.  Co.,  55  N.  J.  Eq.  640,  37  Atl.  1026. 
Internal  management  of  corporatiovf^ — general  rule,  see  §  260,  herein.     Ex- 
amine Hartley  v.  Welsh,  8  Pa.  Dist.  R.  546,  23  Pa.  Co.  Ct.  R.  78. 

647 


§§  403,  404  EQUITABLE    REMEDIES 

stock  ill  accordance  with  an  agreement  with  a  transferrer  of 
property  to  the  corporation  upon  consideration  of  the  issuance 
of  stock  therefor.^2  gut  a  stockholder  in  an  insolvent  corpora- 
tion, who  has  paid  his  stock  subscription  in  full  by  a  transfer  of 
a  tract  of  land,  in  good  faith,  at  an  agreed  value,  for  the  use  of 
the  company's  business,  is  not  liable  in  equity  to  a  creditor  of 
the  corporation  who  had  knowledge  of  it  and  assented  to  the 
transaction  at  the  time  it  took  place,  solely  upon  the  ground 
that  the  land  turned  out  to  be  of  less  value  than  was  agreed 
upon.^^ 

§  403.  When  Equity  Is  Without  Jurisdiction,  Generally. 

If  the  complainant  has  no  right  to  any  equitable  relief  what- 
ever a  suit  will  not  be  retained  in  equity  in  order  to  give  legal  re- 
Hef.^^  And  equity  has  no  jurisdiction  to  fix  a  schedule  of  prices 
to  be  charged  by  a  public  warehouseman  for  receiving,  storing 
and  handling  goods,  and  in  the  absence  of  any  other  ground  of 
equitable  relief  will  not  assume  jurisdiction,  merely  on  the 
question  of  the  reasonableness  of  the  rates.^^  So  a  decree  in 
chancery  will  not  issue  to  compel  a  railroad  company,  without 
power  express  or  implied  to  own  and  operate  a  public  ware- 
house, to  contract  with  a  third  person  to  carry  on  the  business.^^ 
Nor  can  equity  adjudge  a  forfeiture  of  property  under  the  Anti- 
trust Act  of  1890.1' 

§  404.  Equity  Jurisdiction— Parties,  Generally.^^ 

The  general  rule  in  equity  is  that  all  persons  materially  in- 

12  Davenport  v.  Piano  Imp.  Co.,  79  111.  App.  161,  2  Chic.  L.  J.  Wkly.  258. 
When  stockholder  may  and  may  not  sue  in  equity,  see  §  268,  herein. 

13  Bank  of  Fort  Madison  v.  Alden,  129  U.  S.  372,  9  Sup.  Ct.  332,  32  L.  ed. 
725.    See  §  298,  herein. 

14  Boston  Blower  Co.  v.  Carman  Lumber  Co.,  94  Va.  94,  26  S.  E.  390. 

15  Gulf  Compress  Co.  v.  Harris,  Cortner  &  Co.,  108  Ala.  343,  48  So.  577. 
See  §  145,  herein. 

18  People  V.  Illinois  Central  Rd.  Co.,  233  111.  378,  122  Am.  St.  Rep.  181, 
84  N.  E.  368. 

17  United  States  v.  Addyston  Pipe  &  Steel  Co.,  83  Fed.  271,  54  U.  S.  App. 
723,  29  C.  C.  A.  141,  46  L.  R.  A.  122.    See  §  186,  herein;  .see  also  as  to  this 
statute,  note  43  to  §  11,  herein;  see  also  as  to  Antitrust  Acts  the  next  fol- 
lowing chapter,  herein. 
•     18  See  §§  229,  268,  269,  422,  herein. 

648 


EQUITABLE    REMEDIES  §  404 

terested,  either  legally  or  beneficially,  in  the  subject-matter  of 
a  suit  are  to  be  made  parties  to  it ;  and  the  estabhshed  practice 
of  courts  of  equity  to  dismiss  the  plaintiff's  bill  if  it  appears  that 
to  grant  the  relief  prayed  for  would  injuriously  affect  persons 
materially  interested  in  the  subject-matter,  who  are  not  made 
parties  to  the  suit,  is  founded  upon  clear  reasons,  and  may  be 
enforced  by  the  court,  sua  sponte,  though  not  raised  by  the 
pleadings  nor  suggested  by  counsel.^*^  So  acts  in  excess  or 
abuse  of  corporate  franchises  and  privileges  resulting  in  private 
injuries  may  be  restrained  at  the  suit  of  private  parties.^"  And 
a  person  in  possession,  claiming  title  under  a  tax  deed  under 
which  he  had  obtained  title,  may  institute  a  suit  in  equity 
to  quiet  title  and  remove  a  cloud,  where  the  State  statute  has 
enlarged  the  ordinary  equitable  action  in  such  a  suit.^^  So  a 
person  in  possession  of  the  surface  of  a  mining  claim  under  a 
patent  from  the  United  States  is  presumably  in  possession  of 
all  beneath  the  surface  and  ^^  may  maintain  an  action  in  equity 
to  quiet  title  to  a  vein  beneath,  and  to  enjoin  the  removal  of 
ore  therefrom  .^^ 

In  case  a  State  has  constructed  lines  of  railroad  and  canal, 
and  other  means  of  travel  and  transportation,  which  would  be 
injured  in  their  revenues  by  an  obstruction  in  a  navigable  river, 
created  by  a  bridge  structure,  it  has  a  sufficiently  direct  interest 
to  sustain  an  application  to  the  Federal  Supreme  Court  in  the 
exercise  of  original  jurisdiction,  for  an  injunction  to  remove 
the  obstruction.^^     But  where  it  is  proposed  to  construct  or 

19  Minnesota  v.  Northern  Securities  Co.,  184  U.  S.  199,  46  L.  ed.  499,  22 
Sup.  Ct.  308. 

20  Madison,  City  of,  v.  Madison  Gas  &  Electric  Co.,  129  Wis.  249,  108  N. 
W.  65,  citing  numerous  cases. 

21  Bardon  v.  Land  &  River  Improv.  Co.,  157  U.  S.  327,  15  Sup.  Ct.  650,  39 
L.  ed.  719. 

22  Under  §3511,  Rev.  Stat.  Utah. 

23  Lawson  v.  United  States  Mining  Co.,  207  U.  S.  1,  51  L.  ed.  933,  27 
Sup.  Ct.  585,  following  Holland  v.  Challen,  110  U.  S.  15,  28  L.  ed.  52,  3  Sup. 
Ct.  427,  distinguishing  Boston  &  Montana  Consol.  Copper  &  Silver  Min. 
Co.  v.  Montana  Ore  Purchasing  Co.,  188  U.  S.  632,  47  L.  ed.  626,  23  Sup. 
Ct.  434. 

24  Pennsylvania  v.  Wheeling  &  Belmont  Bridge  Co.,  13  How.  (54  U.  S.) 
518,  14  L.  ed.  249. 

649 


§  404  EQUITABLE    REMEDIES 

extend  a  street  railroad  from  one  town  to  another,  which  would 
parallel  a  steam  railroad,  the  latter  has  not  sufficient  interest 
to  entitle  it  to  an  injunction  to  restrain  such  construction  or 
extension,  merely  upon  the  ground  that  the  line  deviates  from 
the  route  authorized  by  the  charter  of  the  companies  proposing 
to  build  such  street  railway  lines,  but  if  the  finding  of  public 
convenience  and  necessity,  required  by  the  statute  in  such 
cases,  has  not  been  made,  then  the  railway  company,  whose  line 
would  be  paralleled,  has  sufficient  interest  to  maintain  an  action 
to  enjoin  such  construction  or  extension/^  Again,  any  member 
of  a  mutual  insurance  company  suing  for  himself  and  others 
similarly  situated,  may  invoke  equity  jurisdiction  to  redress  or 
prevent  any  wrong  injuriously  affecting  the  property  rights  of 
the  corporation  when  its  officers  will  not  move  appropriately 
to  that  end.^ 

In  determining  to  what  extent  a  court  of  equity  will  permit 
a  stockholder  to  maintain  a  suit  nominally  against  a  corpora- 
tion, but  really  for  its  benefit,  the  court,  where  a  bill  is  filed  by 
a  stockholder  to  enjoin  the  officers  of  a  corporation  from  pay- 
ing a  tax  as  required  by  a  statute  of  the  United  States,  will 
examine  the  bill  in  its  entirety  and  determine  whether,  under 
all  circumstances,  the  plaintiff  has  made  such  a  showing  of 
wrong  on  the  part  of  the  corporation  as  will  justify  the  suit, 
and,  if  it  appears  that  the  suit  is  collusive  or  that  the  plaintiff 
has  not  done  everything  which  ought  to  have  been  done  to 
secure  action  by  the  corporation  and  its  directors,  and  justify, 
under  the  assumption  of  a  controversy  between  himself  and  the 
corporation,  his  prosecution  of  a  litigation  for  his  benefit  the 
bill  will  be  dismissed .^^ 

Where  the  owner  of  the  compress  and  warehouse  leased  the 

25  New  England  R.  Co.  v.  Central  R.  &  E.  Co.,  69  Conn.  47,  36  Atl.  1061. 

28  Huber  v.  Martin,  127  Wis.  412,  105  N.  W.  1031,  1135,  115  Am.  St.  Rep. 
1023,  3  L.  R.  A.  (N.  S.)  653. 

27  Corbus  V.  Alaska  Treadwell  Gold  Min.  Co.,  187  U.  S.  455,  47  L.  ed.  256, 
23  Sup.  Ct.  157,  holding  that  Pollock  v.  Farmers'  Loan  &  Trust  Co.,  157 
U.  S.  429,  39  L.  ed.  759,  15  Sup.  Ct.  673,  does  not  determine  the  extent  to 
which  a  court  of  equity  will  proceed  in  such  a  case.  See  Stewart  v.  Wash- 
ington &  Alaska  Gold  Min.  Co.,  187  U.  S.  466,  47  L.  ed.  261,  23  Sup.  Ct.  161. 

650 


EQUITABLE    REMEDIES  §  405 

same  to  a  corporation  engaged  in  a  general  storage  and  com- 
press business  for  a  term  of  years,  and  a  schedule  of  maximum 
charges  were  fixed  in  the  lease,  a  third  person  engaged  in  the 
business  of  buying  and  selling  and  shipping  cotton  at  that  point 
had  no  such  interest  in  the  lease  as  would  entitle  him  to  enforce 
the  provisions  fixing  the  maximum  charges,  nor  was  he  en- 
titled in  equity  to  compel  the  corporation  to  comply  with  such 
provision  on  the  ground  that  the  contract  was  made  for  his 
benefit.^*  If  a  reformation  of  and  the  recovery  of  the  amount 
due  upon  an  insurance  policy  is  sought,  it  is  not  necessary  to 
make  the  insured  and  the  payee,  as  interest  should  appear, 
parties  to  such  suit  where  both  have  transferred  their  right,  title 
and  interest  to  an  assignee .^'^  Reformation  of  a  contract  of 
pledge  may  be  decreed  against  a  bankrupt  and  his  assignee  upon 
a  suit  instituted  against  the  pledgor  after  his  bankruptcy.^" 

Where  a  plaintiff,  suing  as  a  stockholder  of  a  street  railroad 
corporation,  claims  in  his  complaint  that  he  has  been  defrauded 
of  a  portion  of  his  interest  in  the  corporate  assets  by  means  of  a 
lease  made  by  the  directors  and  approved  by  the  vote  of  a  re- 
quired number  of  stockholders,  and  seeks  to  set  aside  the  lease, 
to  compel  the  transfer  of  all  the  property  covered  by  the  lease, 
and  to  require  the  lessee  to  account  to  the  lessor  for  all  moneys 
received  from  the  operation  of  the  road,  the  action  is  not  for  the 
benefit  of  the  plaintiff  alone,  but  is  representative  in  character, 
and  for  the  benefit  of  the  plaintiff  and  all  other  stockholders 
similarly  situated .^^ 

§  405.  What  Is  Not  and  Is  a  Condition  Precedent  to  Suit — 
Quieting  Title — Specific  Performance. 

Although  a  Code  provision  requires  existing  corporations  to 
file  a  certified  copy  of  its  articles  of  incorporation  in  the  office 
of  the  county  clerk  of  every  county  in  the  State  except  the 
county  where  the  original  articles  of  incorporation  are  filed,  a 

28  Gulf  Compress  Co.  v.  Harris,  Cortner  &  Co.,  108  Ala.  343.  48  So.  577. 

29  Benesh  v.  Mill  Owners'  Mut.  F.  Ins.  Co.,  103  Iowa,  465,  72  N.  W.  674. 

30  First  Nat.  Bank  v.  Bacon,  98  N.  Y.  Supp.  717,  113  App.  Div.  612. 

31  Flynn  v.  Brooklyn  City  R.  R.  Co.,  158  N.  Y.  493,  53  N.  E.  520,  aff'g  41 
N.  Y.  Snpp.  566,  9  App.  Div.  269.     See  §  257,  note  75. 

651 


&  406  EQUITABLE    REMEDIES 

corporation  which  had,  prior  to  the  enactment  of  said  Code  pro- 
vision, substantially  complied  with  the  then  law  by  fihng  its 
original  certificate  of  incorporation  in  the  county  wherein  its 
principal  place  of  business  was  located,  and  had  also  before  said 
Code  enactment  acquired  title  to  land,  may  subsequently  main- 
tain an  action  to  quiet  title  to  the  land  as  it  is  within  the  ex- 
ception above  stated  .^^ 

If  specific  performance  is  sought  and  a  statute  provides  that 
no  corporation  shall  have  or  exercise  any  corporate  powers  until 
a  bonus  tax  is  paid  on  the  amount  of  its  capital  stock,  it  has 
not  until  such  tax  is  paid  such  a  legal  existence  as  to  entitle  it 
to  maintain  a  suit,  even  though  it  is  hable  in  an  action  by  the 
State  to  recover  such  tax;  nor  will  such  corporation  be  en- 
titled to  prosecute  a  suit,  although  it  pays  such  tax  -after  the 
suit  is  instituted .^^ 

§  406.  Equity— Adequate  Remedy  at  Law.^^ 

When  a  judicial  act  is  in  any  particular  contrary  to  the  prin- 
ciples of  equity,  the  fact- that  there  may  be  a  remedy  at  law  on 
other  grounds  is  not  generally  a  sufficient  reason  to  prevent 
equity  from  interposing  its  appropriate  remedy  on  grounds  not 
available  at  law.^^  So  although  a  township  ordinance  granting 
powers  and  franchises  to  a  street  railway  corporation  provides 
that  the  township  may  adjudge  a  breach  of  duties  and  obliga- 
tions and  declare  a  forfeiture,  an  order  passed  pursuant  thereto, 
declaring  a  forfeiture  and  decreeing  a  sale  of  the  corporate 
property,  is  judicial  in  its  character,  and  equity  has  the  same 
power  to  intervene  and  modify  the  proceeding  as  it  would  have 

32  San  Diego  Gas  Co.  v.  Frame,  148  Cal.  252,  82  Pac.  1049.  See  §§  198, 
237,  herein. 

Conditions  precedent  to  suit:  demand  upon  and  refusal  of  corporate  au- 
thorities; exhausting  remedies.    See  §§  301-312,  herein. 

33  Maryland  Tube  &  Iron  Works  v.  West  End  Improv.  Co.,  87  Md.  207, 
39  Atl.  620,  39  L.  R.  A.  810,  a  case  of  a  bill  for  specific  performance  of  an 
agreement  to  convey  land. 

34  See  §§  163-165,  herein. 

35  North  Jersey  St.  Ry.  Co.  v.  South  Orange,  58  N.  J.  Eq.  S3,  43  Atl.  53. 

Mere  apprehension  that  judgment  at  law  will  not  be  available  is  insuffi- 
cient to  give  equity  jurisdiction.  See  Strang  v.  Richmond  P.  &  C.  R.  Co. 
(U.  S.  C.  C),  93  Fed.  71. 

652 


EQUITABLE    REMEDIES  §  407 

to  interfere  in  a  proceeding  in  a  court  of  law.^  But  a  court  of 
equity  is  without  jurisdiction  to  grant  relief  against  a  public 
warehouseman  exacting  overcharges  for  storage,  since  an  action 
for  money  had  and  received  gives  a  complete  and  adequate 
relief.  So  unless  jurisdiction  is  conferred  by  statute,  a  court 
of  equity  is  without  jurisdiction  of  a  cause  where  a  plain  and 
adequate  legal  remedy  exists;  and  where  a  wrong  can  be  com- 
pensated by  money,  a  court  of  equity  will  not  assume  jurisdic- 
tion because  of  such  adequate  legal  remedy;  where  the  question 
is  one  of  damages  to  individual  or  property  rights,  the  damage 
must  be  in  its  nature  irreparable  or  incapable  of  money  measure- 
ment, to  warrant  the  assumption  of  jurisdiction  by  a  court  of 
equity,  unless  coupled  with  some  other  independent  matter  of 
equitable  cognizance.^'' 

Nor  has  a  court  of  equity  jurisdiction  to  enforce  the  collection 
of  tolls  by  a  bridge  company  from  a  street  railway  company 
which  has  a  charter  right  to  use  the  bridge  of  the  bridge  com- 
pany, merely  because  a  decree  had  been  entered  fourteen  years 
before  at  the  instance  of  the  bridge  company,  fixing  a  certain 
rate  of  tolls  to  be  paid  by  the  railway  company  for  a  period  of 
five  years.  Such  tolls  in  arrears,  like  rent  in  arrears,  can  only 
be  collected  in  an  action  at  law.^^  And  no  adequate  remedy  at 
law  exists  to  redress  the  wrong  done  to  a  railroad  company  by 
wrongfully  dealing  in  vast  numbers  of  its  nontransferable  rate 
excursion  tickets  which  will  deprive  the  company  of  its  right  to 
resort  to  equity  to  restrain  such  wrong  dealings.^^ 

§  407.  Contract  for  Co-operation  in  Procuring  Munici- 
pal Franchise — Validity  of — Public  Policy — Equity^When 
Remedy  at  Law  Adequate — Illustration. 

In  a  case  in  the  Federal  Supreme  Court  the  following  facts 
appeared:  H.  and  S.  were  engaged  separately,  each  on  behalf  of 

36  North  Jersey  St.  Ry.  Co.  v.  South  Orange,  58  N.  J.  Eq.  83,  43  Atl.  53. 

37  Gulf  Express  Co.  v.  Harris,  Cortner  &  Co.,  108  Ala.  343,  48  So.  577. 

38  Pittsburg  &  West  End  Ry.  Co.  v.  Point  Bridge  Co.,  223  Pa.  133,  72 
Atl.  348. 

39  Bitterman  v.  Louisville  &  Nashville  Ry.  Co.,  207  U.  S.  205,  206,  aff'g 
144  Fed.  34. 

653 


§  407  EQUITABLE    REMEDIES 

himself  and  his  associates,  in  seeking  from  the  city  government 
of  Richmond  a  concession  for  a  street  railway  with  collateral 
lines.  H.'s  organization  was  to  be  called  the  Richmond  Con- 
duit Company  and  Shield's  the  Richmond  Traction  Company. 
H.  made  a  deposit  of  money  in  a  bank  in  Richmond  to  aid  in  his 
projects.  H.  and  S.  then  contracted  in  writing  as  follows,  each 
being  fully  authorized  thereto  by  his  associates:  "We  hereby 
bind  ourselves,  in  our  own  behalf  and  for  our  associates,  mutu- 
ally to  co-operate  one  with  the  other  in  securing  a  franchise  for 
said  railway  and  to  divide  equally  between  us  and  our  associates 
whatever  may  be  realized  from  the  enterprise,  first  deducting 
from  said  amount  whatever  actual  expense  may  have  been 
incurred  by  either  side,  such  expenses  to  be  paid  out  of  the  first 
money  realized  from  said  enterprise.  The  deposit  already  made 
with  the  State  Bank  of  Richmond,  by  Hyer  and  his  associates, 
is  to  stand  and  remain  intact  as  it  now  is  for  the  purpose  of 
securing  the  franchise  aforesaid,  subject  to  any  conditions  for 
the  withdrawal  thereof  made  by  Hyer  with  the  depositor  after 
the  seventeenth  day  of  August,  1895;  and  further;  it  is  agreed 
that  the  application  and  franchise  to  be  presented  to  the  com- 
mon council  of  the  city  of  Richmond  shall  be  that  of  the  Rich- 
mond Traction  Company,  for  the  building  of  an  overhead  trolley 
railway  or  cable  system."  A  full  statement  of  the  action  of  the 
two  companies  was  made  to  the  Richmond  authorities.  H. 
fully  performed  his  agreements.  He  was  unable  to  go  to 
Richmond  when  the  matter  was  settled,  and  S.  secured  the  con- 
cession for  himself  and  his  associates,  and  refused  to  permit 
H.  and  his  associates  to  participate  in  it.  By  bill  in  equity, 
amended  bill  and  supplemental  bill,  H.  sought  to  be  declared 
owner  in  one-half  interest  in  the  traction  company's  franchise, 
property  and  stock,  and  for  a  decree  securing  the  possession  and 
enjoyment  thereof.  It  was  held  that,  without  deciding  whether 
the  contract  sued  on  was,  under  the  facts  and  circumstances 
disclosed,  void  as  against  public  policy,  the  case  presented  was 
not  one  which  called  for  the  interposition  of  a  court  of  equity; 
but  that  the  plaintiff's  remedy  was  by  an  action  at  law.'*'' 
40  Hyer  v.  Richmond  Trac.  Co.,  168  U.  S.  471,  42  L.  ed.  547,  13  Sup.  Ct.  14- 

654 


EQUITABLE    REMEDIES  §408 

§  408.  Adequate  Statutory  Remedy — Application  to  Mu- 
nicipal Body  as  Condition  Precedent  to  Equity  Suit— Rate 
Regulation. 

It  is  a  general  rule  that  a  party  must  exhaust  all  his  legal 
remedies  before  he  is  entitled  to  redress  in  a  court  of  equity.'*^ 
While  this  rule  has  application  to  legal  remedies  enforceable 
in  an  action  at  law,  there  seems  to  be  no  good  reason  why  the 
general  principle  may  not  be  extended  so  as  to  require  parties 
who  are  afforded  by  statute  an  opportunity  to  obtain  adequate 
relief  by  application  to  a  legislative  or  administrative  municipal 
body,  like  a  Board  of  Supervisors,  with  reference  to  the  very 
matter  of  which  they  complain  in  an  action  in  equity,  to  seek 
that  relief  from  such  body  before  being  permitted  to  maintain 
an  equitable  action  for  such  purpose.  And  this  applies  where 
a  water  company  seeks  to  have  orders,  establishing  maximum 
water  rates,  made  by  a  Board  of  Supervisors,  declared  void,  and 
to  enjoin  the  defendants  from  attempting  to  put  in  force  or  en- 
forcing the  rates  established  by  them,  on  the  ground  that  the 
same  are  unfair  and  unreasonable,  and  the  plaintiff  has,  under 
a  statute,  the  right  to  have  them  changed  or  modified  in  the 
first  instance  by  application  to  the  Board  of  Supervisors  of  the 
county,  and  has  had  ample  opportunity  to  do  so,  without  ap- 
plying to  a  court  of  equity  for  redress.  But  such  a  company  is 
entitled  to  a  fair  and  reasonable  compensation,  that  is,  to  a  fair 
return  on  the  reasonable  value  of  his  property  at  the  time  it  is 
being  used  for  the  public  benefit,^  and  while  a  statute  makes  it 
the  duty  of  said  Board  of  Supervisors  to  establish  this  fair  com- 
pensation by  just  and  reasonable  rates,  still,  if  it  does  not  do 
so  originally,  a  court  of  equity  may,  where  such  enactment 
makes  the  rates  first  established  unalterable  for  at  least  a  year, 
be  resorted  to  at  once  by  the  aggrieved  person  or  corporation 
to  have  the  order  establishing  them  declared  null  and  void.  All 
that  the  court  of  equity  can  do,  however,  in  such  case,  is  to  de- 
cree that  the  established  rates  are  unreasonable  and  restrain 


«See  §§301-312,  herein. 

42  See  on  this  last  point  §  34,  herein. 

655 


§  409  EQUITABLE    REMEDIES 

their  collection.  It  has  no  power  to  establish  rates  ^^  or  to  re- 
strain the  Board  of  Supervisors  from  again  fixing  them  so  that 
the  mere  annulment  of  the  order  would  be  all  that  equity  would 
accomplish.  But  if  more  than  a  year  had  elapsed  and  the 
corporation  affected  by  the  establishment  of  such  rates  has 
made  no  attempt,  by  petition  to  said  board,  as  provided  by 
statute,  for  readjustment  of  the  rates,  its  action  in  equity  cannot 
be  maintained,  as  above  stated  ."^^ 

§  409.  Irreparable  Injury. 

When  a  city  attempts  to  destroy,  by  enforcement  of  an 
ordinance,  the  franchise  of  a  railroad  company  in  which  the 
public  has  an  interest,  and  where  the  injury  to  the  company 
will  be  irreparable,  the  validity  of  the  franchise  depending  upon 
the  construction  of  a  grant  from  the  city  authorized  by  the 
company's  charter,  the  railroad  company  need  not  establish 
its  right  at  law  before  equity  will  interfere  by  injunction  to  re- 
strain the  enforcement  of  the  ordinance;  the  construction  of  the 
grant  being  for  the  court,  the  right  of  the  company  is  not  in  law 
doubtful.'*^  And  where  a  bridge  over  a  navigable  river  is  a 
nuisance,  if  the  obstruction  is  unlawful  and  the  injury  irrepara- 
ble, by  a  suit  at  common  law,  the  injured  party  may  claim  the 
extraordinary  protection  of  a  court  of  equity .^^ 

A  dealer  cannot  invoke  equity  to  restrain  the  asking  and 
collecting  of  overcharges  on  the  theory  that  he  will  suffer 
irreparable  injury,  where  such  overcharges  are  too  small  to 
warrant  the  conclusion  that  the  dealer's  business  would  be 

«  As  to  this  last  point  see  §  145,  herein. 

«San  Joaquin  &  Kings  River  Canal  &  Irrig.  Co.  v.  Stanislaus,  155  Cal. 
21,  99  Pac.  365,  considering  San  Diego  Land  &  Town  Co.  v.  Jasper,  189 
U.  S.  439,  441,  23  Sup.  Ct.  571,  47  L.  ed.  892  (where  the  same  statute  was 
considered). 

Where  redress  must  first  be  sought:  jurisdiction  of  courts;  interstate  com- 
mission; rates  injunction,  see  §  134,  herein;  same  as  to  railroad  commis- 
sions, see  §  151,  herein. 

«  Syllabus  in  Port  of  Mobile  v.  Louisville  &  Nashville  R.  Co.,  84  Ala.  116, 
4  So.  106,  5  Am.  St.  Rep.  ,342. 

«  Pennsylvania  v.  Wheeling  &  Belmont  Bridge  Co.,  13  How.  (54  U.  S.) 
518,  14  L.  ed.  249. 

656 


EQWTABLE    REMEDIES  §  410 

ruined  thereby,  and  hence,  the  dealer  is  not  entitled  to  injunc- 
tive relief.^''  Before  a  court  of  equity  will  in  any  way  aid  a 
party  to  thwart  the  intent  of  Congress,  as  expressed  in  a  statute 
requiring  payment  of  a  tax,  it  should  affirmatively  and  clearly 
appear  that  there  is  an  absolute  necessity  for  its  interference 
in  order  to  prevent  irreparable  injury.  And  if  the  party 
primarily  and  directly  charged  with  a  tax  is  unable  to  make  a 
case  for  the  interference  of  a  court  of  equity  no  one  subordi- 
nately  and  indirectly  affected  by  the  tax  should  be  given  relief 
unless  he  shows  not  merely  irreparable  injury  to  the  tax  debtor 
as  well  as  to  himself,  but  also  that  he  has  taken  every  essential 
preliminary  step  to  justify  such  claim  of  right  to  act  in  behalf 
of  such  tax  debtor."** 

§  410.  Multiplicity  of  Suits. 

The  i)revention  of  a  multiplicity  of  suits  and  actions  is  a  well- 
known  ground  of  equity  jurisdiction.  So  where  there  is  a  case 
of  common  interest  in  all  of  the  plaintiffs  against  the  defendant 
for  an  alleged  wrong  committed  by  the  defendant  against  all 
of  the  plaintiffs,  the  above  principle  appHes.^*'  Thus,  where 
there  is  a  continuing  trespass  by  a  number  of  parties  and  an 
action  at  law  could  only  determine  a  particular  controversy  at 
a  particular  time,  a  court  of  equity  may  meet  such  an  unusual 
emergency  and  by  comprehensive  decree  determine  finally  the 
controversy  between  the  parties,  and  conserve  the  public  in- 
terests. So  a  railroad  company  can  maintain  a  suit  against 
hackmen  combined  together  in  disregard  of  its  regulations,  and 
enjoin  them  from  congregating  upon  the  sidewalk,  adjacent  to 
its  terminal  in  a  city,  so  as  to  interfere  with  the  ingress  and 
egress  of  passengers.  .But  the  rights  of  a  railroad  company  as 
abutting  owner  of  the  sidewalks  adjacent  to  the  property  on 
which  its  station  stands  and  those  of  its  passengers  are  not 
paramount  to  the  rights  of  the  general  public  to  legitimately  use 

47  Gulf  Compress  Co.  v.  Harris,  Cortner  &  Co.,  108  Ala.  343,  48  So.  577. 
«  Corbus  V.  Alaska  Treadwell  Gold  Min.  Co.,  187  U.  S.  455,  47  L.  ed.  256, 
23  Sup.  Ct.  157. 
«  Breimeyer  v.  Star  Bottling  Co.,  136  Mo.  App.  84,  117  S.  W.  119. 

42  657 


§  410  EQUITABLE    REMEDIES 

the  sidewalk,  and  licensed  hackmen,  unless  forbidden  by  local 
regulations  maj^,  within  reasonable  limits,  use  a  public  side- 
walk in  properly  prosecuting  their  calling,  so  long  as  such  use 
does  not  obstruct  others  in  legitimately  using  it  upon  equal 
terms .^"  But  a  complainant  who  can  obtain  all  the  relief  to 
which  he  is  entitled  in  a  single  suit  cannot  invoke  the  inter- 
ference of  a  court  of  equity  on  the  ground  that  defendant  may 
be  saved  a  multij^licity  of  suits  against  it  by  others  situated 
similarly  to  himself  .^^  And,  as  a  person  engaged  in  the  business 
of  buying  and  selling  cotton  who  pays  overcharges  for  the  stor- 
age of  cotton  in  a  public  warehouse,  may  recover  in  one  action 
all  of  the  overcharges  paid  for  the  cotton  season,  or  may  main- 
tain several  actions  at  law  therefor,  equity  is  without  jurisdic- 
tion to  give  relief  on  account  of  preventing  a  multiplicity  of 
suits  .^2 

Again,  where  the  defendant  gathers  together  the  bottles  and 
siphons  of  different  several  plaintiffs  indiscriminately,  and, 
using  them  as  its  own,  refills  them  with  its  product,  and  puts 
this  product  upon  the  market  at  a  lower  price  than  it  is  possible 
for  the  plaintiffs  to  do,  by  reason  of  the  fact  that  the  defendant 
is  able  to  buy  up  such  bottles  or  get  possession  of  them  at  a  very 
low  figure  and  unfair  competition  results  by  thus  using  the 
several  plaintiffs'  containers  and  selling  to  the  public  goods  not 
the  manufacture  of  plaintiffs,  and  of  an  inferior  quality,  a 
wrong  is  presented,  the  redress  of  which  is  peculiarly  within  the 
power  of  a  court  of  equity,  and  allegations  in  a  petition  to  sub- 
stantially the  above  effect,  set  out  a  case  of  an  injury  against 
each  and  all  of  the  plaintiffs  indiscriminately,  for  which  they 
have  a  common  remedy /^^  Multiplicity  of  suits  as  the  ground 
of  an  action  in  equity,  brought  by  a  receiver  to  recover  losses 
sustained  by  a  corporation  by  reason  of  the  negligent  and 

50  Donovan  v.  Pennsylvania  Co.,  199  U.  S.  279,  26  Sup.  Ct.  91,  50  L.  ed. 
192,  cited  in  Bitterman  v.  Louisville  &  Nashville  Rd.  Co.,  207  U.  S.  205, 
228,  52  L.  ed.  171,  28  Sup.  Ct.  91. 

51  Equitable  Life  Assurance  Soc.  v.  Brown,  213  U.  S.  25,  53  L.  ed.  682,  29 
Sup.  Ct.  404,  rev'g  151  Fed.  1. 

52  Gulf  Compress  Co.  v.  Harris.  Cortner  &  Co.,  108  Ala.  343,  48  So.  577. 

53  Breimeyer  v.  Star  Bottling  Co.,  136  Mo.  App.  84,  117  S.  W.  119- 

658 


EQUITABLE    REMEDIES  §§   111,  412 

wrongful  acts  of  its  directors,  is  not  sufiicicntly  shown  by  tho 
fact  that  all  the  directors  holding  office  during  the  period  of 
time  over  which  the  losses  and  claimed  negligent  and  wrongful 
acts  extended  cannot  be  made  defendants  in  one  suit  and  that 
said  acts  are  in  number  and  character  such  as  to  necessitate  a 
discovery;  such  an  action  should  be  brought  at  law.^'' 

§411.  Fraud  and  Trusts. 

Fraud  and  trusts  are  also  subjects  peculiarly  within  the 
jurisdiction  of  courts  of  equity,  and  the  relief  granted  in  a 
proper  case  will  be  comprehensive.^^  A  court  of  ecjuity  also 
has  jurisdiction  to  prevent  a  threatened  breach  of  trust  in  the 
misapplication  or  diversion  of  the  funds  of  a  corporation  by 
illegal  payments  out  of  its  capital  or  profits .^^ 

§  412.  Reformation  of  or  Relief  from  Written  Instru- 
ments or  Contracts. 

The  jurisdiction  of  equity  to  reform  written  instruments, 
where  there  is  a  mutual  mistake,  or  mistake  on  one  side  and 
fraud  or  inequitable  conduct  on  the  other,  is  undoubted,  but  to 
justify  such  reformation  the  evidence  must  be  sufficiently 
cogent  to  satisfy  the  mind  of  the  court,  and  this  applies  to 
corporations."  So  where,  by  mistake,  accident  or  inadvertence, 
a  policy  of  insurance  does  not  correctly  set  forth  the  contract 
personally  made  between  the  parties,  equity  may  reform  it  so  as 

54  Dykman  v.  Keeney,  154  N.  Y.  483,  48  N.  E.  894,  rev'g  47  N.  Y.  Supp. 
352,  21  App.  Div.  114. 

55  National  Tradesmen's  Bank  v.  Wetmore,  124  N.  Y.  241,  35  N.  Y.  St. 
Rep.  316,  26  N.  E.  548. 

58  Pollock  V.  Farmers'  Loan  &  Trust  Co.,  157  U.  S.  429,  39  L.  ed.  759,  15 
Sup.  Ct.  673.  This  case  is  held  not  to  determine  to  what  extent  a  court  of 
equity  will  permit  a  stockholder  to  maintain  a  suit  nominally  against  but 
really  for  its  benefit.  Corbus  v.  Alaska  Treadwell  Gold  Min.  Co.,  187  U.  S. 
455,  47  L.  ed.  256,  23  Sup.  Ct.  157. 

57  Simmons  Creek  Coal  Co.  v.  Doran,  142  U.  S.  417,  35  L.  ed.  1063.  12 
Sup.  Ct.  239.  See  Nebraska  Loan  &  Trust  Co.  v.  Ignowski,  54  Neb.  398,  74 
N.  W.  852. 

Mistake  of  law  without  mistake  of  fact  no  ground  for  reformation  where  no 
fraud,  etc.  Deseret  Nat.  Bank  v.  Burton,  17  Utah,  43,  53  Pac.  215.  See 
Wisconsin  Marine  &  F.  Ins.  Co.  Bank  v.  Mann,  100  Wis.  596,  76  N.  W.  777. 

659 


§  412  EQUITABLE    REMEDIES 

to  ex|)rcss  the  real  agreement/'*  But  reformation  of  a  contract 
of  insurance  will  not  be  decreed  where  the  insurer's  agent  who 
entered  into  said  contract  had  no  authority  in  the  premises  to 
make  said  contract  in  the  form  in  which  it  was  made/^ 

The  jurisdiction  of  a  court  of  equity  will  also  be  maintained 
in  a  suit  to  determine  title,  when  a  part  of  the  remedy  sought 
is  to  supply  what  was  by  mistake  omitted  from  one  of  the  title 
deeds;  or  to  establish  a  lost  deed,  even  though  in  the  latter  case 
proof  of  the  fact  might  have  been  allowed  to  be  made  in  an 
action  at  law.^°  And  where  a  reservation  of  a  railroad  right 
of  way  has  been  omitted  from  a  deed  of  land  reformation  may 
be  decreed  in  equity  on  the  ground  of  mutual  mistake.*'! 

So  where  a  suit  was  brought  by  a  bank  against  a  certain  party 
and  his  trustee  in  bankruptcy  to  procure  the  reformation  of  a 
written  contract  between  said  bank  and  the  bankrupt  regarding 
a  holding  of  certain  shares  of  stock  by  said  bank  as  collateral 
security  it  was  held  that,  the  jurisdiction  which  equity  has 
to  decree  correction  of  errors  in  written  contracts  caused  by 
mutual  mistake  is  not  suspended  by  the  bankruptcy  law;  and 
the  trustee  takes  property  as  the  debtor  had  it  at  the  time  of 
the  petition  subject  to  all  valid  claims,  liens  and  equities,  in- 
cluding the  power  of  a  court  of  equity  to  correct  a  manifest 
error  by  mutual  mistake  in  an  agreement  made  prior  to  the 
petition.  And  it  was  also  held  that  where  a  contract  is  reformed 
to  correct  a  mutual  mistake  and  make  it  conform  to  the  intent 
of  the  parties  a  new  lien  is  not  created,  but  the  original  lien 
is  adjudicated  and  determined.^^  i^  an  action  at  law  for  per- 
sonal injury  equity  may,  in  aid  thereof,  reform  a  release  not- 
withstanding a  claim  of  laches  in  instituting  the  action,  provided 

58  Thompson  v.  Phoenix  Ins.  Co.,  136  U.  S.  287.  See  New  York  Life  Ins. 
Co.  V.  McMaster  (U.  S.  C.  C),  87  Fed.  63,  57  U.  S.  App.  638,  30  C.  C.  A.  532. 

59  Vardemann  v.  Penn  Mut.  Ins.  Co.,  125  Ga.  117,  54  S.  E.  66. 

60  Simmons  Creek  Coal  Co.  v.  Doran,  142  U.  S.  417,  35  L.  ed.  1063,  12 
Sup.  Ct.  239. 

Reformation  of  unrecorded  deeds,  intervening  rights,  see  New  Orleans 
Canal  &  Bkg.  Co.  v.  Montgomery,  95  U.  S.  16,  24  L.  ed.  346. 

61  Dennis  v.  Northern  Pac.  Ry.  Co.,  20  Wash.  320,  55  Pac.  210. 

62  Zartman  v.  First  National  Bank,  216  U.  S.  134,  30  Sup.  Ct ,  54 

L.  ed.  — ,  aff'g  189  N.  Y.  533. 

660 


EQUITABLE    REMEDIES  §  413 

a  reasonable  excuse  therefor  exists  and  defendant  will  sustain 
no  loss  of  material  evidence.^'"' 

Again,  where  a  corporation,  which  had  entered  into  a  con- 
tract with  the  government,  received  notice  of  its  renewal, 
which,  among  other  things,  stated  that  no  application  for  such 
contracts  would  be  considered  from  persons  not  already  having 
one,  and  the  corporation  applied  for  and  received  a  renewal 
contract  which,  when  delivered,  contained  no  provision  for  not 
giving  contracts  to  persons  not  engaged  in  the  business  to  which 
the  contract  related,  and  during  its  life  such  a  contract  was 
given  to  such  a  person  and  the  corporation  sued  for  reformation 
of  the  contract,  on  the  ground  of  mutual  mistake  in  such  omis- 
sion, and  also  for  the  loss  of  profits  on  business  diverted  to  such 
person  it  was  held  that  although  jurisdiction  existed  to  refoim 
the  contract  there  was  no  such  mutual  mistake  as  to  justify 
the  reformation  asked.^^  So  where  each  and  all  of  the  indi- 
viduals who  organized  a  corporation  under  a  State  law  had 
knowledge  or  actual  notice,  of  a  defect  in  the  title  to  lands  ac- 
quired by  the  corporation  through  them,  their  knowledge  or 
actual  notice  is  knowledge  or  notice  to  the  company,  and  if 
constructive  notice  binds  them  it  binds  the  company ."^^  Equity 
may  also  on  the  ground  of  fraud  grant  relief  from  a  contract  to 
jjurchase  reissued  stock  induced  by  the  misrepresentations  of 
the  corporate  officers  concerning  the  existing  condition  of  said 
stock.^® 

§  413.  Accounting. 

An  action  lies  in  equity  for  an  accounting  in  favor  of  a  stock- 
holder against  a  corporation  to  ascertain  amounts  due  between 

63  Wabash  Ry.  Co.  v.  Lumley,  96  Fed.  773,  37  C.  C.  A.  584. 

M  United  States  v.  Milliken  Imprinting  Co.,  202  U.  S.  168,  26  Sup.  Ct. 
572,  50  L.  ed.  980,  rev'g  40  Ct.  CI.  81.  While  the  judgment  was  reversed 
upon  the  merits,  it  was  held  (the  action  being  in  the  court  of  claims  origi- 
nally) that  while  reformation  of  the  contract  is  not  an  incident  to  an  action 
at  law,  and  can  only  be  granted  in  equity  (under  §  1  of  act  of  March  3,  1887, 
24  Stat.  505)  the  court  of  claims  has  jurisdiction  to  reform  a  contract. 

65  Simmons  Creek  Coal  Co.  v.  Doran,  142  U.  S.  417,  35  L.  ed.  1063,  12 
Sup.  Ct.  239. 

66  Garrison  v.  Technic  Electrical  Works,  55  N.  J.  Eq.  708,  37  .A.tl.  741. 

661 


§  413  EQUITABLE    REMEDIES 

them;  ^^  to  determine  the  amount  of  profits  realized  by  a  corpo- 
ration from  the  use  of  a  cannery  of  its  debtor  held  under  an 
agreement  as  security  for  a  debt  due;  ^*  in  favor  of  the  owners 
of  an  interest  in  an  oil  lease  against  parties  owning  the  balance 
where  the  latter  kept  the  accounts;  ^^  at  the  suit  of  bank  de- 
positors against  directors  where  funds  have  been  wasted; '" 
in  favor  of  a  resident  stockholder  against  a  foreign  corporation 
and  its  officers  where  property  is  wrongfully  taken;  ^^  and 
where  there  are  mutual  accounts  and  accounts  on  one  side 
greatly  involved  and  complicated^'  The  court  may  also  re- 
quire a  receiver  to  account  for  funds  in  his  hands  and  may 
charge  him  with  interest  on  so  much  thereof  as  he  on  receiving 
deposited  in  a  bank  to  his  credit  as  receiver,  and  then  withdrew 
and  deposited  on  his  private  account  in  another  bank,  he  de- 
clining to  explain  the  transaction^^  And  where  a  bill  alleges 
that  complainant  has  paid  money  to  a  corporation  under  a  con- 
tract not  wholly  illegal,  supposing  it  was  legal  and  acting  in 
good  faith,  while  defendants  knew  that  the  business  to  be  trans- 
acted under  the  contract  was  a  cheat  and  a  fraud,  the  parties 
are  not  in  pari  delicto,  and  equity  has  jurisdiction  to  compel  an 
accountings^ 

So  a  demurrer  to  a  bill  on  the  ground  that  complainant  has 
an  adequate  remedy  at  law  should  be  overruled,  where  the  bill 
alleges  that  defendants,  the  directors  and  stockholders  of  a 
corporation,  conspiring  together,  obtained  complainant's  money 
by  means  of  fraud,  that  the  corporation  did  a  large  business,  is 

87  Schuetz  V.  German-American  Real  Estate  Co.,  47  N.  Y.  Supp.  500,  21 
App.  Div.  163. 

88  Peninsular  Trading  &  F.  Co.  v.  Pacific  Steam  Whaling  Co.,  123  Cal. 
689,  56  Pac.  604. 

69  Harrington  v.  Florence  Oil  Co.,  178  Pa.  St.  444,  35  Atl.  865. 

70  Meisse  v.  Loren,  6  Ohio  Dec.  258,  4  Ohio  N.  P.  100. 

71  Ernst  V.  Rutherford  &  B.  Springs  Gas  Co.,  56  N.  Y.  Supp.  403,  38  App. 
Div.  389. 

72  Gleason  Mfg.  Co.  v.  Hoffman,  168  111.  25,  48  N.  E.  143,  aflf'g  63  111. 
App.  294. 

73  Hinckley  v.  Railroad  Co.,  100  U.  S.  153,  25  L.  ed.  591. 

74  Edwards  v.  Michigan  Tontine  Investment  Co.,  132  Mich.  1,  92  N.  W. 
491. 

662 


EQUITABLE    REMEDIES  §  414 

insolvent,  that  defendants  have  converted  the  money  taken  in 
by  the  corporation,  and  prays  for  an  accounting,  and  an  ex- 
amination of  the  books7''  Equity  also  has  power  to  modify  a 
decree  directing  an  accountings^ 

§  414,  Corporation  Mortgages— Enforcement  of— Fore- 
closure—Rights  and  Remedies  of  Parties —General  In- 
stances. 

Limitations  upon  the  power  of  a  trustee  in  a  railroad  mort- 
gage to  take  proceedings  to  enforce  payment  of  the  amount  se- 
cured should  be  construed  strictly."  If  holders  of  notes,  of  a 
corporation,  secured  by  mortgage  of  its  realty,  agree  to  convert 
their  notes  into  stock  upon  a  condition  which  fails,  the  right 
to  foreclose  the  mortgage  is  not  affected  by  the  agreements* 

A  mortgage,  given  to  secure  a  large  number  of  bonds,  pro- 
vided that  the  bonds  should  become  payable  if  any  execution 
should  be  sued  out  against  the  property  of  the  company,  and 
such  company  should  not  forthwith  pay  the  same.  A  bond- 
holder brought  suit  before  a  justice  of  the  peace  upon  six 

75  Edwards  v.  Michigan  Tontine  Investment  Co.,  132  Mich.  1,  92  N.  W. 
491.  The  court  in  the  principal  case  said:  "The  second  important  ground 
for  demurrer  is  that  complainant  has  a  complete  and  adequate  remedy  at 
law;  coun.sel  citing,  among  others,  Rehberg  v.  Surety  Co.,  131  Mich.  135, 
91  N.  W.  132;  Barney  v.  Surety  Co.,  131  Mich.  192,  91  N.  W.  140.  It  is  not 
always  true  that,  becaase  a  remedy  might  be  pursued  upon  the  law  side  of 
the  court,  the  chancery  side  may  not  also  have  jurisdiction.  The  bill  al- 
leges that  complainant's  money  was  obtained  from  her  by  means  of  fraud; 
that  defendants  conspired  together,  and  were  parties  to  the  fraud;  that  a 
large  business  was  done  by  the  corporation;  that  it  is  insolvent;  that  defend- 
ants have  converted  the  money  taken  in  by  the  corporation,  including  the 
complainant's  money,  to  their  own  use;  that  an  accounting  is  necessary, 
and  an  examination  of  the  books  of  the  corporation.  If  the  case  stated  in 
the  bill  is  true, — and  it  must,  on  demurrer,  be  deemed  to  be  true, — under 
the  repeated  decisions  of  this  court  the  chancery  side  of  the  court  has  ju- 
risdiction," per  Moore,  J.  See  also  Bale  v.  Michigan  Tontine  Invest.  Co., 
132  Mich.  479,  93  N.  W.  1071. 

76  Webster  v.  Oliver  Ditson  Co.  (U.  S.  C.  C),  171  Fed.  895. 

77  Guaranty  Trust  &  S.  D.  Co.  v.  Green  Cove  S.  &  M.  R.  R.  Co.,  139  U.  S. 
137,  35  L.  ed.  116,  11  Sup.  Ct.  512. 

78  Pugh  V.  Fairmount  Gold  &  Silver  Min.  Co.,  112  U.  S.  238,  28  L.  ed.  712, 
5  Sup.  Ct.  113. 

G63 


§  414  EQUITABLE    REMEDIES 

coupons.  The  defendant  company  consented  to  a  judgment 
and  to  the  issue  of  an  execution;  and  upon  the  same  day  the 
trustees  gave  notice  that,  by  reason  of  such  execution  having 
been  unpaid,  they  declared  the  principal  and  interest  upon  all 
the  bonds  to  be  immediately  payable;  and  at  once  took  posses- 
sion of  the  property.  It  was  held  that  while  these  proceedings 
were  taken  by  connivance  and  consent  of  the  parties,  they  were 
not  collusive  in  a  legal  sense,  as  the  debt  was  honestly  due  and 
the  plaintiff  entitled  to  the  judgment.  It  was  also  held  that 
while  the  judgment  was  obtained  for  the  obvious  purpose  of 
enabling  the  trustees  to  declare  the  mortgage  to  be  due,  the 
court  would  not  inquire  into  the  motives  of  the  parties.'^^ 

In  foreclosure,  the  proceedings  being  ex  parte,  by  order  of 
court,  to  sell  property  burdened  with  mortgage  or  privilege,  the 
creditor  must  bring  his  claim  within  the  terms  of  the  law.*" 
So  a  provision  in  a  mortgage  that  the  mode  of  sale  provided 
by  it  "shall  be  exclusive  of  all  others"  is  an  attempt  to  provide 
against  a  remedy  in  the  ordinary  course  of  judicial  proceedings 
and  oust  the  jurisdiction  of  the  courts,  and  is  therefore  invalid.*^ 
Where  a  bill  is  filed  to  foreclose  a  mortgage,  and  the  answer  ad- 
mits the  bonds  secured  by  such  mortgage  to  have  been  issued, 
it  is  not  necessary  that  the  bonds  should  be  put  in  evidence 
before  a  decree  of  foreclosure  and  sale.*^  "WTiere  a  director 
prevents  a  corporation  from  organizing  by  alleged  misrepre- 
sentations, other  directors  who  refused  on  account  thereof  to 
enter  into  the  organization  cannot,  in  the  corporate  name,  avail 
themselves  of  the  defense,  against  a  mortgage  executed  by 
them,  that  certain  results  were  caused  by  the  proposed  com- 
pany's financial  embarrassment  and  its  loss  of  prospective 
profits  owing  to  the  failure  to  organize  the  corporation.*^ 

79  Dickerman  v.  Northern  Trust  Co.,  176  U.  S.  181,  44  L.  ed.  423,  20 
Sup.  Ct.  311. 

80  Bank  of  Leesville  v.  Wingate,  123  La.  386,  48  So.  1005. 

«>  Guaranty  Trust  &  S.  D.  Co.  v.  Green  Cove  S.  &  M.  R.  R.  Co.,  139  U.  S. 
137,  35  L.  ed.  116,  11  Sup.  Ct.  512. 

82  Dickerman  v.  Northern  Trust  Co.,  176  U.  S.  181,  44  L.  ed.  423,  20 
Sup.  Ct.  311. 

8a  Martin  v.  Deetz,  102  Cal.  55,  41  Am.  Rt.  Rep.  151. 

664 


EQUITABLE    REMEDIES  §  415 

§415.  Corporation  Liens  and  Mortgages-  Equity  Juris- 
diction of  Foreclosure     Conflicting  Claims  to  Possession. 

Equity  will  not  take  juiisdiction  to  foreclose  a  corporation's 
statutory  lien  on  stock  for  a  stockholder's  debt  where  a  not  in- 
adequate remedy  exists  at  law.^"*  Where  a  State  law  gives  either 
an  action  at  law  or  a  remedy  in  equity  to  enforce  a  mechanic's 
lien,  proceedings  in  a  Federal  Court  to  enforce  it  may  be  had 
in  equity.**-"'  Where  a  railroad  forming  a  continuous  line  and 
located  in  two  adjoining  States  is  mortgaged  by  a  de  facto  or 
de  jure  corporation  of  which  the  courts  of  one  of  said  States  has 
jurisdiction  and  the  mortgage  consists  of  bonds  of  the  corpora- 
tion the  Superior  Court  of  the  county  in  the  State  having  such 
jurisdiction  may  make  a  decree  in  equity  foreclosing  the  mort- 
gage as  to  the  corporate  property  located  in  both  States  and 
embraced  in  the  mortgage  and  may,  to  effectuate  the  decree, 
direct  a  sale  of  the  entire  property  and  that  a  proper  conveyance 
be  executed  to  the  purchaser  by  the  receiver,  the  trustee  and 
the  mortgagor,  and  if  the  adjoining  State  has  in  fact  incorpo- 
rated a  company  which  has  been  under  the  forms  of  law  con- 
solidated with  a  de  facto  or  de  jure  corporation  of  the  State  hav- 
ing jurisdiction  as  above  stated  and  such  consolidated  company 
executed  the  mortgage  and  is  really  a  party  before  the  court  as 
mortgagor,  such  facts  may  be  shown  in  evidence  and  the  court 

84  Aldine  Mfg.  Co.  v.  Phillips,  118  Mich.  162,  5  Det.  L.  W.  422,  42  L.  R. 
A.  531,  76  N.  W.  371. 

Adequate  remedy  at  law,  generally,  see  §§  163-165,  406-408,  herein. 

Jurisdiction  of  Federal  Circuit  Court  of  railroad  foreclosure  suit,  see  Grand 
Trunk  Ry.  Co.  v.  Central  Vermont  R.  Co.  (U.  S.  C.  C),  103  Fed.  740;  To- 
ledo, St.  Louis  &  K.  C.  R.  Co.  v.  Continental  Trust  Co.  (U.  S.  C.  C.  A.),  95 
Fed.  497;  Wheelwright  v.  St.  Louis,  N.  O.  &  O.  Canal  &  T.  Co.  (U.  S.  C.  C), 
50  Fed.  709;  Beekman  v.  Hudson  River  West  Shore  Rd.  Co.  (U.  S.  C.  C), 
35  Fed.  3. 

Jurisdiction  of  Pennsylvania  common  pleas  over  foreclosure  of  mortgage  of 
street  railway  company,  see  Old  Colony  Trust  Co.  v.  Allentown  &  B.  Rapid 
Transit  Co.,  192  Pa.  St.  596,  44  Atl.  319. 

85  Sheffield  Furnace  Co.  v.  Witherow,  149  U.  S.  574,  13  Sup.  Ct.  936,  37 
L.  ed.  853. 

When  foreclosure  in  State  Court  of  liens,  created  by  certificate  of  receiver  of 
railroad  corporation,  will  not  be  granted  by  sale  of  jiroperty,  see  Passage  v. 
Dansville  &  Mt.  M.  R.  Co.,  58  N.  Y.  Supp.  770,  41  App.  Div.  182. 

(i(;5 


§  416  EQUITABLE    REMEDIES 

has  jurisdiction,  the  same  ui  all  respects  over  the  consolidated 
company  as  it  would  over  a  corporation  created  exclusively  by 
the  laws  of  the  State  so  assuming  jurisdiction.^ 

In  a  foreclosure  suit  the  Federal  Circuit  Court,  having  juris- 
diction of  the  subject-matter  and  the  parties,  appointed  a 
receiver,  who,  pursuant  to  its  orders,  took  possession  of  the 
mortgaged  road.  In  an  action  between  other  parties  subse- 
quently brought  in  a  State  Court,  an  attachment  was  sued  out 
and  levied  upon  the  road.  Pending  an  application  thereupon 
made  to  the  Circuit  Court,  to  restrain  the  plaintiff  from  further 
proceeding  with  his  attachment,  he  and  the  defendant  to  the 
action  consented  to  the  removal  to  the  Circuit  Court,  where, 
upon  a  finding  that  the  road  was  not,  at  the  date  of  the  levy  of 
the  attachment,  the  property  of  that  defendant  the  writ  was 
dismissed.  It  was  held  that  the  Circuit  Court  had  the  right 
to  determine  upon  the  conflicting  claims  to  the  possession  of 
the  road,  and  that  the  parties  to  the  action  by  consenting  to 
transfer  it,  did  no  more  in  effect,  than  the  court  could  have  com- 
pelled them  to  do." 

§  416.  Corporation  Liens  and  Mortgages — Enforcement 
of — Foreclosure  — Parties. 

Where  the  statute  so  permits  an  assignee  or  assignees  of  per- 
sons who  have  filed  railroad  liens  upon  the  property  may 
properly  bring  suit  to  establish  such  liens. *^  An  owner  of  a  rail- 
road is  a  proper  party  in  a  suit  to  charge  the  property  of  a  rail- 
road company  with  a  lien  thereon.^^  If  a  holder  of  one  or  more 
series  of  bonds  issued  by  a  railroad  company  and  secured  by 

88  Georgia  Southern  &  Florida  Rd.  Co.  v.  Mercantile  Trust  &  Deposit 
Co.,  94  Ga.  306,  21  S.  E.  701. 

87  People's  Bank  v.  Calhoun,  102  U.  S.  256,  26  L.  ed.  101. 

88  Little  Rock  Trust  Co.  v.  Southern  Missouri  &  A.  R.  Co.,  195  Mo.  669, 
93  S.  W.  944,  Rev.  Stat.,  1899,  §  4256. 

When  party  having  statutory  lien  cannot  intervene,  in  foreclosure  suit  against 
insolvent  railroad  company,  to  obtain  priority  over  mortgage  debt,  see 
Van  Frank  v.  St.  Louis,  C.  G.  &  Ft.  S.  Ry.  Co.,  93  Mo.  App.  412,  67  S.  W. 
688. 

89  Little  Rock  Trust  Co.  v.  Southern  Missouri  &  A.  R.  Co.,  195  Mo.  669, 
93  S.  W.  944;  Rev.  Stat.,  1899,  §§  4245,  4246,  4248. 

660 


EQUITABLE    REMEDIES  §  41() 

mortgage  has  the  right  to  institute  proceedings  for  foreclosure 
he  is  bound  to  act  for  all  standing  in  a  similar  position,  and  not 
only  to  permit  other  bondholders  to  intervene  but  to  see  that 
their  rights  are  protected  in  the  final  decree.""  Where  a  railroad 
corporation,  by  mortgage,  whose  sufficiency  to  secure  what  it  is 
given  to  secure  is  doubtful,  mortgages  its  property  directly  to 
all  its  bondholders  by  name,  to  secure  specifically  to  each  the 
amount  due  on  the  bonds  to  him,  no  one  bondholder,  even 
when  professing  to  act  in  behalf  of  all  bondholders  who  may 
come  in  and  contribute  to  the  expense  of  the  suit,  can  proceed 
alone  against  the  company,  and  ask  a  sale  of  the  property 
mortgaged.  He  is  incapacitated  to  do  this  because:  (1)  The 
sufficiency  of  the  security  being  doubtful  and  it  being  thus 
his  interest  to  diminish  the  amount  of  debt,  in  the  whole  to 
be  paid,  all  other  creditors  should  have  such  notice  as  may 
enable  them  to  see  that  on  a  sale  the  most  possible  is  obtained 
for  the  property  mortgaged ;  (2)  even  in  equity,  a  suit  on  a  writ- 
ten instrument  must  be  brought  in  the  name  of  all  who  are 
formal  parties  to  it,  and  retain  an  interest  in  it."^  A  bondholder 
may  sue  in  his  own  name  to  foreclose  a  railroad  mortgage  to  the 
extent  of  recovering  accrued  and  unpaid  interest  where  trus- 
tees, acting  upon  the  request  of  bondholders,  had  sued  to  fore- 
close but  the  suit  had  been  dismissed  and  said  trustees  had, 
before  their  appeal  from  such  dismissal  was  determined,  re- 
fused to  renew  said  litigation."^ 

Upon  a  bill  to  foreclose  a  railroad  mortgage  a  lessee  in  posses- 

80  New  Orleans  Pac.  Ry.  Co.  v.  Parker,  143  U.  S.  42,  30  L.  ed.  66,  12  Sup. 
Ct.  364. 

Foreclosure  of  mortgages:  bondholders'  rights — parties,  see  Chicago  &  Vin- 
cennes  Rd.  Co.  v.  Fosdick,  106  U.  S.  47,  27  L.  ed.  47;  Shaw  v.  Railroad  Co., 
100  U.  S.  605,  25  L.  ed.  757;  Hotel  Co.  (Omaha  Hotel  Co.)  v.  Wade,  97 
U.  S.  14,  24  L.  ed.  917;  Gunnison  v.  Chicago,  M.  &  St.  P.  Ry.  Co.  (U.  S.  C. 
C),  117  Fed. .629  (when  laches  insufficient  to  bar  bondholder's  right  to  en- 
force mortgage);  General  Electric  Co.  v.  La  Grande  Edison  Electric  Co. 
(U.  S.  C.  C.  A.),  87  Fed.  590,  59  U.  S.  App.  473,  31  C.  C.  A.  118;  Seibert  v. 
Minneapolis  &  St.  Louis  R.  Co.,  52  Minn.  246,  20  L.  R.  A.  535;  Davis  v. 
New  York  Concert  Co.,  41  Hun  (N.  Y.),  492;  Weetzen  v.  St.  Paul  &  P.  R. 
Co.,  4  Hun  (N.  Y.),  529. 

91  Railroad  Co.  v.  Orr,  18  Wall.  (85  U.  S.)  471,  21  L.  ed.  810. 

»2  Beekman  v.  Hudson  River  West  Shore  Rd.  Co.  (U.  S.  C.  C),  35  Fed.  3. 

607 


§  416  EQUITABLE    REMEDIES 

sion  of  and  the  owner  of  the  equity  in  the  mortgaged  property 
are  proper  parties.^^  Although  in  general,  all  incumbrancers 
must  be  made  parties  to  a  bill  of  foreclosure,  yet  where  a  decree 
of  foreclosure  and  sale  was  made  and  executed  at  the  suit  of  a 
subsequent  mortgagee,  and  with  the  consent  of  the  mortgagor, 
it  not  appearing  that  there  were  any  prior  incumbrancers,  the 
proceedings  will  not  be  set  aside,  upon  the  application  of  the 
mortgagor,  in  order  to  let  in  a  prior  mortgagee,  who  ought 
regularly  to  have  been  made  a  party,  unless  it  be  necessary  to 
prevent  irremediable  mischief.^'*  Where  an  action  is  brought, 
to  foreclose  a  mortgage,  by  a  railroad  company,  which  is  a  mili- 
tary and  post  road,  and  a  receiver  has  been  appointed  -pendente 
lite  to  enforce  its  right  to  erect  its  line  on  the  company's  right 
of  way,  a  telegraph  company  may  properly  intervene. ^^  A 
party  bidding  at  a  foreclosure  sale  of  a  railroad  makes  himself 
thereby  a  party  to  the  proceedings,  and  subject  to  the  jurisdic- 
tion of  the  court  for  all  orders  necessary  to  compel  the  perfect- 
ing of  his  purchase;  and  with  a  right  to  be  heard  on  all  questions 
thereafter  arising,  affecting  his  bid,  which  are  not  foreclosed 
by  the  terms  of  the  decree  of  sale,  or  are  expressly  reserved  to 
him  by  such  decree. ^^  A  water  company  does  not  possess  such 
an  interest  as  to  enable  it  to  resist  a  foreclosure  sale  for  the  pay- 
ment of  bonds  which  its  property  was  mortgaged  to  secure 
where  it  has  conveyed  its  works  to  another  corporation  subject 
to  such  mortgages  and  is  under  no  agreement  with  the  grantee 
for  the  payment  by  it  of  any  part  of  the  mortgage  debt.^'^ 

BSBeekman  v.  Hudson  River  West  Shore  Rd.  Co.  (U.  S.  C.  C),  35 
Fed.  3. 

wFinley  v.  United  States  Bank,  11  Wheat.  (24  U.  S.)  304,  6  L.  ed. 
480. 

95  Union  Trust  Co.  v.  Atchison,  Topeka  &  S.  F.  R.  Co.,  8  N.  Mex.  327,  43 
Pac.  701. 

96  Kneeland  v.  American  Loan  &  T.  Co.,  136  U.  S.  89,  34  L.  ed.  379,  10 
Sup.  Ct.  950. 

When  purchaser  at  foreclosure  sale  is  subject  to  jurisdiction  of  Federal  Court, 
.see  Farmers'  Loan  &  Trust  Co.  v.  Houston  &  T.  C.  R.  Co.  (U.  S.  C.  C),  44 
Fed.  115. 

97  American  Waterworks  Co.  v.  Farmers'  Loan  &  T.  Co.  (U.  S.  C.  C.  A.), 
73  Fed.  95G,  20  C.  C.  A.  133,  36  U.  S.  App.  563. 

068 


EQUITABLE    REMEDIES  §  417 

§  417.  Rights  of  Parties  upon  Foreclosure  of  Mortgages  — 
Junior  Bondholder- Judgment  Creditor — Priorities-  Pro- 
ceeds of  Sale — Adjustment  of  Claim — Accounting —In- 
stances. 

A  bondholder  of  a  class  covered  by  a  railroad  mortgage  to 
secure  the  class  of  bonds  issued  in  case  of  insolvency  of  the  obli- 
gors cannot,  by  obtaining  judgment  at  law,  be  permitted  to  sell 
a  portion  of  the  property  devoted  to  the  common  security,  as 
this  would  disturb  the  })ro  rata  distribution  among  the  bond- 
holders, to  which  they  are  equitably  entitled."*  Where,  on  the 
application  of  the  trustee  of  a  railroad  mortgage,  a  receiver  is 
appointed  and  takes  possession  of  the  road  and  of  its  rolling 
stock,  and  among  the  latter  is  rolling  stock  which  the  company 
was  operating  under  lease,  and  the  receiver  continues  to  operate 
it,  its  rental  at  the  contract  price,  and  not  according  to  its 
actual  use,  if  not  paid  from  earnings,  will  be  a  charge  upon  the 
proceeds  of  the  sale  under  the  foreclosure  of  the  mortgage  prior 
to  the  mortgage  debt.**"  A  company,  to  secure  the  payment  of 
its  bonds,  mortgaged  its  property,  and  the  rents,  issues  and 
profits  arising  therefrom,  with  the  provision,  that,  if  there  was 
default  in  paying  the  interest,  the  mortgagee  might  take  posses- 
sion of  the  property,  and  manage  the  same,  and  receive  and 
collect  all  rents  and  claims  due  and  to  become  due  to  the  com- 
pany. Default  was  made;  and  the  mortgagee  filed  his  bill,  set- 
ting forth  that  the  company  had  on  hand  moneys  and  claims 
due  to  it,  both  of  which  he  prayed  might  be  applied  to  his 
mortgage.  An  execution  upon  a  judgment,  which  B.  had 
against  the  mortgagor,  having  been  sued  out  and  returned  mdla 
bona,  a  month  later  he  filed  his  bill  to  subject  such  moneys  and 
claims  to  the  payment  of  his  judgment.  It  was  held  that  inas- 
much as  the  mortgagee  had  not  taken  possession,  his  claim  to 
the  earnings  and  income  on  hand  at  the  time  of  filing  his  bill 
must  be  postponed  to  that  of  B.^  The  term  "wages  of  ern- 
es Pennock  v.  Coe,  23  How.  (64  U.  S.),  117,  16  L.  ed.  436. 
89  Kneeland  v.  American  Loan  &  T.  Co.,  136  U.  S.  Sf),  34  L.  ed.  379,  10 
Sup.  Ct.  950. 

1  American  Bridge  Co.  v.  Heidelbach,  94  U.  S.  798,  24  L.  ed.  144. 

609 


§  417  EQUITABLE    REMEDIES 

ployes,"  as  used  in  an  order  directing  the  payment  of  certain 
classes  of  debts  out  of  the  proceeds  of  the  sale  of  a  railroad  under 
foreclosure,  in  preference  to  the  secured  liens,  does  not  include 
the  service  of  counsel  employed  for  a  special  purpose.  But 
services  of  an  attorney  in  securing  payment  to  the  receiver  of  a 
railroad  of  rent  due  for  property  of  the  railroad  company  and 
the  return  of  the  property,  are  entitled  to  priority  of  payment 
over  secured  liens  on  such  sale  under  foreclosure .^  Where  a 
mortgage  for  a  certain  sum,  as  four  million  dollars,  was  given 
to  trustees  to  be  issued  to  secure  railroad  bonds  to  be  issued 

2  Louisville,  E.  &  St.  Louis  R.  Co.  v.  Wilson,  138  U.  S.  501. 

Priority  of  liens  and  mortgages,  see  the  following  cases:  Southern  Ry.  Co. 
V.  Ensign  Mfg.  Co.  (U.  S.  C.  C.  A.),  117  Fed.  417,  54  C.  C.  A.  591;  Niles  Tool 
Works  Co.  V.  Louisville,  N.  A.  &  C.  Ry.  Co.  (U.  S.  C.  C.  A.),  112  Fed.  561, 
50  C.  C.  A.  390  (when  claim  for  amount  due  on  machinery  sold  to  railroad 
company  no  privity  over  mortgage  debt  on  foreclosure) ;  Gregg  v.  Mercan- 
tile Trust  Co.  (U.  S.  C.  C.  A.),  109  Fed.  220,  48  C.  C.  A.  318  (what  debt  is 
and  is  not  entitled  to  preference;  claims  for  rental  of  terminal  facilities  are 
not;  debt  for  locomotives,  when  not;  claims  for  price  of  certain  essential 
supplies  are  claims  of  general  creditors,  when  are;  extent  of  right  when  di- 
version of  income;  attorneys'  fees);  Kansas  Loan  &  Trust  Co.  v.  Electric 
Light  &  Power  Co.  (U.  S.  C.  C),  108  Fed.  702  (upon  what  a  preference  over 
mortgagee  of  one  furnishing  supplies  depends);  Columbus,  S.  &  H.  R.  Co. 
Appeal  of  (U.  S.  C.  C.  A.),  109  Fed.  177,  48  C.  C.  A.  275  (mortgage  given  to 
secure  notes  when  constitutes  junior  mortgage  to  prior  mortgages);  Met- 
ropolitan Trust  Co.  V.  Railroad  Equipment  Co.  (U.  S.  C.  C.  A.),  108  Fed. 
913,  48  C.  C.  A.  135  (equipment  conditionally  sold  to  railroad  company, 
vendor  has  first  been  where  mortgagees  elect  to  retain  property) ;  Contract- 
ing &  Bldg.  Co.  V.  Continental  Trust  Co.  (U.  S.  C.  C.  A.),  108  Fed.  1,  47 
C.  C.  A.  143  (lender  of  money  to  pay  interest  on  railroad  mortgage  coupons 
no  priority) ;  Farmers'  Loan  &  Trust  Co.  v.  Stuttgart  &  A.  R.  R.  Co.  (U.  S. 
C.  C),  92  Fed.  246  (claim  of  guarantor  of  notes  of  railroad  company  not 
superior  to  mortgagee;  but  taxpayer  has  superior  lien);  Thomas  v.  Cincin- 
nati, N.  O.  &  T.  P.  R.  Co.  (U.  S.  C.  C),  91  Fed.  195  (judgment  creditors  no 
priority  over  lessees'  mortgagees;  when  priority  given  certain  judgments 
over  mortgage  of  rolling  stock);  Fidelity  Ins.,  T.  &  S.  D.  Co.  v.  Norfolk  & 
W.  R.  Co.  (U.  S.  C.  C),  90  Fed.  175  (judgment  against  railroad  lessee,  based 
upon  tort  when  not  superior  to  mortgage  liens  notwithstanding  statute 
giving  such  judgment  against  mortgagor  superiority);  Ten  Eyck  v.  Pon- 
tiac,  O.  &  P.  A.  R.  Co.,  114  Mich.  494,  4  Det.  L.  N.  650,  72  N.  W.  .362  (stock- 
holder's judgment  based  upon  service  render  no  priority  over  mortgage  where 
stockholder  had  knowledge);  Van  Frank  v.  St.  Louis,  C.  G.  &  Ft.  S.  Ry. 
Co.,  93  Mo.  App.  412,  67  S.  W.  688  (holder  of  statutory  lien  when  no  priority 
over  mortgage  debt). 

070 


EQUITABLE    REMEDIES  §  418 

to  a  like  amount,  and  many  other  bonds  having  been  issued  at  a 
large  discount,  were,  on  a  claim  made  against  the  company, 
judicially  decreed  to  be  entitled  to  no  more  than  what  had  been 
actually  given  for  them,  so  that  a  margin  remained  of  the  mort- 
gage security,  a  j^arty  who  had  sold  to  the  company  materials 
used  in  making  the  road,  and  who  took  in  payment  some  of  the 
bonds  at  eighty  per  cent,  with  an  agreement  that  if  the  company 
should  at  any  time  sell  other  bonds  at  a  less  rate,  he  should 
have  as  many  additional  bonds  as  would  pay  him  for  materials 
in  full,  estimating  the  bonds  already  given  and  those  to  be 
given  at  the  lowest  rate  at  which  any  had  been  sold,  was  held 
not  entitled,  the  company,  which  was  insolvent  at  the  time  of 
the  suit,  having  sold  bonds  at  forty  per  cent,  to  have  his  equity 
adjusted  on  a  foreclosure  of  the  mortgage,  and  his  demand  at- 
tached to  the  mortgage;  bonds  to  the  whole  amount  of  four 
million  dollars  having  been  actually  issued.^ 

§  418.  Foreclosure  and  Sale  of  Railroad  Mortgage — Dis- 
tribution of  Proceeds — Unsecured  Creditors — Bank  as  Gen- 
eral Creditor— Prior  Mortgagee. 

The  rule  charging  operating  expenses  of  a  railroad,  debts  due 
from  it  to  connecting  lines  growing  out  of  an  interchange  of 
business,  debts  due  for  the  operation  of  leased  lines,  and,  gen- 
erally, debts  created  under  special  circumstances,  which  make 
an  equity  in  favor  of  the  unsecured  debtor,  upon  the  gross  in- 
come of  the  road  before  a  fund  arises  for  the  payment  of  the 
mortgage  interest,  is  not  applicable  to  a  fund  realized  from  a 
sale  of  the  road  under  foreclosure  of  the  mortgage;  and,  as  a 
general  rule,  unsecured  debts  of  the  company  cannot,  in  such 
case,  take  precedence  over  debts  secured  by  prior  and  express 
liens,  in  the  distribution  of  proceeds  of  the  sale  of  the  mortgaged 
property."*    Where,  in  a  suit  foreclosing  a  railroad  mortgage,  it 

3  Vose  V.  Bronson,  6  Wall.  (73  U.  S.)  452,  18  L.  ed.  846. 

4  St.  Louis,  A.  &  T.  H.  Rd.  Co.  v.  Cleveland,  Chicago,  C.  &  I.  Ry.  Co., 
125  U.  S.  658,  31  L.  ed.  832,  8  Sup.  Ct.  1011.  The  court  held  on  the  proofs 
in  this  case:  (1)  that  no  gross  earnings  which  should  have  been  applied  to 
the  payment  of  the  rent  due  the  appellant  were  diverted  to  the  payment 
of  interest  upon  bonds  of  mortgage  bondholders  represented  in  the  suit 

671 


§  419  EQUITABLE    REMEDIES 

appeared  that  money  loaned  the  railroad  company  by  a  bank, 
an  intervening  creditor  at  a  time  when  the  company  was  much 
embarrassed,  and  shortly  before  the  commencement  of  the  suit, 
went  into  the  general  funds  of  the  company,  and  not  especially 
to  the  payment  of  the  mortgage  interest,  and  that  there  was  no 
fraud  or  deception  on  the  part  of  the  trustees,  and  no  misuse  of 
current  income  by  the  receiver  of  the  road  to  the  injury  of  the 
bank,  it  was  held  that  the  bank  had  only  the  rights  of  a  general 
creditor  in  the  distribution  of  the  proceeds  from  the  sale  of  the 
mortgaged  property.^  In  a  suit  in  equity  to  foreclose  a  mort- 
gage from  a  railroad  corporation  of  its  whole  railroad,  franchise, 
lands  and  property,  which  have  since  been  put  in  the  possession 
of  a  receiver,  an  intervening  prior  mortgagee  of  the  lands  is  not 
entitled  to  have  the  amount  of  his  mortgage  paid  out  of  the 
funds  in  the  hands  of  the  receiver,  or  out  of  the  proceeds  of  a 
sale  made  pursuant  to  the  decree  of  foreclosure,  subject  to  his 
mortgage.^  Where,  upon  foreclosure  of  a  railroad  mortgage 
for  nonpayment  of  overdue  interest  a  sale  is  made  under  the 
decree  and  there  is  a  surplus  over  what  is  necessary  to  pay  such 
interest,  costs  and  expenses  it  may  be  properly  applied  to  the 
reduction  of  the  principal  sum  due  upon  the  bonds  and  it  may 
be  recovered  by  the  trustee  with  interest,  for  the  bondholders.^ 

§  419.  Foreclosure  of  Railroad  Mortgage — Rights  of  Pur- 
chaser— ^Title  and  Obligations. 

A  mortgage  of  the  franchises  and  property  of  a  corporation, 
made  in  the  exercise  of  a  power  given  by  statute  confers  no  right 
upon  purchasers  at  a  foreclosure  sale  to  exist  as  the  same  corpo- 
ration, but,  at  most,  to  reorganize  as  a  new  corporation  subject 
to  the  laws  existing  at  the  time  of  the  reorganization.*    And  a 

and  interested  in  the  distribution  of  the  fund;  and  (2)  that  the  appellant 
had  no  equitable  right,  as  against  the  appellees,  to  priority  of  payment  out 
of  the  fund. 

5  Penn  v.  Calhoun,  121  U.  S.  251,  30  L.  ed.  915,  7  Sup.  Ct.  906. 

6  Wood  worth  v.  Blair,  112  U.  S.  8,  28  L.  ed.  615,  5  Sup.  Ct.  6. 

7  Ohio  Central  Rd.  Co.  v.  Central  Trust  Co.  of  N.  Y.,  133  U.  S,  83,  33 
L  ed.  561,  10  Sup.  Ct.  235. 

8  Norfolk  &  W.  R.  R.  Co.  v.  Pendleton,  156  U.  S.  667,  39  L,  ed.  574,  15 
Sup.  Ct.  413. 

672 


EQUITABLE    HEMEDIES  §  420 

railway  company  organized  to  receive,  hold  and  operate  a  rail- 
road sold  under  foreclosure  of  a  mortgage,  in  the  absence  of  a 
statute  or  contract,  is  not  obliged  to  pay  the  debts  and  perform 
the  obligations  of  the  corporation  whose  property  the  pur- 
chasers buy.^  So  the  sale  of  a  railway  in  the  foreclosure  pro- 
ceedings under  the  mortgage  to  a  trust  company,  and  the  deed 
made  in  pursuance  thereof,  passes  the  property  to  the  purchaser 
free  from  any  claims  of  the  creditors  of  the  railway  company.^" 
In  a  great  public  enterprise,  such  as  the  building  of  the  Union 
Pacific  Railroad  under  a  congressional  charter  reserving  the 
right  to  alter,  amend  or  repeal,  public  interests,  and  not  simply 
private  purposes  are  to  be  regarded,  and  the  purchaser  at  ju- 
dicial foreclosure  sale  takes  the  property  subject  to  the  proper 
regulations  and  use  established  by  Congress,  notwithstanding 
the  mortgage  foreclosed  may  have  antedated  the  legislation.^^ 

§  420.  Foreclosure  and  Sale — Reorganization  Agreements 
by  Purchasers — Exceptions  to  Sale — Constitutional  Law. 

The  provisions  of  a  State  Constitution  that  "  no  j^rivate  corpo- 
ration shall  issue  stock  or  bonds  except  for  money  or  property 
actually  received,  or  labor  done;  and  all  fictitious  increase  of 
stock  or  indebtedness  shall  be  void"  does  not  prevent  the  carry- 
ing out  of  an  agreement  between  mortgage  bondholders  of  an 
embarrassed  railroad  company  in  that  State  by  which  it  was 
agreed  that  trustees  should  bu}^  in  the  mortgaged  property  on 
foreclosure,  and  convey  it  to  a  new  company  to  be  organized  by 
the  bondholders  which  should  issue  new  mortgage  bonds  to  pay 
the  expenses  of  the  sale,  and  other  new  mortgage  bonds  to  be 
taken  by  the  bondholders  in  lieu  of  their  old  bonds,  and  full 
))aid  up  stock  subject  to  the  mortgage  debt,  to  be  delivered  to 
and  held  by  the  bondholders  without  any  payment  of  money. '- 

9  Hoard  V.  Chesapeake  &  O.  Ry.,  123  U.  S.  222,  31  L.  ed.  130,  8  Sup.  C"t. 
74.    See  §§  238-240,  herein. 

10  McKittrick  v.  Arkansas  Cent.  Ry.  Co.,  152  U.  S.  473,  38  L.  ed.  518,  14 
Sup.  Ct.  661. 

11  Union  Pacific  Rd.  Co.  v.  Mason  City  &  Fort  Dodge  Rd.  Co.,  199  U.  S. 
160,  26  Sup.  Ct.  19,  50  L.  ed.  434. 

12  Memphis  &  L.  R.  Rd.  Co.  v  Dow,  120  U.  S.  287,  30  L.  ed.  595,  7  Sup. 
Ct.  482. 

43  073 


§  421  EQUITABLE    REMEDIES 

Where  there  hiul  been  ii  foreclowure  and  sale  under  a  raih'oad 
mortgage  to  secure  certain  bonds,  excei)tions  to  the  sale  were 
refused  to  be  entertained  in  favor  of  such  of  the  bondholders 
as  had  been  i)arties  to  a  scheme  under  which  the  sale  had  been 
made  for  the  formation  of  a  new  company,  and  had  surrendered 
their  bonds  in  exchange  for  stock  and  bonds  of  such  new  associ- 
ation.^^ 

§  421.  Injunction,  Generally — Instances. 

A  clear  case  must  be  j^resented  upon  the  papers  befon^  the 
court  before  a  preliminary  injunction  will  be  granted  in  a  Fed- 
eral Court. ^"^  The  rights  of  the  parties  are  not  determined  by  a 
temporary  injunction.  It  has  in  view  for  the  purposes  of  the 
case  a  probable  right  and  a  probable  danger,  so  that  the  court 
need  be  satisfied  only  that  such  right  may  be  defeated  without 
a  restraining  order  and  that  if  it  grant  such  order  less  injury 
will  result  to  the  respondent  than  to  the  complainant.^^ 

If  a  State  injure  one  incorporated  company  by  the  unlawful 
grant  of  a  charter  to  another  and  rival  one,  the  remedy  of  the 
first  company  is  by  proper  proceedings  to  restrain  the  second 
from  getting  into  operation,  and  not  by  neglecting  its  own 
duties. ^*^  And  an  injunction  against  the  abuse  of  corporate 
privileges  will  not  be  denied  because  the  wrongful  acts  consti- 
tute crimes.^''  But  where  the  primary  object  of  the  institution 
of  a  corporation  is  the  public  welfare,  and  the  interest  of  the 
stockholders  is  only  secondary,  the  willful  frustration  of  that 
intention  by  the  company's  acts  constitute  a  fraud  upon  the 
public;  so  that  a  corporation  guilty  of  such  a  fraud  cannot  have 
the  aid  of  a  court  of  equity  to  suppress,  for  its  own  benefit,  an 
interference  with  exclusive  privileges,  claimed  under  its  charter, 

i3Crawshay  v.  Soutter,  6  Wall.  (73  U.  S.)  739,  18  L.  ed.  845. 

14  Star  Co.  V.  Colver  Pub.  House  (U.  S.  C.  C),  141  Fed.  129. 

15  Colorado  Eastern  Rd  Co.  v.  Chicago,  Burlington  &  Quincy  Ry.  Co. 
(U.  S.  C.  C.  A.),  141  Fed.  898,  73  C.  C.  A.  132.  See  Denver  &  Rio  Grande 
Rd.  Co.  V.  United  States  (U.  S.  C.  C.  A.),  124  Fed.  156,  59  C.  C.  A.  579. 

16  Turnpike  Co.  v.  State,  3  Wall.  (70  U.  S.)  210,  18  L.  ed.  180. 
"Columbian  Athletic  Club  v    State  ex  rel.  McMahan,    143  Ind.  98,  28 

L.  R.  A.  727,  40  N.  E   914. 

(374 


EQUITABLE    REMEDIES  §  421 

by  a  conipetition  which  has  arisen  from  its  own  neglect  of  a 
charter  duty.^*  Where  a  bill  in  eciuity  was  brought  l)y  an  ex- 
change to  enjoin  defendant  from  receiving  (juotations  from  the 
telegraph  company,  to  which  it  had  given  the  right  to  distnlmte 
them,  and  from  using  the  same,  an  injunction  was  issued,  based 
upon  the  ground,  principally,  that  quotations  of  prices  on  an 
exchange,  collected  by  the  exchange,  are  property  and  entitled 
to  the  protection  of  the  law,  and  the  exchange  has  the  right  to 
keep  them  to  itself  or  have  them  distributed  under  conditions 
established  by  it.^*^  So  where  a  town  has  no  right  to  exercise 
a  ferry  privilege,  it  is  correctly  restrained  by  injunction  from 
doing  so  by  the  State  Court/"  But  an  injunction  to  protect  the 
exclusive  privilege  to  a  ferry  does  not  conflict  or  interfere  with 
the  right  of  a  boat  to  carry  passengers  or  goods  in  the  ordinary 
prosecution  of  commerce  without  the  regularity  or  purpose  of 
ferry  trips;  that  remedy  applies  only  to  one  which  is  run  openly 
and  avowedly  as  a  ferrj^boat.^^ 

In  another  case  the  complainant,  a  corporation  engaged  in 
the  transportation  of  passengers  and  freight,  brought  a  petition 
against  a  like  corporation,  its  officers  and  agents,  to  obtain 
an  injunction  restraining  said  defendant  from  using  certain 
wharves  of  some  of  which  the  complainant  was  the  owner  in 
fee,  and  of  others  the  lessee  of  the  exclusive  use  from  the  owners. 
The  complainant  claimed  the  exclusive  right  to  the  use  of  said 
wharves,  either  as  owner  or  lessee,  and  that  the  defendant 
illegally  and  against  the  complainant's  wdll  insisted  upon  using 
them  to  carry  on  its  business,  although  offering  to  pay  the 
complainant  what  was  the  reasonable  value  of  the  defendant's 
u.^(^  of  such  wharves.  In  determining,  that  a  decree  for  an  in- 
junction should  be  entered  the  court  held:  (1)  that  a  wharf  on  a 

isScranton  Electric  Light  &  Heat  Co.'s  Appeal,  122  Pa.  St.  154,  9  Am. 
St.  Rep.  79. 

19  Hunt  V.  New  York  Cotton  Exchange,  205  U.  S.  322,  51  L.  ed.  821,  27 
Sup.  Ct.  529;  Board  of  Trade  v.  Christie  Grain  &  Stock  Co.,  198  U.  S.  236, 
40  L.  ed.  1031,  25  Sup.  Ct.  637. 

20  East  Hartford  v.  Hartford  Bridge  Co.,  10  How.  (51  U.  S.)  511,  13  L. 
ed.  518. 

21  Conway  v.  Taylor,  1  Black  (66  U.  S.),  603,  17  L.  ed.  191. 

675 


§  421  EQUITABLE    REMEDIES 

navigable  stream  is  private  property  and  subject  to  the  absolute 
control  of  the  owner  as  other  property  is;  (2)  the  rights  of  a 
riparian  owner  on  a  navigable  stream  are  governed  by  the  law 
of  the  State  in  which  the  stream  is  situated,  but  subject  to  the 
paramount  public  right  of  navigation;  (3)  one  of  the  rights  of  a 
riparian  proprietor  is  to  build  private  wharves  out  so  as  to  reach 
the  navigable  waters  of  the  stream,  and  this  right  has  been  af- 
firmed by  the  courts  of  Virginia;  but  a  wharf  obstructing  navi- 
gation or  private  rights  of  others,  or  encroaching  upon  any 
public  landing  may  be  abated ;  (4)  a  private  wharf  on  a  navi- 
gable stream  is  the  exclusive  property  of  the  owner  of  which  he 
can  only  be  deprived  in  accordance  with  established  law,  and,  if 
taken  for  public  use,  on  compensation  being  made;  (5)  a  pri- 
vate wharf  on  a  navigable  stream  is  not  held  by  the  owner,  as  a 
railroad  is,  subject  to  the  public  use,  and  a  third  person  has  no 
right  to  demand  its  use  even  on  tendering  compensation  there- 
for and  even  though  there  may  be  no  other  wharf  at  the  place ; 
(6)  the  public  obtains  no  adverse  right  against  the  owner  of  a 
private  wharf  by  mere  user;  in  the  absense  of  an  intent  on  the 
owner's  part  to  dedicate,  and  an  acceptance  by  the  public  au- 
thority, the  use  is  mere  license  subject  to  withdrawal.'^  The 
remarks  of  Mr.  Justice  Bradley  in  Transportation  Company  v. 
Parkersburg,  as  to  the  right  of  the  owner  of  a  private  wharf  to 
make  arbitrary  charges,  were  declared  obiter  and  not  applicable 
to  this  case.^^ 

In  the  matter  of  taxation  a  kState  assessment  upon  an  ex- 
press company  of  another  State  proportioned  to  mileage  is  bad 
when  it  appears  that  the  total  valuation  is  made  up  principally 
from  real  and  personal  property,  not  necessarily  used  in  the 
actual  business  of  the  company,  and  which  is  permanently  lo- 
cated in  the  State  where  the  company  is  incorporated;  and  the 
transmission  of  such  an  assessment  by  a  State  board  to  the 

22  Weems  Steamboat  Co.  v.  People's  Co.,  214  U.  S.  345,  29  Sup.  Ct.  661, 
53  L.  ed.  1024,  judgment  of  Circuit  Court  of  Appeals,  affirming;  it,  reversed 
141  Fed.  454;  Munn  v.  Illinois,  94  U.  S.  113,  24  L.  ed.  77,  distingui.shed; 
Louisville  &  Nashville  Ry.  Co.  v.  West  Coast  Naval  Stores,  198  U.  S.  483,  49 
L.  ed.  1135,  25  Sup.  Ct.  745. 

23  107  U.  S.  691,  27  L.  ed.  584,  2  Sup.  Ct.  732. 

676 


EQUITABLE    REMEDIES  §  422 

auditors  of  the  several  counties  may  be  enjoined.-^  In  tiie  case 
of  title  and  the  rights  of  purchasers  of  public  lands,  a  party 
who,  on  complying  with  the  provisions  of  an  act  of  Congress, 
would  have  the  right  to  purchase  lands,  part  of  the  public  do- 
main, but  who  has  not  complied  with  the  retiuirements  of  the 
act,  is  not  entitled,  upon  the  mere  showing  of  such  right  to  pur- 
chase, to  demand  that  its  title  be  adjudged  good  and  valid,  and 
that  another  party  who  is  in  possession  be  adj  udged  to  have  no 
estate  or  interest  in  the  land,  or  that  such  other  person  be  en- 
joined from  asserting  any  adverse  claim,  or  that  the  claimant 
recover  the  possession  of  the  land  with  the  right  of  ousting  the 
defendant  from  the  improvements  made  thereon  by  its  predeces- 
sors.^^ Where  a  party  applying  for  an  injunction  had  a  right  to 
have  been  made  a  party  in  the  State  Court,  a  Federal  Court  will 
not  continue  an  order  restraining  the  exercise  of  a  right  in  con- 
demnation proceedings,  actjuired  under  a  statute  and  in  which  a 
State  Court  had  entered  a  decree  and  had  competent  jurisdic- 
tion so  to  do.^*^  Where  an  action  at  law  has  been  brought  by  a 
receiver  of  an  insolvent  national  bank  against  a  party,  the  Cir- 
cuit Court  will  take  jurisdiction  of  a  suit  in  equity  to  restrain  the 
prosecution  of  said  action  at  law  since  the  equity  suit  is  an^ 
ciliary  to  the  action  at  law.'^  An  injunction  granted  by  the 
final  decree  should  not  be  broader  than  the  necessities  of  the 
case  require  and  if  broader  than  that  it  will  be  modified  by  the 
Federal  Supreme  Court .^* 

§  422.  Injunction — Jurisdiction. 

Whenever  a  remedy  at  law  is  doubtful  and  difficult,  a  Court 
of  Chancery  has  jurisdiction.-^ 

24  Fargo  V.  Hart,  193  U.  S.  490,  24  Sup.  Ct.  498,  48  L.  eel.  761. 

25  San  Jose  Land  &  Water  Co.  v.  San  Jose  Ranch  Co.,  189  U.  S.  177,  47 
L.  ed.  765,  23  Sup.  Ct.  487. 

20  Union  Pacific  Rd.  Co.  v.  Denver  &  Rio  Grande  Rd.  Co.  (U.  S.  C.  C), 
37  Fed. 179. 

27  Aldrich  V.  Campbell  (U.  S.  C.  C.  A.),  97  Fed.  663,  38  C.  C.  A.  347. 

28  McNeill  V.  Southern  Railway  Co.,  202  U.  S.  543,  50  L.  ed.  1143,  26 
Sup.  Ct.  722. 

29  American  Ins.  Co.  v.  Fisk,  1  Paige  Ch.  (N.  Y.)  90. 
Adequate  remedy  at  law,  see  §§  163-105,  406-408,  herein, 

077 


§  422  EQUITABLE    REMEDIES 

The  United  States  Circuit  Court  has  no  jurisdiction  of  a  suit 
for  an  injunction  wherein  one  raih'oad  company  seeks  to  prevent 
the  construction  of  a  raih'oad  where  the  subject  of  the  con- 
troversy hes  beyond  the  Hmits  of  the  district,  and  where  the 
process  of  the  court  cannot  reach  the  locus  in  quo,  and  where 
the  rights  of  a  corporation  not  made  parties  to  the  suit  are 
seriously  involved  in  the  controversy  in  a  case  to  which  the  act 
of  Congress,  providing  for  the  nonjoinder  of  parties  who  were 
not  inliabitants  of  the  district,  does  not  apply .^" 

So  the  New  York  Supreme  Court  has  no  jurisdiction  to  en- 
tertain a  suit  in  equity  brought  by  a  stockholder  of  a  corpora- 
tion in  his  own  behalf  and  that  of  all  other  stockholders  to 
determine  the  respective  rights  of  the  office  of  director  as  be- 
tween rival  claimants  not  parties  to  the  action.  Nor  can  it 
enjoin  a  de  facto  director,  holding  under  color  of  an  election, 
from  exercising  the  functions  of  the  office.  Hence,  a  complaint 
in  such  action  which  in  substance  alleges  a  conspiracy  to  obtain 
control  of  the  corporation  by  the  election  of  directors  who  are 
"dummies,"  having  no  actual  ownership  of  the  stock  standing 
in  their  names,  the  acceptance  of  said  directors  of  the  resigna- 
tion of  a  duly  elected  director  after  he  had  withdrawn  the  same, 
and  a  refusal  to  recognize  him  as  director,  does  not  state  a  cause 
of  action,  nor  authorize  the  court  to  enjoin  a  de  facto  director 
from  acting,  nor  to  compel  the  recognition  of  the  rival  claimant .^^ 
Although  a  bill  by  a  stockholder  in  a  Federal  Court  against  the 
corporation  and  another  corporation  of  the  same  State  alleged 
facts  which,  if  true,  gave  the  court  jurisdiction  on  the  ground 
of  diversity  of  citizenship,  where  the  bill  was  not  verified,  and 
such  allegations  were  promptly  denied  by  the  first  corporation, 
which  denied  that  complainant  was  a  bona  fide  stockholder, 
and  alleged  that  the  suit  was  brought  collusively  in  the  interest 
of  its  codefendant  to  enable  the  latter  to  litigate  matters  be- 
tween the  two  corporations  in  the  Federal  Court,  which  allega- 

30  Northern  Indiana  Rd.  Co.  v.  Michigan  Central  Rd.  Co.,  15  How.  (.56 
U.  S.)  233,  14  L.  ed.  674. 

31  Moir  V.  Provident  Savings  Life  Assur.  Sec,  112  N.  Y.  Supp.  57,  127 
App.  Div.  591. 

078 


EQUITABLE    REMEDIES  §  423 

tions  found  support  in  the  averment  of  the  bill  of  facts  not 
gei'mane  to  the  cause  of  action  stated,  the  joinder  of  unnecessary 
parties,  and  the  filing  of  a  cross  bill  by  the  othei'  corporation 
against  the  first  defendant,  a  jurisdictional  issue  was  presented, 
which  the  court  was  required  to  determine  before  granting  an 
injunction  on  the  cross  bill  restraining  further  proceedings  in 
a  pending  suit  in  a  State  Court.^^ 

§  423.  Jurisdiction  to  Enjoin  Prosecuting  Action  in  An- 
other State — Jurisdiction  of  Federal  Court — Injunction 
from  to  State  Court. 

A  court  of  equity  has  jurisdiction  and  power  to  enjoin  parties 
from  prosecuting  an  action  in  another  State  concerning  the 
same  subject-matter.  Thus,  where  an  action  was  brought  in 
New  York  State  to  recover  the  amount  due  under  a  life  insur- 
ance policy,  and  the  insurance  company  thereafter,  when  said 
case  was  about  to  be  reached  for  trial,  brought  a  suit  in  equity 
in  a  Massachusetts  court  praying  that  the  policy  be  decreed 
void  and  surrendered,  and  an  independent  suit  was  brought 
in  New  York  by  the  plaintiff  in  the  first  action  to  restrain  the 
prosecution  of  the  equity  suit  in  Massachusetts,  the  New  York 
court  granted  an  order  enjoining  the  same  where  the  plaintiff 
subsequently  became  and  at  the  time  of  suing  was  a  citizen  of 
New  York  and  the  insurer  was  engaged  in  business  in  that 
State  even  though  the  contract  of  insurance  was  made  in 
Massachusetts  between  citizens  then  of  Massachusetts.^^ 

32  Syllabus  in  National  Hollow  Brake  B.  Co.  v.  Chicago  Ry.  Equip.  Co., 
168  Fed.  666. 

33  Webster  v.  Columbian  National  Life  Ins.  Co.,  116  N.  Y.  Supp.  404, 
alY'g  115  N.  Y.  Supp.  892  (two  of  the  five  judges  dissenting).  The  decision 
in  this  case  in  the  appellate  division  of  the  Supreme  Court  was  as  follows:  If 
a  foreign  corporation  is  engaged  in  business  in  New  York  by  permi.s.sion  of 
the  Insurance  Department,  it  is  a  citizen  of  that  State  so  far  as  aiiy  liti- 
gation is  concerned.  Residence  is  largely  a  matter  of  intention,  and  where 
plaintiff  shows  that  her  husband  resided  in  New  York  at  the  time  of  his 
death,  and  that  she  leased  and  moved  into  an  apartment  in  the  city  of 
New  York  and  declared  her  intention  of  permanently  residing  there  before 
she  brought  her  action,  and  satisfactorily  explains  why  she  gave  her  resi- 
dence as  Massachusetts  in  making  proofs  of  death,  the  fact  of  her  residence 
in  New  York  State  is  established.     And  where  an  action  on  an  insurance 

679 


§  423  EQUITABLE    REMEDIES 

A  Federal  Circuit  Court,  sitting  in  equity,  has  jurisdiction 
to  enjoin  the  enforcement  of  an  unconscionable  judgment  of  a 
State  or  of  a  national  court  for  new  causes,  such  as  fraud,  acci- 
dent or  mistake,  which  prevented  the  judgment  defendant  from 
availing  himself  of  a  meritorious  defense  that  was  not  fairly 
presented  to  the  court  which  rendered  the  judgment.  But  it 
has  no  power  to  take  such  action  on  account  of  errors  or  irregu- 
larities in  the  proceedings  on  which  such  judgment  or  decree  is 
founded,  or  on  account  of  erroneous  or  illegal  decisions  by  the 
court  which  rendered  the  judgment  or  decree.^  But  an  in- 
junction will  not  be  granted  by  a  Federal  Circuit  Court  where  an 
adequate  remedy  can  be  had  in  the  State  Court  in  Hke  cases  as 
where  it  is  sought  to  restrain  the  use  of  force  to  gain  the  use  of 
premises.^'^  And  a  Federal  Court  will  not  by  reason  of  the  pro- 
hibition in  the  United  States  statutes,^^  restrain  the  petitioner 
in  condemnation  proceedings  pending  in  a  State  Court,  from 
entering  upon  the  lands  in  question.""'^  Nor  can  a  Federal  Court 
restrain  a  State  Court  from  acting  in  any  case  brought  before 
it  either  of  a  civil  or  criminal  nature,  or  prevent  any  investiga- 
tion or  action  of  a  grand  jury.^*  Nor  by  reason  of  the  prohibi- 
tion of  said  statute  will  a  Circuit  Court,  at  the  instance  of  a 
mortgagee  of  a  railroad  company,  restrain  the  enforcement  of 
the  judgment  of  a  State  Court  for  the  ejectment  of  a  railroad 

policy  is  brought  by  a  resident  of  said  State  in  the  Supreme  Court  against 
a  Massachusetts  corporation  doing  business  in  New  York,  the  court  has 
power  to  enjoin  the  defendant  from  prosecuting  a  suit  in  Massachusetts  to 
cancel  the  policy  on  the  same  grounds  which  it  pleads  as  a  defense  to  the 
action  brought  in  this  State,  therefore,  the  proper  practice  in  such  a  case  is 
to  bring  an  independent  action  to  restrain  the  defendant,  instead  of  moving 
in  the  action  already  brought.  A  contract  of  insurance  is  transitory  in  its 
nature,  and  upon  the  death  of  the  insured  the  beneficiary  can  bring  an  ac- 
tion thereon  in  any  State  where  the  defendant  is  doing  business  and  where 
process  can  be  served  upon  it,  and  of  which  she  is  a  resident.  Webster  v. 
Columbian  National  Life  Ins.  Co.,  131  App.  Div.  837. 

*4  National  Surety  Co.  v.  State  Bank  (U.  S.  C.  C.  A.),  120  Fed.  593. 

35  Latham  v.  Northern  Pacific  Ry.  Co.  (U.  S.  C.  C),  45  Fed.  721. 

36  U.  S.  Rev.  Stat.,  §  720. 

37  Dillon  V.  Kansas  City  S.  B.  Rd.  Co.  (U.  S.  C.  C),  43  Fed.  109. 

38  Young,  Ex  parte,  209  U.  S.  123,  52  L.  ed.  714,  28  Sup.  Ct.  44;  see  §  430, 
herein. 

080 


EQUITABLE    REMEDIES  §  424 

company  from  certain  land.^"  But  where  a  Federal  Court  has 
acquired  jurisdiction  for  purposes  other  than  that  of  the  in- 
junction to  restrain  proceedings  in  a  State  Court  the  above 
statute  does  not  apply  to  proceedings  which  are  merely  inci- 
dental to  said  jurisdiction.^" 

§  424.  Injunction  Against  Officers,  Directors  or  Stock- 
holders. 

Although  we  have  considered  fully  the  rights,  liabilities  and 
remedies  of  officers,  directors  and  stockholders  "*'  we  will  briefly 
state  here  that  while  the  courts  will  not  interfere  with  the  in- 
ternal affairs  of  a  corporation  '^^  the  equity  powers  of  the  court 
may  be  invoked  to  restrain  the  directors  or  officers  from  abusing 
their  powers.^  So  a  stockholder  in  a  corporation  has  a  remedy 
in  chancery  against  the  directors,  to  prevent  them  from  doing 
acts  which  would  amount  to  a  violation  of  the  charter,  or  to 
prevent  any  misapplication  of  their  capital  or  profits  which 
might  lessen  the  value  of  the  shares,  if  the  acts  intended  to  be 
done  amount  to  what  is  called  in  law  a  breach  of  trust  or  duty. 
So  also.a  stockholder  has  a  remedy  against  individuals,  in  what- 
ever character  they  profess  to  act,  if  the  subject  of  complaint 
is  an  imputed  violation  of  a  corporate  franchise,  or  the  denial  of 
a  right  growing  out  of  it,  for  which  there  is  not  an  adequate 
remedy  at  law.  Therefore,  when  the  directors  of  a  bank  re- 
fused to  take  the  proper  measure  to  resist  the  collection  of  a  tax, 
which  they  themselves  believed  to  have  been  imposed  upon 
them  in  violation  of  their  charter,  this  refusal  amounted  to  what 
is  termed  in  law  a  breach  of  trust,  a  stockholder  had  a  right  to 
file  a  bill  in  chancery  asking  for  such  a  remedy  as  the  case  might 
require.  If  the  stockholder  be  a  resident  of  another  State  than 
that  in  which  the  bank  and  persons  attempting  to  violate  its 

39  Central  Trust  Co.  v.  Grantham  (U.  S.  C.  C.  A.),  83  Fed.  540,  27  C.  C.  A. 
570,  53  U.  S.  App.  647. 

40  Garner  v.  Second  Nat.  Bank  (U.  S.  C.  C.  A.),  67  Fed.  833. 

41  See  §§  261  et  seq.,  herein. 

42  See  §  260,  herein. 

«  Lawrence  v.  Weber,  65  Misc.  (N.  Y.)  603. 

0)81 


&  425  EQUITABLE    REMEDIES 

charter,  or  commit  a  breach  of  trust  or  duty  have  their  domicile, 
he  may  file  his  bill  in  the*  courts  of  the  United  States.  He  has 
this  right  under  the  Constitution  and  laws  of  the  United  States.'''' 
And  stockholders  and  creditors  may  be  enjoined  by  a  Federal 
Circuit  Court  from  proceeding  to  have  declared  void  a  mortgage 
which  has  been  foreclosed  by  decree  in  said  Circuit  Court."^ 

§  425.  Injunction— Rate  Regulation.'"^ 

In  a  proceeding  brought  by  the  attorney-general  of  a  State 
charging  the  defendant  railway  company  with  a  continuous 
violation  of  a  State  law  fixing  rates  for  the  carriage  of  coal 
within  the  State  and  asking  for  an  injunction,  it  was  held  that 
where  the  State  Court  has  found  the  rate  fixed  by  a  State  com- 
mission on  a  single  commodity  to  be  not  confiscatory  and  has 
granted  an  injunction,  the  decree  will  be  affirmed  without 
prejudice  to  the  right  of  the  carrier  to  reopen  the  case  if,  after 
adequate  trial  of  the  rate,  it  can  prove  that  it  is  actually  con- 
fiscatory and  amounts  to  a  deprivation  of  property  without  due 
process  of  law."*^ 

In  view  of  the  continuous  confusion,  risks  and  multiplicity 
of  suits,  which  would  result  from,  and  the  public  interests  and 
vast  number  of  people  which  would  be  affected  by,  the  enforce- 
ment of  an  ordinance  reducing  the  rates  of  fare  of  street  rail- 
ways, which  ordinance  the  company  claim  is  unconstitutional 
as  impairing  the  obhgation  of  the  contracts  resulting  from  the 
ordinances  granting  the  franchise,  a  court  of  equity  has  juris- 
diction of  an  action  to  enjoin  the  enforcement  of  the  ordinance, 
especially  when  the  ordinance  affects  only  a  part  of  the  system 
and  would  engender  the  enforcement  of  two  rates  of  fare  over 
the  same  line,  leading  to  dangerous  consequences.^* 

«  Dodge  V.  Woolsey,  18  How.  (59  U.  S.)  331,  15  L.  ed.  401. 

45  Central  Trust  Co.  v.  Western  N.  C.  R.  Co.  (U.  S.  C.  C),  89  Fed.  24. 

46  See  §§  32-41,  95,  106,  113-115,  132,  133,  143-153,  herein. 

47  Northern  Pacific  Ry.  Co.  v.  North  Dakota,  216  U.  S.  579,  30  Sup.  Ct. 
,  54  L.  ed. ,  aff'g  without  prejudice  17  No.  Dak.  223,  following  Will- 
cox  V.  Consolidated  Gas  Co.,  212  U.  S.  19,  29  Sup.  Ct.  392,  53  L.  ed.  382. 

48  Cleveland  v.  Cleveland  City  Ry.  Co.,  194  U.  S.  517,  48  L.  ed.  1102,  24 
Sup.  Ct.  756. 

()82 


EQUITABLE    REMEDIES  §  426 

§  426.  Injunction— By  and  Against  Railroads  and  Street 
Railroads. 

A  railroad  company  has  a  right  to  maintain  a  bill  for  an  in- 
junction to  restrain  the  enforcement  of  a  city  ordinance  which 
interferes  with  the  construction  or  maintenance  of  depot  build- 
ings which  it  is  required  by  law  to  maintain.'*^ 

An  actionable  wrong  is  committed  by  one  who  maliciously 
interferes  in  a  contract  between  two  parties  and  induces  one 
of  them,  to  break  that  contract  to  the  injury  of  the  other,^" 
and  this  principle  applies  to  carrying  on  the  business  of  pur- 
chasing and  selling  nontransferable  reduced  rate  railroad  tickets 
for  profit  to  the  injury  of  the  railroad  company  issuing  them, 
and  this  even  though  the  ingredient  of  actual  malice,  in  the 
sense  of  personal  ill-will,  does  not  exist.  And  when  the  deal- 
ings of  a  class  of  speculators  in  nontransferable  tickets  have 
assumed  great  magnitude,  involving  large  cost  and  risk  to  the 
railroad  company  in  preventing  the  wrongful  use  of  such  tickets, 
and  the  parties  so  dealing  in  them  have  expressly  declared  their 
intention  of  continuing  so  to  do,  a  court  of  equity  has  power  to 
grant  relief  by  injunction.  Again,  every  injunction  contem- 
plates the  enforcement,  as  against  the  party  enjoined,  of  a  rule 
of  comfort  for  the  future  as  to  the  wrongs  to  which  the  injunc- 
tion relates,  and  a  court  of  equity  may  extend  an  injunction 
so  as  to  restrain  the  defendants  from  dealing  not  only  in  non- 
transferable tickets  already  issued  by  complainant,  but  also  in 
all  tickets  of  a  similar  nature  which  shall  be  issued  in  the  future; 
and  the  issuing  of  such  an  injunction  does  not  amount  to  an 
exercise  of  legislative,  as  distinct  from  judicial,  power  and  a 
denial  of  due  process  of  law.^^  Where  the  faulty  construction  of 
an  electric  street  railway  system  and  the  negligent  operation 
thereof  result  in  the  continual  damage  to  the  water  pipes  of  a 
city  for  which  there  exists  no  adequate  remedy  at  law,  the 

49  Montgomery  v.  Louisville  &  Nashville  Ry.  Co.,  84  Ala.  127,  4  So.  626. 

50  Bitterman  v.  Louisville  &  Nashville  Rd.  Co.,  207  U.  S.  205,  52  L.  ed. 
171,-28  Sup.  Ct.  91;  Angle  v.  Chicago  &  St.  Paul  Ry.  Co.,  151  U.  S.  1,  38 
L.  ed.  55,  14  Sup.  Ct.  240. 

51  Bitterman  v.  Louisville  &  Nashville  Ry.  Co.,  207  U.  S.  205,  206,  52  L. 
ed.  171,  28  Sup.  Ct.  91,  aff'g  44  Fed.  34. 

683 


§  426  EQUITABLE    REMEDIES 

municipality  has  a  remedy  by  injunction  to  restrain  such 
operation  of  the  road;  but  the  company  wliich  is  operating  un- 
der a  city  franchise  is  liable  only  for  damages  resulting  from 
actual  negligence  in  using  such  system,  as  the  city  must  be  held 
to  have  contemplated  any  mischief  arising  from  the  reasonable 
use  of  such  a  system  .^^ 

When  the  certificate  of  incorporation  of  a  railway  company 
states  that  the  purpose  of  the  corporation  is  to  construct  and 
operate  a  railroad,  designating  certain  points  as  termini  of  the 
proposed  road,  and  that  it  is  to  run  through  the  city  of  F.,  and 
said  company  lawfully  acquired  a  franchise  to  construct  and 
operate  a  street  railway  in  said  city,  and,  in  pursuance  of  the 
ordinance,  granting  the  franchise,  is  proceeding  to  build  its 
track  in  one  of  the  streets  of  said  city,  the  owner  of  real  estate 
adjoining  said  street  cannot  eiijoin  the  company  from  so  doing, 
whether  the  charter  of  the  company  authorizes  it  to  construct 
and  operate  a  street  railway  or  not,  unless,  upon  the  ordinary 
principles  of  equity  jurisprudence,  he  has  grounds  for  equitable 
relief  against  the  company.  If  it  be  true  that  the  corporation 
is  exceeding  its  corporate  powers,  that  fact  is  not  alone  suffi- 
cient ground  for  equitable  interference  at  the  suit  of  a  person 
who  is  not  a  member  of  the  company.  Such  adjoining  lot  owner 
cannot  restrain  the  construction  of  the  railway  in  the  street  upon 
which  his  property  abuts  until  the  damage  to  his  property,  re- 
sulting from  such  use  of  the  street,  is  ascertained  and  paid  or  se- 
cured, unless  the  injury  to  his  property  is  so  great  as  to  destroy 
its  value  and  therefore  amounts  to  a  virtual  taking  of  the  prop- 
erty for  the  use  of  the  railway  company.  And  this  applies  where 
a  State  Constitution  provides  that  compensation  shall  be  paid  to 
the  owner  of  the  property  for  such  damages  and  gives  him  an  ac- 
tion at  law  therefor,  but  does  not,  as  in  cases  where  the  prop- 
erty is  actually  taken,  require  the  compensation  to  be  paid  or 
secured  before  the  injury  is  inflicted;  and,  having  an  adequate 
remedy  at  law  for  the  injury,  the  owner  of  such  lot  can  have 
no  relief  in  a  court  of  equity  on  account  thereof,  if  the  legislature 

52  Dayton  v.  City  Ry.  Co.,  26  Ohio  Cir.  Ct.  Rep.  (Laning)  736. 
684 


EQUITABLE    REMEDIES  §  427 

has  authorized  the  construction  and  operation  of  the  railway 
in  such  street .^^  The  intersection  of  railroad  tracks,  where  the 
same  cross  a  public  highway,  by  electric  street  railway  tracks, 
does  not  entitle  the  railroad  company  to  an  injunction,  in  the 
absence  of  some  pecuhar  or  special  damage  to  its  property .^^ 

§  427.  Injunction — By  and  Against  Telegraph  and  Tele- 
phone Companies.^^ 

Even  though  a  tax  statute  may  be  valid  and  collectible,  yet, 
where  a  telegraph  or  telephone  hne  is  an  instrument  or  agency 
of  interstate  commerce,  an  injunction  cannot  be  granted  by  a 
State  Court  to  restrain  such  companies  from  doing  business  in 
the  State,  for  a  failure  to  pay  State  taxes,  as  it  would  clearly 
impede  and  obstruct  interstate  commerce  were  such  remedy 
granted,  and  it  would  be  repugnant  to  the  Post  Roads  Act.^^ 
It  is  held,  however,  that  a  constitutional  provision  requiring  as 
a  condition  precedent  to  doing  business  in  the  State,  that  a 
foreign  corporation  shall  have  a  known  place  of  business  and 
an  authorized  agent  therein  does  not  violate  the  Federal  Con- 
stitution, and  that  a  domestic  telegraph  company  will  not  be 
enjoined  from  impeding  and  instructing  a  foreign  telegraph 
company  from  constructing  and  operating  its  lines  within  the 
State,  where  the  complaint  does  not  show  a  compliance  with 
said  condition  precedent.  It  is  also  held,  however,  in  the  same 
case  that  a  State  cannot  exclude  such  foreign  corporations.^^ 

53  Watson  V.  Fairmont  &  Suburban  Ry.  Co.,  49  W.  Va.  528,  39  S.  E.  193. 
Abutting  owners'  rights  and  remedies;  telegraph,  telephone  and  street  railway 

or  other  companies  using  electricity;  additional  burden,  see  Joyce  on  Elec- 
tric Law  (2d  ed.),  §§  295-348. 

54  New  York,  New  Haven  &  Hfd.  Rd.  Co.  v.  Fair  Haven  &  W.  R.  Co.,  70 
Conn.  610,  40  Atl.  607,  41  Atl.  169;  New  York,  New  Haven  &  Hfd.  Rd. 
Co.  V.  Bridgeport  Tract.  Co.,  65  Conn.  410,  32  Atl.  953;  Chicago  &  Calumet 
T.  R.  Co.  V.  Whiting,  Hammond  &  E.  C.  S.  R.  Co.,  139  Ind.  297,  38  N.  E. 
604. 

55  See  §  428,  herein. 

56  Pennsylvania  Telephone  Co.,  Matter  of  Taxation  of,  48  N.  J.  Eq.  91, 
27  Am.  St.  Rep.  462.  See  Western  Union  Teleg.  Co.  v.  Attorney-General 
of  Massachusetts,  125  U.  S.  530,  31  L.  ed.  790,  8  Sup.  Ct.  961. 

57  American  Union  Teleg.  Co.  v.  Western  Union  Teleg.  Co.,  67  Ala.  26,  42 
Am.  St.  Rep.  90.    See  as  to  this  last  point,  viz. :  that  a  State  cannot  exclude 

685 


§  427  EQUITABLE    REMEDIES 

And  where  a  telegraph  company  instituted  proceedings  to 
condenni  and  appropriate  the  right  of  way  over  a  bridge  for  the 
purpose  of  attaching  its  wires  thereto  and  had  not  complied 
with  the  provisions  of  the  Post  Roads  Act  requiring  as  a  condi- 
tion precedent  to  the  exercise  of  its  rights  by  a  telegraph  com- 
pany that  it  must  file  with  the  postmaster-general  its  written 
acceptance  of  the  restrictions  and  obligations  imposed  by  such 
act,  the  court  held  that  compliance  with  this  provision  was 
necessary,  and  that  as  it  had  not  complied  therewith  all  pro- 
ceedings were  invalid,  and  that  an  injunction  would  be  con- 
tinued, prohibiting  the  company  from  proceeding  any  further, 
until  it  had  filed  its  acceptance  as  required  by  such  statute.^* 
An  injunction  has  also  been  granted  to  restrain  a  telephone 
company  from  constructing  its  line  without  first  complying 
with  the  requirements  of  a  statute.^^  In  another  case  where  an 
abutting  owner  sought  to  restrain  the  stringing  of  wires  in  front 
of  his  premises,  and  there  did  not  appear  to  be  any  default  on 
the  part  of  the  company  as  to  compliance  with  a  statute  in 
reference  to  the  incorporation  of  telegraph  companies,  a  pre- 
liminary injunction  was  refused  on  the  ground  that  there  must 
be  urgent  necessity,  and  the  damage  threatened  must  be  of  an 
irreparable  character  to  warrant  the  court  in  ordering  it.*'" 

If  a  telegraph  company  has  no  authority  to  construct  its  line 
along  a  railroad  right  of  way  it  may  be  enjoined  from  so  doing 
in  an  action  by  the  railroad  company .^^  The  mere  fact,  how- 
ever, that  a  railroad  company  has  granted  to  a  telegraph  com- 
pany the  right  to  construct  its  line  along  the  railroad  right  of 
way,  will  not  be  a  sufficient  ground  for  granting  an  injunction,  in 

such  corporations  when  they  claim  the  benefit  of  the  Post  Roads  Act  and 
have  complied  with  its  provisions,  Joyce  on  Electric  Law  (2d  ed.),  §  65. 

58  Chicago  &  Atchison  Bridge  Co.  v.  Pacific  Mut.  Teleg.  Co.,  36  Kan.  113, 
12  Pac.  535. 

59  Broome  v.  New  York  &  New  Jersey  Telephone  Co.,  42  N.  J.  Eq.  141, 
7  Atl.  851. 

60  Roake  v.  American  Telep.  &  Teleg.  Co.,  41  N.  J.  Eq.  35,  2  Atl.  618. 
Abutting  owners'  rights  and  remedies,  see  Joyce  on  Eloctric  Law  (2d  ed.), 

§§  295-348. 

81  New  York  City  &  Northern  Ry.  Co.  v.  Central  Union  Teleg.  Co.,  21 
Hun  (N.  Y.),  261,  1  Am.  Elect.  Cas.  315. 

686 


EQUITABLE    REMEDIES  §  428 

behalf  of  such  company,  restraining  another  telegraph  company 
from  constructing  a  line  of  telegraph  along  the  same  right  of 
way .^2  But  it  has  been  held  that  a  telegraph  company  which 
has  erected  poles  in  pursuance  to  such  a  contract  has  an  ex- 
clusive right  to  the  use  of  the  poles  erected  by  it,  and  that  an- 
other company  may  be  enjoined  from  using  the  same  poles  for 
its  lines  of  wires.^^ 

§  428.  Injunction— Interference  With  Departmental  Offi- 
cers or  Executive  Department — Postmaster.^^ 

The  general  rule  is  that  the  judicial  power  will  not  interpose, 
by  mandamus  or  injunction,  to  limit  or  direct  the  action  of  de- 
partmental officers  in  respect  of  matters  pending,  within  their 
jurisdiction  and  control.*'^  And  even  if  the  power  to  review  the 
determination  of  an  executive  department  exists,  where  the 
complainant  is  merely  appealing  from  the  discretion  of  the  de- 
partment to  the  discretion  of  the  court,  the  court  should  not 
interfere  by  injunction  where  the  complainant  has  no  clear 
legal  right  to  the  relief  sought.^*' 

62  Pacific  Postal  Teleg.  Cable  Co.  v.  Western  Union  Teleg.  Co.,  50  Fed. 
493,  4  Am.  Elec.  Cas.  232;  Western  Union  Teleg.  Co.  v.  Baltimore  &  Ohio 
Teleg.  Co.,  23  Fed.  12;  Western  Union  Teleg.  Co.  v.  Baltimore  &  Ohio  Teleg. 
Co.,  22  Fed.  133;  Western  Union  Teleg.  Co.  v.  American  Union  Teleg.  Co., 
9  Biss.  (U.  S.  C.  C.)  72,  1  Amer.  Elec.  Cas.  288,  Western  Union  Teleg.  Co.  v. 
American  Union  Teleg.  Co.,  65  Ga.  160.  Examine  Western  Union  Teleg. 
Co.  V.  New  Brunswick  Ry.  Co.,  N.  B.  Eq.  Cas.  338. 

63  Western  Union  Teleg.  v.  Paducah  R.  Co.,  86  111.  246. 

64  See  §  129,  herein. 

65  New  Orleans  v.  Paine,  147  U.  S.  261,  37  L.  ed.  162,  13  Sup.  Ct.  303 
(land  department  officers). 

66  National  Life  Ins.  Co.  v.  National  Life  Ins.  Co.,  209  U.  S.  317,  52  L. 
ed.  808,  28  Sup.  Ct.  541.  This  was  a  bill  in  equity  to  obtain  an  injunction 
against  corporation  defendant,  restraining  it  and  its  manager  from  receiving, 
and  the  postmaster  and  the  letter  carriers  named  as  defendants  from  de- 
livering mail  matter  to  the  defendant  on  the  ground  that  .such  mail  matter 
was  intended  for  the  complainant  even  though  not  addressed  to  it,  and  it 
was  held  that  where  a  corporation  has  taken  the  same  name  as  that  of  an 
older  corporation  the  fact  that  it  has  a  greater  quantity  of  mail  matter  does 
not  justify  the  court  in  interfering  with  a  special  order  of  the  Post  Office  De- 
partment directing  the  delivery  of  matter  not  addressed  by  street  and  num- 
ber in  accordance  with  Par.  4  of  §  645  of  the  General  Regulations  of  1902,  to 
the  one  first  adopting  the  name  in  the  place  of  address. 

687 


§  429  EQUITABLE    REMEDIES 

Where  a  temporary  injunction  has  been  granted,  but  before 
final  hearing  the  cause  for  which  it  was  granted  has  been  re- 
moved, it  will  not  be  continued  or  made  perpetual.  Thus  a  bill 
to  enjoin  a  postmaster  from  refusing  to  admit  a  magazine  pub- 
lished by  complainant  to  the  mails  at  second-class  rates,  in 
consequence  of  the  alleged  illegal  action  of  the  Post  Office  De- 
partment in  revoking  the  privilege  previously  granted  to  said 
magazine,  and  to  determine  the  number  of  copies  complainant 
is  entitled  to  send  at  such  rates,  will  not  be  entertained  where, 
pending  the  suit,  the  department  has  granted  a  new  permit,  al- 
though it  limits  the  number  of  copies  to  a  smaller  number  than 
the  bill  alleges  that  complainant  is  entitled  to  send  when  it  was 
filed,  since  such  action  leaves  no  ground  for  the  granting  of  re- 
lief within  the  allegations  of  the  bill  or  within  the  jurisdiction 
of  a  court  of  equity.^' 

§  429.  Injunction  to  Protect  Franchises  of  Corporation  or 
to  Prevent  Their  Forfeiture. 

An  injunction  will  be  granted  to  prevent  the  franchise  of  a 
corporation  from  being  destroyed,  as  well  as  to  restrain  a  party 
from  violating  it,  by  attempting  to  participate  in  its  exclusive 
privileges.  "The  distinction  between  destrojdng  what  is  de- 
nominated the  corporate  franchise  of  a  bank,  and  destroying  its 
vivifying  principle,  the  right  to  deal  in  money,  is  precisely  as  in- 
capable of  being  maintained,  as  a  distinction  between  the  right 
to  sentence  a  human  being  to  death  and  a  right  to  sentence  him 
to  a  total  privation  of  sustenance  during  life."  ^*  So  equity  will 
interfere  by  injunction  to  prevent  a  city's  unlawful  attempt  to 
destroy  by  ordinance  a  railroad  company's  franchise,  and  it 
constitutes  no  ground  for  a  refusal  to  so  interfere  that  the 
ordinance  is  quasi  criminal  in  character  or  that  acts  consti- 
tuting personal  trespasses  accompany  the  attempted  destruc- 
tion of  said  franchise.®^    A  Circuit  Court  of  the  United  States 

87  Syllabus  in  Lewis  Pub.  Co.  v.  Wyman,  168  Fed.  7.56. 

88  Osborn  v.  United  States  Bank,  9  Wheat.  (22  U.  S.)  738,  862,  6  L.  ed. 
204;  quotation  is  from  Mr.  Chief  Justice  Marshall.     See  §  257,  herein. 

69  Port  of  Mobile  v.  Louisville  &  Nashville  Rd.  Co.,  84  Ala.  116,  4  So.  106, 
5  Am.  St.  Rep.  342. 

088 


EQUITABLE    REMEDIES  §  430 

may  also  restrain  the  enforcement  of  a  city  ordinance  under 
which  it  is  sought  to  forfeit  a  railroad  company's  right  in  the 
streets  where,  upon  the  allegations  of  the  complaint,  the  breach 
of  condition  upon  which  the  forfeiture  was  sought  is  denied.'" 
Again,  where  a  street  railway  corporation  has  expended  large 
sums  of  money  and  exercised  due  diligence  in  building  and 
operating  its  road,  so  as  to  comply  with  an  ordinance  of  per- 
mission, but  unforeseen  circumstances  have  caused  a  delay, 
which  has  occasioned  no  pecuniary  injury  to  the  township  or  its 
inhabitants,  equity  will  interfere  to  restrain  the  adoption  of  an 
ordinance  by  the  township  declaring  a  forfeiture  of  the  franchise 
of  the  corporation  because  it  did  not  comply  with  the  statute 
of  permission,  which  provided  that  cars  should  be  running  at  a 
certain  headway,  on  a  continuous  line  of  double  track,  within  a 
specified  time 7^ 

Where  a  suit  was  brought  in  pursuance  of  a  statute  to  enjoin 
the  maintenance  of  toll  gates  upon  a  road  alleged  to  be  a  public 
highway  it  was  held  that  where  the  charter  of  the  toll  road 
provided  that  the  privileges  granted  should  continue  fifty  years 
subject  to  the  right  of  the  county  to  acquire  it  after  twenty 
years,  all  privileges  ceased  on  the  expiration  of  the  fifty  years; 
and  the  owner  of  the  franchise  was  not  deprived  of  his  property 
without  due  process  of  law,  also  that  the  contract  in  the  charter 
was  not  impaired,  by  the  injunction,  from  further  maintaining 
toll  gates  on  such  road  7^ 

§  430.  Injunction— Criminal  Proceedings— When  Equity 
Cannot  and  Can  Enjoin. 

A  court  of  equity  has  no  general  power  to  enjoin  or  stay 
criminal  proceedings  unless  they  are  instituted  by  a  party  to  a 
suit  already  pending  before  it,  and  to  try  the  same  right  that  is 
in  issue  there,  or  to  prohibit  the  invasion  of  the  right  of  property 

70  Iron  Mountain  Ry.  Co.  v.  Memphis  (U.  S.  C.  C.  A.),  96  Fed.  113,  37 
C.  C.  A.  410. 

n  North  Jersey  Ry.  Co.  v.  South  Orange,  58  N.  J.  Eq.  83,  43  Atl.  53. 

72  Scott  County  Macadamized  Road  Co.  v.  Hines,  215  U.  S.  336,  54  L.  ed. 
,  30  Sup.  Ct.  — ,  aif' g  207  Mo.  54. 

44  689 


§  431  EQUITA15LE    REMEDIES 

or  the  enforcement  of  an  unconstitutional  law7^  But  where 
property  rights  will  be  destroyed,  unlawful  interference  by 
criminal  proceedings  under  a  void  law  or  ordinance  may  be 
reached  and  controlled  by  a  court  of  equity.'^''  Again,  while  a 
Federal  Court  cannot  interfere  in  a  criminal  case  already  pend- 
ing in  a  State  Court,  and  while,  as  a  general  rule,  a  court  of 
equity  cannot  enjoin  criminal  proceedings,  these  rules  do  not 
apply  when  such  proceedings  are  brought  to  enforce  an  alleged 
unconstitutional  State  statute,  after  the  unconstitutionality 
thereof  has  become  the  subject  of  inquiry  in  a  suit  pending  in  a 
Federal  Court  which  has  first  obtained  jurisdiction  thereover; 
and  under  such  circumstances  the  Federal  Court  has  the  right  in 
both  civil  and  criminal  cases  to  hold  and  maintain  such  jurisdic- 
tion to  the  exclusion  of  all  other  courts.'''^  So  where  a  bill  was 
brought  against  a  number  of  district  attorneys  to  enjoin  them 
from  instituting  actions  against  a  telegraph  company  to  recover 
certain  penalties  provided  for  by  a  State  statute  for  noncon- 
formity with  conditions  precedent  to  doing  business  in  the 
State,  imposed  upon  foreign  corporations,  it  was  held  that,  in- 
dividuals, who,  as  officers  of  the  State,  are  clothed  with  some 
duty  in  regard  to  the  enforcement  of  the  laws  of  the  State,  and 
who  threaten  and  are  about  to  commence  proceedings,  either  of 
a  civil  or  a  criminal  nature,  to  enforce  against  parties  affected  an 
unconstitutional  act,  violating  the  Federal  Constitution,  may 
be  enjoined  by  a  Federal  court  of  equity  from  such  action;  and 
such  an  action  is  not  prohibited  by  the  Eleventh  Amendment 
of  the  Constitution  of  the  United  States  7^ 

§431.  Injunction — Nuisances— Bill  in  Equity  to  Abate. 

WTiere  one  has  a  grant  of  a  ferry,  bridge  or  road,  with  the 

73  Davis  &  Farnum  Mfg.  Co.  v.  Los  Angeles,  189  U.  S.  207,  47  L.  ed.  778, 
23  Sup.  Ct.  498;  Sawyer,  In  re,  124  U.  S.  200,  31  L.  ed.  402,  8  Sup.  Ct. . 

74  Dobbins  v.  Los  Angeles,  195  U.  S.  223,  49  L.  ed.  169,  25  Sup.  Ct.  18. 

75  Young,  Ex  parte,  209  U.  S.  123,  52  L.  ed.  714,  28  Sup.  Ct.  44. 

76  Western  Union  Teleg.  Co.  v.  Andrews,  216  U.  S.  165,  54  L.  ed. ,  30 

Sup.  Ct.  ,  following  Young,  Ex  parte,  209  U.  S.  123,  52  L.  ed.  714,  28 

Sup.  Ct.  441.  See  §  155,  herein;  see  Ludwig  v.  Western  Union  Teleg.  Co., 
216  U.  S.  146,  54  L.  ed.  ,  30  Sup.  Ct.  . 

690 


E(2UrrABLE    REMEDIES  §  432 

exclusive  right  of  taking  toll,  the  ereetion  of  anothoi-  ferry, 
bridge,  or  road,  so  near  it  as  to  create  a  competition  injurious 
to  such  franchise,  is,  in  respect  to  such  franchise,  a  nuisance; 
and  the  court  will  grant  a  perjx^tual  injunction  to  secure  the 
enjoyment  of  the  statute  franchise,  and  prevent  the  use  of  the 
rival  establishment."  In  a  suit  for  the  abatement  of  a  nuisance, 
a  court  of  equity  confining  its  inquiries  within  the  limits  of  its 
local  jurisdiction,  must  be  governed  by  the  same  rules  which  a 
court  of  law  would  act  upon  in  trying  an  indictment  for  the  same 
nuisance,  and  the  rule  of  law  is  that  where  a  bridge  over  a  navi- 
gable stream  is  erected  for  public  purposes,  and  produces  a  pub- 
lic benefit,  and  leaves  a  reasonable  space  for  the  passage  of 
vessels,  it  is  not  indictable.  Another  rule  of  law  is  that  the 
bridge  must  appear  plainly  to  be  a  nuisance  before  it  can  be 
so  decreed;  since  a  court  of  equity  proceeding  by  bill,  like  a 
criminal  court  trying  an  indictment,  must  give  the  benefit  of  all 
reasonable  doubts  to  the  defendant.'* 

§  432.  Injunction— Nuisances —Parties— State  or  At- 
torney-General— Corporations — Joinder. 

When  the  States  by  their  union  made  the  forcible  abatement 
of  outside  nuisances  impossible  to  each,  they  did  not  thereby 
agree  to  submit  to  whatever  might  be  done.  They  retained  the 
right  to  make  reasonable  demands  on  the  grounds  of  their  still 
remaining  quasi  sovereign  interests,  and  the  alternative  to  force 
a  suit  in  the  Federal  Supreme  Court.  So  that  court  has  j  uiisdic- 
tion  to,  and  at  the  suit  of  a  State  will,  enjoin  a  corporation, 
citizen  of  another  State,  from  discharging  over  its  territory 
noxious  fumes  from  works  in  another  State  where  it  appears 
that  those  fumes  cause  and  threaten  damage  on  a  considerable 
scale  to  the  forests  and  vegetable  life,  if  not  to  health,  within 
the  plaintiff's  State.  A  suit  brought  by  a  State  to  enjoin  a  cor- 
poration having  its  works  in  another  State  from  discharging 
noxious  gases  over  its  territory  is  not,  however,  the  same  as  one 

77  Newburgh  Turnpike  Co.  v.  Miller,  5  Johns.  Ch.  101,  9  Am.  Dec.  274. 

78  Mississippi  &  Missouri  Rd.  Co.  v.  Ward,  2  Black  (67  U.  S.),  485,  17  L. 
ed.  311. 

691 


&  432  EQUITABLE    REMEDIES 

between  private  parties,  and  although  the  elements  \\hich  would 
form  the  l^asis  of  relief  between  private  parties  are  wanting,  the 
State  can  maintain  the  suit  for  injury  in  a  capacity  as  quasi 
sovereign,  in  which  capacity  it  has  an  interest  independent  of 
and  behind  its  citizens  in  all  the  earth  and  air  within  its  do- 
main; and  whether  insisting  upon  bringing  such  a  suit  results 
in  more  harm  than  good  to  its  citizens,  many  of  whom  may 
profit  through  the  iimintenance  of  the  works  causing  the  nui- 
sance, is  for  the  State  itself  to  determine/*' 

In  an  Oklahoma  case  the  county  attorney,  acting  under  the 
provisions  of  a  statute  providing  that  an  injunction  could  be 
granted  to  enjoin  and  suppress  the  keeping  of  a  common  nui- 
sance, began  certain  suits  of  the  character  stated  below,  securing 
injunctive  relief  without  bond,  upon  a  petition  verified  upon  in- 
formation and  belief.  The  position  taken  by  him  was  that  a 
monopoly  or  combination  in  restraint  of  trade  was  a  public 
or  common  nuisance,  and  as  such  that  courts  of  equity  at  the 
instance  of  the  public  prosecutor  had  the  power  to  suppress  the 
same.  So  where  it  was  alleged  that  certain  parties  in  violation 
of  such  act  of  the  territorial  legislature  had  entered  into  and  be- 
come members  of  a  pool,  trust,  agreement,  combination  and 
understanding  with  each  other  to  create  a  monopoly  in  the 
business  of  buying  and  selling  lumber,  coal  and  grain,  and  that, 
acting  thereunder,  they  were  enabled  to  and  were  charging 
the  public  unjust,  unreasonable  and  exorbitant  prices  for  such 
commodities,  and  preventing  others  from  engaging  in  such 
business,  such  acts  constitute  a  public,  common  nuisance,  and 
the  parties  thereto  may  be  restrained  as  provided  for  by  stat- 
ute *"  at  the  suit  of  the  county  attorney .^^    But  a  railroad  cor- 

79  Georgia  v.  Tennessee  Copper  Co.,  206  U.  S.  230,  51  L.  ed.  1038,  27  Sup. 
Ct.  618. 

80  Wilson's  Rev.  &  Am.  St.  Okla.,  1903,  §  4440. 

81  Territory  v.  Long  Bell  Lumber  Co.,  22  Okla.  890,  99  Pac.  911.  The 
court,  per  Dunn,  J.,  said:  "It  will  be  noted  that  the  petitions  allege  that  the 
defendants  have  become  members  of  a  pool,  trust,  agreement,  combination, 
and  understanding  with  each  other  to  regulate  and  fix  the  price  of  lumber, 
coal  and  grain  and  to  prevent  and  restrict  competition  in  the  sale  thereof, 
and  that  by  virtue  of  being  thus  federated  together,  have  so  controlled  all 
the  business  of  buying  and  selling  such  commodities  in  the  towTi  of  King- 

692 


EQUITABLE    REMEDIES  §  432 

poration  cannot  by  the  general  principles  of  equity  jurispru- 
dence, maintain  a  suit  for  an  injunction,  as  for  a  nuisance, 
against  the  keepers  of  saloons  near  the  line  of  its  road,  at 
which  workmen  buy  intoxicating  liquors  and  get  so  drunk  as 

fisher  as  to  create  a  monopoly  for  their  benefit  and,  l>y  charging  unjust,  un- 
reasonable, exorbitant  prices  for  these  commodities,  their  acts  have  been 
and  are  greatly  to  the  injury  of  the  people  of  the  county  of  Kingfisher  and 
the  territory  of  Oklahoma;  that,  by  means  of  said  confederation,  combina- 
tion and  monopoly,  they  are  enabled  to  and  do  ke(!p  other  persons  desiring 
to  enter  said  business  from  doing  so,  and  arbitrarily  fix  the  price  which  .shall 
be  paid  for  such  commodities,  and  also  the  price  at  which  they  shall  be  sold 
to  consumers,  and  that  they  have  thereby  completely  excluded  competition 
in  these  lines.  *  *  *  Forestalling  and  engrossing  in  the  purchase  of 
commodities  in  common  use  were  at  an  (>;irly  date  condemned  by  the  lOng- 
lish  Parliament,  being  made  punishable  by  fine  and  imprisonment,  and 
courts  have  uniformly  denied  to  parties  to  contracts  in  restraint  of  trade 
their  remedies  and  relief.  Nearly  all  of  the  States  of  the  Union,  as  well  as 
the  Federal  Government,  have  provisions  either  in  their  constitutions  or 
statutes  making  them  illegal  and  bringing  them  under  the  ban  of  prosecu- 
tion on  the  part  of  the  State.  Where  corporations  are  shown  to  have  Ijeen 
involved,  they  have  been  proceeded  against  by  quo  warranto,  People  v. 
North  River  Sugar  Refining  Co.,  22  Abb.  N.  C.  164,  3  N.  Y.  Supp.  401; 
State  ex  rel.  Snyder  v.  Portland  Natural  Gas  &  Oil  Co.,  153  Md.  483,  53 
N.  E.  1089,  53  L.  R.  A.  413,  74  Am.  St.  Rep.  314;  State  ex  rel.  v.  Standard 
Oil  Co.,  49  Ohio  St.  137,  30  N.  E.  279,  15  L.  R.  A.  145,  34  Am.  St.  Rep.  541; 
National  Cotton  Oil  Co.  v.  Texas,  197  U.  S.  115,  25  Sup.  Ct.  379,  49  L.  ed. 
689,  or  they  have  been  prosecuted  under  the  criminal  provisions  of  the  stat- 
ute, Smiley  v.  Kansas,  196  U.  S.  447,  25  Sup.  Ct.  289,  49  L.  ed.  546,  or  the 
State  has  proceeded  against  them  by  injunction  to  prevent  a  continuation 
of  their  illegal  practices.  Gulf,  Colorado  &  Santa  Fe  Ry.  Co.  et  al.  v.  State 
of  Texas,  72  Tex.  404,  10  S.  W.  81,  1  L.  R.  A.  849,  13  Am.  St.  Rep.  815,  or 
the  parties  thereto  have  been  indicted  and  prosecuted  for  conspiracy, 
People  V.  Sheldon  et  al.,  139  N.  Y.  251,  34  N.  E.  785,  23  L.  R.  A.  221,  36 
Am.  St.  Rep.  690;  People  v.  Duke,  19  Misc.  Rep.  292,  44  N.  Y.  Supp.  336; 
State  ex  rel.  Durner  v.  Huegin,  110  Wis.  189,  85  N.  W.  1046,  62  L.  R.  A. 
700;  State  v.  Eastern  Coal  Co.  et  al.  (R.  I.),  70  Atl.  1.  The  State  of  Con- 
necticut proceeded  by  mandamus  in  one  instance  against  a  railroad  com- 
pany compelling  it  to  reinstate  train  service  which  it  had  ceased  under  con- 
tract made  with  a  competing  carrier.  State  v.  Hartford  <fe  New  Haven  Ry. 
Co.,  29  Conn.  538.  The  foregoing  cases  exemplify  some  of  the  different 
remedies  which  have  heretofore  been  applied  to  relieve  the  public  of  the 
effect  of  unlawful  combinations  restrictive  of  free  competition,  and  now  we 
are  called  on  to  say  whether  or  not  combinations  such  as  are  delineated  in 
the  petitions  herein  may  be  proceeded  against  in  yet  an  additional  way,  as 
for  a  nuisance;  the  question  being:  Do  their  acts  produce  such  a  condition 
as  to  bring  them  within  the  terms  of  our  statute,  to  the  end  that  their  con- 

093 


§  433  EQUITABLE    REMEDIES 

to  be  unfit  for  work.^^  Where  a  nuisance  has  been  erected,  and 
is  maintained  by  several  persons  or  corporations,  those  who 
are  not  within  the  jurisdiction  of  the  court  need  not  be  joined 
as  parties  defendants  in  a  bill  in  equity  to  abate  such  nuisance.*^ 

§  433.  Injunction  to  Restrain  Enforcement  of  Orders  of 
Interstate  Commerce  Commission.*'* 

In  an  action  in  the  Federal  Supreme  Court  a  bill  was  brought 
to  restrain  the  enforcement  of  an  order  of  the  Interstate  Com- 
merce Commission.  A  preliminary  injunction  was  granted  on 
the  ground  that  the  commission  had  exceeded  its  powers  and 
the  case  was  taken  to  the  Supreme  Court  by  appeal.  The  order 
was  made  in  a  proceeding  instituted  by  the  commission  upon 
its  own  motion,  and  required  the  establishment  of  through 
routes  and  joint  rates,  for  passengers  and  their  baggage,  east 
and  west,  from  and  to  certain  points  on  three  different  railroads. 
The  joint  rates  were  to  be  the  same  as  certain  existing  rates  be- 
tween the  same  points  on  one  of  said  railroads  and  its  connec- 

tinuance  may  be  restrained  at  the  instance  of  a  county  attorney  on  a  peti- 
tion supported  by  his  oath  or  affirmation,  upon  information  and  behef  and 
without  a  bond?  The  Hght  in  which  they  are  held  by  the  courts  is  manifest 
from  expressions  contained  in  all  of  the  cases  where  they  have  been  before 
them.  A  few  of  the  list  and  which  might  easily  be  extended  are  as  follows: 
Butchers'  Union  Co.  v.  Cresent  City  Co.,  HI  U.  S.  746,  4  Sup.  Ct.  652,  28 
L.  ed.  585;  Richardson  v.  Buhl.  77  Mich.  632,  43  N.  W.  1102,  6  L.  R.  A.  457; 
Craft  et  al.  v.  McConoughy,  79  111.  346,  22  Am.  St.  Rep.  171;  Morris  Rim  Coal 
Co.  V.  Barclay  Coal  Co.,  68  Pa.  St.  173,  8  Am.  St.  Rep.  159;  Charles  River 
Bridge  Co.  v.  Warren  Bridge  et  al.,  11  Pet.  420,  9  L.  ed.  773;  Tuscaloosa  Ice 
Mfg.  Co.  V.  Williams,  127  Ala.  110,  28  So.  669,  50  L.  R.  A.  175,  85  Am.  St. 
Rep.  125." 

82  Northern  Pac.  R.  Co.  v.  Whalen,  149  U.  S.  157,  13  Sup.  Ct.  822,  37  L. 
ed.  686. 

83  Mississippi  &  Missouri  Rd.  Co.  v.  Ward,  2  Black  (67  U.  S.),  485,  17  L. 
ed.  311.  The  nuisance  complained  of  here  was  a  bridge  across  the  Mississippi 
River  where  that  river  divides  the  States  of  Illinois  and  Iowa,  the  State 
line  being  in  the  middle  of  the  river,  and  it  was  held  that  as  the  river 
was  a  boundary  line  between  States  throughout  nearly  its  whole  length, 
judicial  difficulties  existed  in  dealing  with  nuisances  between  its  shores 
which  could  only  be  removed  by  legislation;  the  court  also  refused  to  decree 
a  partial  removal. 

»*  See  §§  131-137,  herein. 

094 


EQUITABLE    REMEDIES  §  433 

tions.  The  order  in  question  concerned  passenger  travel  in  one 
direction  only,  and  did  not  affect  round  trips  and  did  not  deal 
with  freight.  It  was  held  by  the  Supreme  Court  that  under  the 
act  of  Congress  ^^  giving  the  Interstate  Commerce  Commission 
power  to  establish  through  routes  and  joint  rates  where  no 
reasonable  or  satisfactory  through  route  exists,  the  existence 
of  such  route  may  be  inquired  into  by  the  courts,  notwithstand- 
ing a  finding  by  the  commission.  It  was  also  held  that  when  one 
through  route  exists  which  is  reasonable  and  satisfactory,  the 
fact  that  the  public  would  prefer  a  second  which  is  no  shorter 
or  better  cannot  overcome  the  natural  interpretation  of  a  pro- 
vision in  the  statute  to  the  effect  that  jurisdiction  exclusively 
depends  upon  the  fact  that  no  reasonable  or  satisfactory  route 
exists.  It  was  further  determined  that  as  the  Northern  Pacific 
route  from  the  points  named  to  points  between  Portland  and 
Seattle  is  reasonable  and  satisfactory,  the  fact  that  there  are 
certain  advantages  in  the  Union  Pacific  or  Southern  route  does 
not  give  the  Interstate  Commerce  Commission  jurisdiction  to 
establish  the  latter  as  a  through  route  against  the  objection  of 
the  Northern  Pacific  Railway  Company.*^ 

In  another  case  where  a  bill  in  equity  was  brought  to  prevent 
the  enforcement  of  an  order  made  by  the  Interstate  Commerce 
Commission  requiring  the  plaintiff  to  establish  a  switch  connec- 
tion with  a  branch  railroad,  a  preliminary  injunction  was  issued 
on  the  ground  that  said  commission  had  exceeded  its  powers, 
and  an  appeal  was  taken  directly  to  the  Federal  Supreme  Court 
which  affirmed  said  decree,  holding  that  where  a  statute  creates 
a  new  right  and  a  commission  is  given  power  to  extend  relief  in 
regard  thereto  at  the  instance  of  a  specified  class,  its  power  is 
limited  thereto,  and  that  said  Interstate  Commerce  Commission 
had  power  to  compel  such  connections  with  lateral  branch  roads 
under  the  act  of  Congress,*^  only  at  the  instance,  as  stated 

85  Section  4,  act  of  June  29,  1906,  chap.  3591,  34  Stat.  589. 

86  Interstate  Commerce  Commission  v.  Northern  Pacific  Ry.  Co.,  216 
U.  S.  538,  54  L.  ed. ,  30  Sup.  Ct. . 

87  Section  1  of  the  act  of  March  4,  1887,  chap.  104,  24  Stat.  379,  as  amended 
by  §  1  of  the  act  of  June  29,  1906,  chap.  3591,  34  Stat.,  584. 

cm 


§§  434,  435  EQUITABLE    REMEDIES 

therein,  of  shippers,  and  that  it  had  no  power  to  do  so  on  the 
appHcation  of  a  branch  railroad.^* 

§  434.  Bill  Lies  in  Equity  to  Revise  Ruling  of  Railroad 
Commissioners.*^'* 

Where  railroad  commissioners  approve  an  extension  of  the 
location  of  the  tracks  of  a  street  railway  company  it  will  be 
assumed  that  a  bill  in  equity  may  be  maintained  to  the  extent 
of  revising  the  rulings  of  such  commissioners  somewhat  as  a 
bill  in  equity  may  be  maintained  to  revise  the  action  of  the 
insolvency  courts.  Where,  however,  such  a  bill  discloses  nothing 
of  which  the  plaintiffs  are  entitled  to  complain,  such  extension 
of  location  approved  by  said  board  will  not  be  declared  void.^" 

§  435.  Equity— Cancellation  and  Rescission. 

Equity  will  rescind  a  contract  which  has  been  induced  by  a 
false  representation  concerning  a  material  fact,  upon  which  the 
party  had  a  right  to  rely,  even  though  the  representing  party 
was  ignorant  of  its  truth  or  falsity.^^  But  where  the  representa- 
tions made  to  induce  giving  a  release  to  a  railroad  company  for 
personal  injuries  did  not  constitute  an  inducement  to  execute 
the  release  it  will  not  be  set  aside  in  equity.^^  Equity  also  has 
jurisdiction  to  entertain  a  bill  seeking  not  only  a  cancellation  for 
fraud  of  a  note  and  mortgage  of  a  corporation  but  also  of  a  bill 
to  restrain  their  collection  where  such  remedy  constitutes 
merely  a  claim  for  relief  ancillary  to  that  of  cancellation.'''''  Al- 
though there  may  be  a  cancellation  or  rescission  of  a  contract 
in  equity,  still  the  power  of  the  court  does  not  authorize  it 
to  substitute  therefor  a  new  and  different  contract  from  that 
which  the  parties  intended.**^ 

88  Interstate  Commerce  Commission  v.  Delaware,  Lackawamia  &  Western 

Ry.  Co.,  216  U.  S.  531,  54  L.  ed. ,  30  Sup.  Ct. ,  aff'g  166  Fed.  498. 

8»  See  §§  139  ei  seq.,  herein. 

90  Daniels  v.  Commonwealth  Ave.  St.  Ry.  Co.,  175  Mass.  518,  56  N.  E.  715. 

»i  Grosh  V.  Ivanhoe  Land  &  I.  Co.,  95  Va.  161,  27  S.  E.  841. 

92  Kane  v.  Chester  Traction  Co.,  1S6  Pa.  St.  145,  40  Atl.  320. 

93  Hodson  V.  Eugene  Glass  Co.,  156  111.  397,  40  N.  E.  971,  aff'g  54  111. 
App.  248. 

94  Pittsburg  &  L.  A.  Iron  Co.  v.  Lake  Superior  Iron  Co.,  118  Mich.  109, 
5  Det.  L.  N.  457,  76  X.  W.  395. 

696 


EQUITABLE    REMEDIES  §  435 

Again,  although  equity  has  power  to  order  the  dehvery  up 
and  cancellation  of  a  policy  of  insurance  obtained  on  fraudulent 
representations  and  suppression  of  facts,  yet  it  will  not  gener- 
ally do  so,  when  these  representations  and  suppressions  can  be 
jx'rfcctly  well  used  as  a  defense  at  law  in  a  suit  upon  the  policy. 
So  a  bill  for  such  a  delivery  up  and  cancellation  has  been  held 
properly  "dismissed  without  prejudice,"  even  though  the  evi- 
dences of  the  fraud  were  considerable,  there  being  no  allegation 
that  the  holder  of  the  policy  meant  to  assign  it;  and  suit  on  the 
policy  having,  after  the  bill  was  filed,  been  begun  at  law."^ 
But  where  a  national  bank  commenced  a  suit  in  a  Federal 
Circuit  Court  to  have  an  assessment  of  the  shares  of  its  capital 
stock,  made  by  State  officers,  canceled,  declared  invalid,  or 
modified,  and  the  defendants  demurred  upon  the  ground  that 
the  remedy  was  in  equity,  it  was  held  that  although  in  the 
State  Courts  there  existed  no  distinction  between  legal  and 
equitable  remedies  and  the  proceeding  might  have  been  in  ac- 
cordance with  the  practice  in  the  State  Courts,  still  the  plain- 
tiff's remedy  must  be  brought  in  the  form  of  a  suit  in  equity 
according  to  the  practice  in  the  Federal  Courts  and  that  the 
demurrer  should  be  sustained. ^^ 

If  there  has  been  no  newly  discovered  evidence,  a  bill  in 
equity  will  not  lie  to  cancel  a  contract  or  enjoin  a  judgment 
thereon,  where  the  complainant,  against  whom  it  was  rendered, 
sets  up  as  grounds  of  relief  matters  which  he  had  full  oppor- 
tunity to  plead  in  the  action  at  law.^'  Equity  will  not  at  the 
instance  of  the  seller,  rescind  a  contract  of  sale  of  personal 
property  to  a  corporation  upon  the  ground  that  at  that  time 
the  corporation  was  insolvent  unless  the  officers  knew  that  there 
was  no  reasonable  probability  of  meeting  the  obligation  thus 
incurred  when  it  matured.^* 

95  Insurance  Co.  v.  Bailey,  13  Wall.  (80  U.  S.)  616.  See  also  Security 
Trust  Co.  V.  Tarpey,  66  III.  App.  589;  John  Hancock  Mut.  L.  Ins.  Co.  v. 
Dick,  114  Mich.  337,  43  L.  R.  A.  566,  4  Det.  L.  N.  607,  72  N.  W.  179. 

8«  Lindsay  v.  First  Nat.  Bank,  Shreveport,  156  U.  S.  485,  39  L.  ed.  505, 
15  Sup.  Ct.  472. 

97  Life  Insurance  Co.  v.  Bangs,  103  U.  S.  780,  26  L.  ed.  608. 

98  Edelhoff  V.  Horner-Miller  Straw  Goods  Mfg.  Co.,  86  Md.  595,  39  Atl.  314. 

697 


I  435  EQUITABLE    REMEDIES 

In  a  case  in  the  Federal  Supreme  Court  the  following  facts 

appeared: 

The  city  of  Galesburg,  Illinois,  by  an  ordinance,  granted  to 
one  Shelton,  and  his  assigns,  in  May,  1883,  a  franchise  for  thirty 
years,  to  construct  and  maintain  watei-works  for  supplying  the 
city  and  its  inhabitants  with  water  for  pubhc  and  private  uses, 
the  city  to  pay  a  specified  rent,  for  five  hydrants,  and  a  tariff 
being  fixed  for  charges  for  water  to  consumers.  In  Decem- 
ber, 1883,  the  waterworks  were  completed  by  a  water  company 
to  which  Shelton  had  assigned  the  franchise,  and  a  test  required 
by  the  ordinance  was  satisfactorily  made,  and  the  city,  by  a 
resolution,  accepted  the  works.  The  water  furnished  by  the 
company  for  nine  months  was  unfit  for  domestic  purposes. 
After  November,  1884,  the  supply  of  water  was  inadequate  for 
the  protection  of  the  city  from  fire,  and  its  quaUty  was  no  better 
than  before.  During  eighteen  months  after  December,  1883, 
the  company  had  ample  time  to  comply  with  the  contract.  The 
city,  by  a  resolution  passed  June  1, 1885,  repealed  the  ordinance, 
and  then  gave  notice  to  the  company  that  it  claimed  title  to 
certain  old  water  mains  which  it  had  conditionally  agreed  to 
sell  to  Shelton,  and  of  which  the  company  had  taken  posses- 
sion. The  city  then  took  possession  of  the  old  mains,  and,  in 
June,  1885,  filed  a  bill  in  equity  against  the  water  company 
to  set  aside  the  contract  contained  in  the  ordinance  and  the 
agreement  for  the  sale  of  the  old  mains.  In  August,  1883,  the 
company  executed  a  mortgage  to  a  trustee  on  the  franchise  and 
works,  to  secure  sundry  bonds  which  were  sold  to  various  pur- 
chasers in  1884  and  1885.  The  interest  on  them  being  in  de- 
fault, the  trustee  foreclosed  the  mortgage  by  a  suit  brought  in 
November,  1885,  and  the  property  was  bought  by  a  committee 
of  the  bondholders,  in  November,  1886.  In  February,  1886, 
the  trustee  had  been  made  a  party  to  the  suit  of  the  city.  After 
their  purchase,  the  members  of  the  committee  were  also  made 
parties  and  they  filed  a  cross  bill,  praying  for  a  decree  for  the 
amount  due  by  the  city  for  water  rents,  and  for  the  restoration 
to  them  of  the  old  mains,  and  for  an  injuncrion  against  the  city 
from  interfering  with  the  operation  of  the  works.  After  issue, 
698 


EQUITABLE    REMEDIES  §  436 

proofs  were  taken.  It  was  held:  tliat  the  supply  of  water  was 
not  in  compHance  with  the  contract,  in  cjuantity  or  quality; 
that  the  taking  possession  by  the  city  of  the  old  mains  was 
necessai-y  for  the  protection  of  the  city  from  fires;  that  the  con- 
tract of  the  city  for  the  sale  of  the  old  mains  was  conditional 
and  was  not  executed;  that  the  city  was  not  estopped,  as  against 
the  bondholders,  from  refusing  to  pay  the  rent  for  the  hydrants, 
which,  by  the  mortgage,  was  to  be  api:)lied  to  pay  the  interest 
on  the  bonds,  or  from  having  the  contract  canceled;  that  the 
obligation  of  Shelton  and  his  assigns  was  a  continuing  one,  and 
their  right  to  the  continued  enjoyment  of  the  consideration  for 
it,  was  dependent  on  their  continuing  to  perform  it;  that  the 
bondholders  were  bound  to  take  notice  of  the  contents  of  the 
ordinance  before  purchasing  their  bonds,  and  purchased  and 
held  them  subject  to  the  continuing  compliance  of  the  company 
with  the  terms  of  the  ordinance.  In  regard  to  the  old  mains, 
the  lien  of  the  mortgage  was  held  subject  to  the  conditions  of 
the  agreement  for  the  sale  of  them  by  the  city  to  Shelton;  and  a 
suit  by  the  city  for  a  specific  performance  of  the  contract,  or  one 
to  recover  damages  for  its  nonperformance,  would  be  a  wholly 
inadequate  remedy  in  the  case;  and  a  decree  was  held  proper 
annulling  the  ordinance  and  the  agreement;  dismissing  the 
cross  bill ;  directing  the  city  to  pay  into  court,  for  the  use  of  the 
cross  plaintiffs,  three  thousand  dollars,  as  the  value  of  the  use 
of  the  water  by  the  city  from  December,  1883,  to  June,  1885; 
and  dividing  the  costs  of  the  suit  equally  between  the  city  and 
the  cross  plaintiffs.^^ 

§  436.  Cancellation,  Rescission  or  Setting  Aside  Sale  of 
Corporate  Stock — Contracts  to  Prevent  Competition — Pre- 
tended Purchase  of  Stock. 

If  a  stock  subscription  is  obtained  through  fraud,  equity  may 
decree  a  cancellation.^     Such  a  suit  may  be  maintained  by  a 

fl»  Farmers'  Loan  &  T.  Co.  v.  Galesburg,  133  U.  S.  156,  34  L.  ed.  573,  10 
Sup.  Ct.  316. 

1  Negley  v.  Hagerstown  Mfg.  M.  &  L.  Imp.  Co.,  88  Md.  692,  39  Atl.  506. 
See  also  Ryan  v.  Seaboard  &  Rd.  Co.  (U.  S.  C.  C),  89  Fed.  397;  Bosley  v. 
National  Machine  Co.,  123  N.  Y.  550,  34  N.  Y.  St.  Rep.  277,  25  N.  E.  990; 

009 


§  436  EQUITABLE    REMEDIES 

stockholder  in  his  own  behalf  and  in  that  of  others  who  may 
join.-  \\Tiere  a  bill  is  brought  in  a  court  of  equity  by  minority 
stockholders  to  cancel  and  set  aside  a  sale  of  corporate  stock 
purchased  by  a  corporation  to  obtain  a  controlling  interest  in 
another  corporation  and  to  thus  stifle  competition  the  court 
will  give  substantial  and  permanent  relief  by  requiring  the 
surrender  of  the  stock  to  the  rightful  owners  upon  equitable 
terms  and  the  court  should  not  limit  the  relief  to  be  granted 
to  an  injunction  against  said  purchaser  corporation  exercising 
the  rights  of  a  stockholder  and  from  receiving  any  dividends 
upon  the  stock  in  question.  In  such  a  case  where  the  bill 
prayed  also  for  an  injunction  and  for  other  relief  upon  the 
ground  that  the  pretended  purchase,  in  its  necessary  operation 
at  the  time  it  was  made,  tended  and  tends  to  materially  sup- 
press competition  and  creates  a  monopoly  in  the  rendering  of 
telephone  service  throughout  the  United  States  and  that  it  was 
illegal  and  void  because  contrary  to  the  public  policy  of  the 
State,  it  was  held  that  a  violation  of  the  Antitrust  Act  of  the 
State  ^  was  not  necessary  to  be  proven  to  maintain  the  action  or 
defense,  and  also  that  it  was  not  necessary  that  the  proof  should 
exclude  every  reasonable  doubt  of  the  averments  of  the  bill  to 
justify  a  decree  in  complainant's  favor.  Such  violation,  how- 
ever, was  not  charged  in  the  pleadings.  As  a  general  proposi- 
tion, all  contracts  and  agreements,  of  every  kind  and  character, 
made  and  entered  into  by  those  engaged  in  an  employment  or 
business  impressed  with  a  public  character,  which  tend  to  pre- 
vent competition  between  those  engaged  in  like  emplo5anent,  are 
opposed  to  the  public  policy  of  the  State  and  are  therefore  un- 
lawful. All  agreements  and  contracts  tending  to  create  mo- 
Pennsylvania  Co.  for  Ins.  on  Lives,  etc.,  v.  Franklin  F.  Ins.  Co.,  181  Pa.  St. 
40,  40  Wkly.  N.  C.  145,  37  L.  R.  A.  780,  37  Atl.  191. 

2  Stebbins  v.  Perry  County,  167  111.  567,  47  N.  E.  1048,  rev'g  66  111.  App. 
427. 

3  Sections  1-4  of  Antitrust  Act  of  1891  and  §§  1-6  of  the  Antitrust  Act  of 
1893,  chap.  38,  §§  269a  to  269f;  Hurd's  Rev.  Stat,  of  1905  (the  Law  of  1893 
was  held  unconstitutional  by  the  Supreme  Court  of  the  L^nited  States  in 
Connolly  v.  Union  Sewer  Pipe  Co.,  184  U.  S.  540,  46  L.  ed.  679,  22  Sup. 
Ct.  431). 

700 


EQUITABLE    REMEDIES  §  437 

nopolies  and  prevent  proper  competition  are  by  the  common  law 
illegal  and  void,  and  a  State  Constitution  which  provides  that 
the  general  assembly  shall  pass  no  local  or  special  law  for 
"granting  to  any  corporation,  association  or  individual  any 
special  or  exclusive  privilege  or  franchise  whatever,'""  is  a  clear 
declaration  that  the  public  policy  of  such  State  is  opposed  to  all 
exclusive  and  monopolistic  franchises  and  powers,  of  whatso- 
ever kind  or  character.  And  this  applies  to  contracts  entered 
into,  of  the  character  above  stated,  whereby  one  corporation 
attempts  to  acquire  the  control  of  another  corporation,  coupled 
with  a  pretended  purchase  of  the  stock  of  the  latter,  and  such 
contracts  are  mere  nullities  and  the  title  to  such  stock  never 
passed  from  the  sellers.-^ 

If  data  upon  which  representations  claimed  to  have  induced 
the  purchase  of  stock  are  equally  accessible  to  the  purchaser 
as  to  the  seller  and  are  believed  by  the  latter  although  not  based 
upon  his  own  knowledge  but  upon  statements  made  by  others 
the  purchaser  is  not  entitled  to  a  rescission  of  the  contract  upon 
the  ground  of  fraud  even  though  such  representations  concern 
a  contemplated  consolidation  of  corporations  and  tend  to  en- 
hance the  value  of  the  stock  as  an  investment.'*  A  right  to 
rescind  a  purchase  of  stock  fraudulently  induced  by  false  repre- 
sentations may  be  waived  by  acts  of  the  purchaser  in  continu- 
ing, after  knowledge  of  the  fraud,  to  serve  as  a  director  and 
claiming  a  salary  as  superintendent,  under  the  contract  of  sale.''' 

§  437.  Specific  Performance. 

The  specific  performance  of  a  conditional  contract  will  not 
be  decreed,  unless  the  condition  has  been  performed.*  And  a 
plaintiff  will  not  be  required  to  perform  his  contract  if  it  is  not 
a  condition  precedent  before  he  can  call  on  the  defendant  to 

4  Section  22,  Art.  4,  Const.  1870  of  III. 

6  Dunbar  v.  American  Teleph.  &  Teleg.  Co.,  238  III.  456,  486,  487,  87  N. 
E.  521. 

6  Stevenson  v.  Marble  (U.  S.  C.  C),  84  Fed.  23. 

7  Lear  v.  S.  K.  Paige  Lumber  &  M.  Co.  (Tenn.  Ch.  App.),  42  S.  W. 
808. 

8  Deitz  V.  Stephenson,  51  Ore.  596,  95  Pac.  803. 

701 


§  437  EQUITABLE    REMEDIES 

perfonn  his,  which  alone  can  secure  the  plaintiff  in  the  rights 
he  acquired  under  the  contract.''  Nor  will  an  illegal  contract 
for  the  division  of  profits  based  upon  obtaining  a  franchise  for  a 
certain  company  by  preventing  competition  with  a  rival  com- 
pany be  specifically  enforced.^"  Nor  will  specific  performance 
be  decreed  whereby  a  street  railway  would  be  obligated  to  work 
its  road  for  all  future  time,  as  where  it  has  agreed  to  run  cars 
over  the  entire  line  during  the  whole  of  each  year;  ^^  nor  wall 
specific  performance  be  decreed  of  a  contract  made  with  a  rail- 
road company  for  through  transportation  of  freight  at  temiinal 
rates  where  it  is  too  indefinite  and  uncertain  as  to  said  service 
and  the  parties,  even  though  based  upon  the  consideration  of  a 
free  right  of  way  through  a  city.^^ 

If  a  village  corporation  has  made  a  contract  for  the  purchase 
of  the  plant  of  a  water  company,  and  such  contract  was  ultra 
vires  at  the  time  it  was  made,  and  afterwards  by  a  legislative  act 
said  corporation  has  been  authorized  to  "vote  to  purchase  the 
entire  works  and  rights"  of  the  water  company  "for  such  sums 
of  money  as  may  be  adjudged  payable  according  to  the  terms" 
of  the  contract,  such  authority  may  have  a  retrospective  action 
and  make  valid  the  contract,  but  when  the  corporation  at- 
tempts to  avail  itself  of  the  granted  power,  it  must  proceed  ac- 
cording to  the  terms  of  the  act,  and  first  "vote  to  purchase," 
etc.,  "for  such  sums  of  money  as  may  be  adjudged  paj^able," 
etc.,  before  it  can  maintain  a  bill  in  equity  for  the  specific  per- 
formance of  the  contract.^^  A  contract  to  convey  land  for  a 
railroad  right  of  way  is  not  too  uncertain  and  indefinite  to  be 
specifically  performed  where  complainant  has  taken  possession 
with  the  express  assent  of  defendants  and  constructed  its 
road  thereon  and  the  consideration  to  be  paid  can  be  ascer- 
tained by  a  computation  of  the  acreage  used  and  the  amount 

9  Tidewater  Ry.  Co.  v.  Hurt,  109  Va.  204,  63  S.  E.  421. 

10  Hyer  v.  Richmond  Traction  Co.  (U.  S.  C.  C.  A.),  80  Fed.  8.39,  42  U.  S. 
App.  522. 

11  Kingston  v.  Kingston,  P.  &  C.  E.  R.  Co.,  28  Ont.  Rep.  .399. 

12  Clark  V.  Great  Northern  R.  Co.  (U.  S.  C.  C),  81  Fed.  282. 

13  PhilHps  Village  Corporation  v.  Phillips  Water  Co.,  104  Me.  103,  71  Atl. 
474. 

702 


EQUITABLE    REMEDIES  §  437 

per  acre  paid  therefor  by  defendant,  including  interest  and 
taxes.^'* 

If  a  written  contract  of  sale  contains  within  itself  a  descrip- 
tion of  the  thing  sold,  by  which  it  can  be  known  or  identified, 
of  the  price  to  be  paid  for  it,  of  the  party  who  sells  it  and  the 
party  who  buys,  it  contains  all  the  requisites  of  a  valid  written 
contract  of  sale.  And  a  contract  between  a  railroad  company 
and  a  landowner  for  the  purchase  of  a  right  of  way,  and  which, 
by  way  of  preamble  and  inducement,  recites  the  purpose  of 
the  railroad  company  to  build  a  road  between  two  designated 
points,  or  sections,  is  not  a  contract  or  covenant  on  the  part  of 
the  railroad  company  to  build  a  railroad,  but  if  the  land  is 
sufficiently  designated  and  the  price  fixed,  is  a  valid  and  en- 
forceable contract  for  the  sale  of  the  land  described.  And  when 
a  statute  requires  an  effort  to  make  such  a  contract  before 
the  company  can  condemn,  it  would  be  a  useless  ceremony  if 
the  contract,  when  made,  could  not  be  enforced. ^^  Again, 
unless  equity  can  decree  specific  performance  of  the  whole 
contract,  it  will  not  interfere  to  enforce  any  part  of  it,  and 
specific  performance  will  not  be  enforced  unless  the  remedy 
is  mutual. ^^ 

A  court  of  equity  will  decree  the  specific  performance  of  a 
written  contract  for  the  sale  of  real  estate  at  the  instance  of  a 
purchaser  who  has  partly  performed  the  contract  under  circum- 
stances which  affect  the  conscience  of  the  vendor,  and  where  a 
failure  on  his  part  to  carry  out  the  contract  would  operate  as 
a  fraud  on  the  purchaser's  rights.^^ 

If  a  village  corporation  has  made  a  contract  which  is  ultra 
vires,  a  bill  in  ccjuity  brought  by  itself  for  the  specific  perform- 
ance of  the  same  cannot  be  maintained.  And  when  a  village 
corporation  is  only  invested  with  power  "to  raise  such  sums 
of  money  as  may  be  sufficient  for  the  support  of  a  reasonable 

!■*  Chicago,  Kalamazoo  &  Saginaw  Ry.  Co.  v.  Lane,  150  Mich.  162,  113 
N.  W.  22,  14  Det.  L.  N.  532. 

15  Tidewater  Ry.  Co.  v.  Hurt,  109  Va.  204,  63  S.  E.  421. 

16  Deitz  V.  Stephenson,  51  Ore.  596,  95  Pac.  803. 

17  Tidewater  Ry.  Co.  v.  Hurt,  109  Va.  204,  63  S.  E.  421. 

703 


I  438  EQUITABLE    REMEDIES 

number  of  hydrants,  in  case  water  is  brought  into  its  Hniits 
in  a  suitable  manner  and  sufficient  quantity,  and  suitable  fire 
engines,  engine  houses,  hose,  buckets,  hooks  and  ladders,  and 
provide  a  sufficient  quantity  of  water  in  the  different  parts  of 
said  corporation  for  the  extinguishment  of  fire  and  for  organiz- 
ing and  maintaining  within  its  limits  an  efficient  fire  depart- 
ment," and  has  no  power  to  raise  money  for  any  other  purpose, 
such  corporation  has  no  authority  to  enter  into  a  contract  with 
a  water  company  providing  that  at  expiration  of  a  term  of 
years  the  corporation  should  have  the  right  to  purchase  the 
water  company's  entire  plant,  at  an  appraised  value  to  be  fixed 
by  three  appraisers,  chosen,  one  by  the  corporation,  one  by  the 
water  company,  the  third  by  these  two,  and  on  payment  of 
the  price  so  determined,  that  the  water  company  should  trans- 
fer to  the  corporation  its  entire  plant,  and  if  such  corporation 
does  enter  into  such  a  contract  it  is  ultra  vires}^  A  bill  in  equity 
to  compel  specific  performance  of  a  contract  between  an  in- 
dividual and  a  State  cannot,  against  the  objection  of  the  State, 
be  maintained  in  the  Federal  Courts.^^ 

§  438.  Specific  Performance— Discretion  of  Court. 

All  apphcations  for  specific  performance  are  addressed  to  the 
sound  discretion  of  the  court,  regulated  by  estabhshed  principles. 
The  contract  must  not  only  be  distinctly  proved,  but  must  be 
clearly  and  distinctly  ascertained.  It  must  be  reasonable,  cer- 
tain, legal  and  mutual,  and  upon  a  valuable  or  least  meritorious 
consideration,  and  the  party  seeking  performance  must  not 
have  been  backward,  but  ready,  desirous,  prompt  and  eager. ^^ 
But  specific  performance  though  a  matter  of  grace  rather  than 
of  right,  will  not  be  denied  where  complainant,  a  railroad  com- 
pany, would  be  compelled  either  to  abandon  its  road  or  take 
proceedings  for  condemnation,  with  its  consequent  risks,  and 

18  Phillips  Village  Corporation  v.  Phillips  Water  Co.,  104  Me.  103,  71  Atl. 
474. 

19  Murray  v.  Wilson  Distilling  Co.,  213  U.  S.  151,  29  Sup.  Ct.  458,  53  L. 
ed.  458. 

20  Colonna  Dry  Dock  Co.  v.  Colonna,  108  Va.  230,  61  S.  E.  770. 

704 


EQUITABLE    REMEDIES  §  439 

specific  performance  will  give  each  party  what  was  contrucled 
for  without  injustice  to  cither.^^ 

The  recital,  in  a  contract  between  a  railroad  company  and  a 
landowner  for  the  purchase  of  a  right  of  way,  that  the  conijjany 
proposes  to  build  a  railroad  "from  the  West  Virginia  line,  at  or 
near  New  River  through  Southern  Virginia  to  tide  water," 
constitutes  only  an  inducement  to  the  contract,  the  truth  or 
falsity  of  which  would  exert  proper  influence  with  the  court  in 
exercising  its  discretion  in  granting  or  refusing  specific  per- 
formance, but  does  not  impair  the  force  or  effect  of  the  contract 
where  the  recital  is  made  in  good  faith  and  is  true.^^ 

§  439.  Specific  Performance— Contract  to  Sell  Corporate 
Stock. 

Equity  may  compel  specific  performance  of  a  contract  to 
sell  corporate  stock,  where  the  value  of  the  stock  is  not  easily 
ascertainable,  or  where  the  stock  is  not  readily  obtainable  else- 
where, or  where  there  is  some  reasonable  cause  for  the  buyer 
requiring  a  delivery  of  the  stock  contracted  for;  but  where  the 
stock  contracted  for  is  easily  obtained  in  the  market,  and  there 
are  no  particular  reasons  why  the  buyer  should  have  the  par- 
ticular stock,  he  is  left  to  his  action  for  damages.  And  before 
specific  performance  of  an  agreement  to  take  or  deliver  corpo- 
rate stock  may  be  decreed,  it  is  necessary  that  the  agreement 
should  not  involve  any  breach  of  trust,  nor  include  the  |)er- 
formance  by  either  party  of  obligations  the  performance  of 
which  equity  cannot  practically  enforce.  And  while  a  contract 
for  the  sale  of  corporate  stock,  which  binds  the  buyer  to  furnish 
to  the  seller  the  personal  services  of  himself  and  wife,  involves 
a  correlative  duty  on  the  part  of  the  seller  to  employ  the  buyer 
and  his  wife,  so  that  there  is  a  mutuality  of  obligations;  still 
where  such  contract  obligates  the  buyer  of  the  stock  to  furnish 
to  the  seller  such  personal  services  and  the  seller  to  employ  said 
parties,  it  cannot  be  specifically  enforced  at  the  suit  of  the  buyer 

21  Chicago,  Kalamazoo  &  Saginaw  Ry.  Co.  v.  Lano,  150  Mich.  102,  113 
N.  W.  22,  14  Det.  L.  N.  532. 

22  Tidewater  Ry.  Co.  v.  Hurt,  109  Va.  204,  63  S.  E.  421. 

45  705 


§  439  EQUITABLE    REMEDIES 

to  compel  the  delivery  of  such  stock,  where  the  seller  cannot 
maintain  a  suit  to  compel  the  specific  performance  of  the  buyer's 
agreement  to  render  the  personal  services  of  himself  and 
wife.^^ 

An  oral  contract  between  two  persons  to  purchase  shares  of 
stock  of  a  corporation  does  not  lack  mutuality,  where  by  its 
terms  it  provides  that  the  purchase  is  to  be  made  by  either  of 
the  parties  as  opportunity  might  offer,  for  their  mutual  benefit, 
and  that  after  the  shares  were  purchased  they  were  to  be  equally 
divided  between  the  parties,  each  paying  one-half  of  the  pur- 
chase price.  In  such  a  case  either  party  has  the  right  in  the 
exercise  of  good  faith  to  pay  what  he  deems  j^roper  for  the 
stock,  and  the  other  party  must  pay  one-half  of  the  money  ex- 
pended. If  it  appears  that  the  stock  is  not  procurable  in  the 
market,  and  that  its  pecuniary  value  is  not  readily  ascertain- 
able, the  contract  may  be  specifically  enforced.  The  person 
purchasing  the  stock  and  refusing  to  share  it  with  the  other 
party,  is  a  trustee  ex  ynaleficio  of  the  other  party,  and  equity 
will  enforce  the  trust.^^  Where  one  corporation  agrees  with  an- 
other to  issue  to  each  of  its  stockholders  new  stock,  share  for 
share,  upon  surrender  of  the  old  stock,  in  consideration  of  the 
transfer  by  the  latter  to  the  former  of  all  its  assets  and  business, 
an  action  lies  for  specific  perfomiance  of  such  contract,  and  a 
stockholder  of  the  old  company  may  properly  institute  such 
suit  for  his  own  benefit  without  joining  the  company  or  the 
other  stockholders,  and  an  averment  that  it  is  for  the  benefit  of 
such  of  them  as  may  come  in  and  defend  is  not  necessary.^ 
Where  the  original  subscribers  to  the  stock  of  a  corporation 
agree  that  in  case  any  of  them  might  desire  to  sell  their  stock, 
they  shall  first  offer  it  to  the  remaining  subscribers,  and  it  ap- 
pears that  of  the  remaining  three  original  subscribers  two  had 
sold  their  stock  to  other  parties  in  violation  of  the  agreement, 
such  an  agreement  cannot  be  set  up  against  the  other  one  of  the 
three  original  subscribers  when  he  attempts  to  compel  a  third 

23  Deitz  V.  Stephenson,  51  Ore.  596,  95  Pac.  803. 

24  Sherman  v.  Herr,  220  Pa.  St.  420,  69  .\tl.  S99. 

25  Fletcher  v.  Newark  Teleph.  Co.,  55  N.  J.  Eq.  47,  35  Atl.  903. 

706 


EQUITABLE    REMEDIES  §  439 

party  to  deliver  to  him  stock  which  such  third  party  had  con- 
tracted to  dehver.^*^ 

In  another  case  a  contract  for  the^  purchase  of  stock  in  a 
corporation  owning  a  hotel  stipulated  that  the  buyer  should 
be  employed  as  the  manager  of  the  hotel  at  a  fixed  salary,  and 
that  in  case  the  hotel  made  a  profit  he  should  be  entitled  to 
have  one-fourth  thereof  credited  on  the  balance  due  on  the 
stock  contracted  for.  He  was  removed  from  his  position  as 
manager,  and  brought  a  suit  to  specifically  enforce  the  contract 
by  rec|uiring  his  restoration  to  the  position  of  manager  and  for 
the  transfer  and  delivery  to  him  of  the  corporate  stock.  There 
was  no  allegation  that  any  profits  had  accrued  or  were  due,  nor 
was  there  any  claim  made  for  damages,  and  he  made  no  tender 
of  performance  by  alleging  his  willingness  and  ability  to  pay  any 
balance  that  might  be  found  due  after  applying  profits  to  the 
liquidation  of  the  debt.  It  was  held  that  the  court  was  without 
authority  to  enter  a  decree  providing  for  the  appointment  of 
a  referee  to  take  an  accounting  of  damages  and  of  the  earnings 
and  profits  of  the  hotel,  and  for  the  application  of  the  same  on 
the  stock  purchased,  and  the  payment  of  the  balance,  if  any, 
to  the  buyer.  Said  contract  also  recited  that  plaintiff  had 
agreed  to  purchase  from  defendant  a  fourth  interest  in  hotel 
property  for  a  specified  sum,  and  bound  defendant  to  procure 
for  plaintiff  the  position  of  manager  of  the  hotel  at  a  specified 
compensation,  provided  defendant  obtained  control  of  all  the 
stock  of  the  corporation  owning  the  hotel,  and,  should  he  fail 
to  get  control,  a  new  corporation  should  be  formed,  of  which 
plaintiff  should  have  a  fourth  of  the  stock  and  defendant  three- 
fourths.  It  was  held  that  the  contract  did  not  create  a  partner- 
ship in  the  hotel  business  and  created  only  a  personal  obligation 
on  the  part  of  defendant  to  sell  a  fourth  interest,  and  plaintiff, 
on  being  removed  from  the  position  of  manager,  could  not, 
in  a  suit  for  the  specific  performance  of  the  contract,  compel  his 
restoration  to  such  position.  Said  contract  also  gave  the  buyer 
an  option  to  purchase,  within  a  specified  time,  corporate  stock 
for  a  fixed  price  on  payment  of  a  part  of  the  price  in  cash  and  on 

•      26  Sherman  v.  Herr,  220  Pa.  St.  420,  6'J  Atl.  899. 

707 


§  439  EQUITABLE    REMEDIES 

the  payment  of  the  balance  within  a  specified  time;  the  seller 
to  retain  the  stock  as  security  for  the  payment  of  the  balance. 
The  buyer  made  a  written  offer  to  pay  the  cash  part  of  the  price 
for  the  stock.  He  did  not  show  that  he  was  able  at  that  time,  or 
at  any  time  since,  to  pay  such  part  of  the  price,  and  he  did  not 
pay  such  part  into  court.  It  was  held,  that  he  was  not  entitled 
to  compel  specific  performance  of  the  contract  by  compelling 
the  seller  to  deliver  to  him  the  stock,  at  least  in  the  absence  of  a 
tender  or  a  readiness  or  willingness  to  pay  the  balance  of  the 


price. '^ 


27  Deitz  V.  Stephenson,  51  Ore.  596,  95  Pac.  803. 


708 


CRIMINAL    LIABILITY    OF    CORPORATIONS 


440 


CHAPTER  XXV 

PENALTIES — OFFENSES — CRIMINAL  LIABILITY  OF  CORPORATIOXS 


440.  Penalties — Suit  by  Consignee 

to  Recover. 

441.  Right    to    Inspect    Books    of 

Corporation — Penalties  for 
Refusal  to  Allow. 

442.  Telegraph  and  Telephone 

Companies — Discr  i  m  i  n  a- 
tion — Penalties. 

443.  Offenses    Against    United 

States. 

444.  Power  of  Congress — To  What 

Extent  Corporation  Can  Be 
Charged  Criminally  for 
Agents'  Acts — C  o  m  m  o  n 
Carriers — Rates . 

445.  Police     Power     of     States — 

Crimes  and  Penalties — 
Combinations  in  Restraint 
of  Trade — Extent  of  Ju- 
dicial Interference  by  Fed- 
eral Courts. 

446.  Corporation    Criminally    Lia- 

ble— May  Be  Indicted. 

447.  Indictment    of    Corporations 

for  Nuisances. 

448.  Insurance    Companies — Com- 

binations —  Conspiracies — 
Insurance  as  "Commod- 
ity " —  When  and  When 
Not  Indictable  Offenses. 

449.  Criminal   OlTenses  by  Coipo- 

rations  —  Employment  of 
Children  Under  Certain  Age 
— Penalties. 

450.  Indictment — While  a  Corpo- 

ration Might  Be  Liable  for 
Misfeasance  Under  Cer- 
tain   Definitions    of    Man- 


§  451 


slaughter  It  Cannot  Bi! 
Guilty  of  Latter  Under 
New  York  Penal  Code. 

Construction  of  Antitrust 
Act — What  Prohibitions  of 
Embrace  —  Intent  of  — 
What  Are  and  Are  Not  Il- 
legal Combinations  Within. 
452.  Construction  of  EHcins  Act — 
Criminal  Intent  —  Accept- 
ing Rebates — When  Car- 
rier Liable  as  Party  to 
Joint  Rate. 

Construction  of  Elkins  Act — 
"Device"  to  Obtain  Re- 
bates. 

Penal  Statute  —  Retroactive 
Effect — Liability  Under,  of 
Party  Carrying  Out  Ille- 
gal Agreement  Executed 
Prior  to  Its  Passage. 

State  Jurisdiction  Over  Vio- 
lation of  Antitrust  Law 
Where  Agreement  Made 
Out  of  State — Extraterri- 
torial Effect  of  Conspiracy, 
etc.,  Statute. 

Constitutional  Law — Elkins 
Act — Liquor  Laws — Reg- 
ulation of  Carriers — Exces- 
sive Fines. 

Sufficiency  of  Indictment. 

Discrimination  in  Rates — 
Rebates  —  Ellkins  Act  — 
Criminal  Law — Place  of 
Trial  —  Single  Continuous 
Offense. 


453. 


454. 


455. 


456. 


457 

458 


§  440.  Penalties — Suit  by  Consignee  to  Recover. 
Where  a  State  statute  retiiiired  a  carrier  to  settle,  within  a 

709 


§  441  PENALTIES — OFFENSES — 

specified  time,  claims  for  loss  of  or  damage  to  freight  while  in  its 
possession  within  that  State,  and  a  failure  to  adjust  and  pay 
such  claim  within  the  prescribed  period  subjects  each  carrier 
so  failing  to  a  specified  penalty  for  each  and  every  failure,  to  be 
recovered  by  any  consignee  or  consignees  aggrieved  in  any  court 
of  competent  jurisdiction,  and  also  provided  that  unless  such 
consignee  or  consignees  recovered  in  such  action  the  full  amount 
claimed,  no  penalty  should  be  recovered,  but  only  the  actual 
amount  of  the  loss  or  damage,^  it  was  held  in  certain  cases 
brought  to  test  the  validity  of  such  enactment  when  applied  to 
claims  for  loss  or  damage  to  interstate  freight,  that  such  statute 
was  not,  in  the  absence  of  legislation  by  Congress  on  the  sub- 
ject, an  unwarrantable  interference  with  interstate  commerce, 
and  was  not  unconstitutional  under  the  commerce  law  as  to 
goods  shipped  from  without  the  State  but  which  actually  were 
in  the  possession  of  the  carrier  within  the  State.  It  was  also 
held  that  a  State  statute  in  aid  of  the  performance  of  the  duty 
of  an  interstate  carrier  which  would  exist  in  the  absence  of  the 
statute,  which  does  not  obstruct  the  carrier,  and  which  relates 
to  the  delivery  of  goods  actually  in  the  possession  of  the  carrier 
within  the  State,  is  not  void  as  a  regulation  or  obstruction  to 
interstate  commerce,  in  the  absence  of  congressional  legislation 
on  the  subject.^ 

§  441.  Right  to  Inspect  Books  of  Corporation— Penalties 
for  Refusal  to  Allow.^ 

A  stockholder  of  a  corporation  has  the  right  to  inspect  the 
books  of  the  company,  at  a  proper  time  and  in  a  proper  way, 
even  though  his  only  object  be  to  ascertain  whether  the  business 
has  been  properly  conducted;  and  the  fact  that  he  is  interested 
in  a  competing  company  is  not  a  good  and  sufficient  reason  for 
refusing  him.^    So  an  executor  and  sole  legatee  holding  half  the 

1  Act  No.  50  of  S.  C.  of  February  23,  1903. 

2  Atlantic  Coast  Line  Ry.  Co.  v.  Mazursky,  216  U.  S.  122,  30  Sup.  Ct. , 

54  L.  ed.  ,  aff'g  78  S.  C.  36. 

3  See  §  362,  herein. 

4  Hodder  v.  George  Hogg  Co.,  223  Pa.  St.  196,  72  All.  553. 

710 


CRIMINAL   LIABILITY   OF  CORPORATIONS  §  442 

capital  stock  of  a  business  corporation  and  not  interested  in  any 
rival  business  and  not  advei'se  to  the  interests  of  the  corporation 
is  entitled  to  an  examination  of  its  books  and  may  enforce  that 
right  by  mandamus.^  Neither  a  corporation  nor  its  officers  or 
agents  can  be  held  liable  for  a  statutory  penalty  for  refusal  to 
allow  an  inspection  of  the  books  of  the  corporation  when  they 
do  not  refuse  so  to  do  within  the  intent  of  the  statute.^ 

§  442.  Telegraph  and  Telephone  Companies— Discrimi- 
nation— Penalties.^ 

By  acceptance  of  the  Post  Roads  Act,  the  accepting  telegraph 
companies  are  obligated  to  give  preference  to  government  busi- 

When  stockholder  has  right  to  inspect  corporation's  books,  see  the  following 
cases : 

United  States:  Chable  v.  Nicaragua  Canal  Const.  Co.,  59  Fed.  846. 

Alabama:  Foster  v.  White,  86  Ala.  467,  6  So.  88. 

Illinois:  Stone  v.  Kellogg,  165  111.  192,  46  N.  E.  222,  aff'g  62  111.  App.  444; 
Matthews  v.  McClaughry,  83  111.  App.  224. 

Maryland:  Weinhenmayer  v.  Bitner,  88  Md.  325,  42  Atl.  245,  45  L.  R.  A. 
446. 

Nebraska:  Gerner  v.  Mosher,  58  Neb.  135,  46  L.  R.  A.  244,  78  N.  W.  384. 

New  York:  Steinway,  In  re,  159  N.  Y.  250,  49  L.  R.  A.  461,  53  N.  E.  1103, 
aff'g  52  N.  Y.  Supp.  343,  31  App.  Div.  70;  People  v.  Knickerbocker  Trust 
Co.,  77  N.  Y.  Supp.  1000,  38  Misc.  446;  Coats,  In  re,  75  N.  Y.  Supp.  730,  73 
App.  Div.  178;  Recknagel  v.  Empire  Self-Lighting  Oil-Lamp  Co.,  52  N.  Y. 
Supp.  635,  24  Misc.  193. 

Washington:  State  v.  Pacific  Brewing  &  Malting  Co.,  21  Wash.  451,  47 
L.  R.  A.  208,  58  Pac.  584. 

When  stockholder  not  permitted  to  inspect  corporation's  books,  see  Clark  v. 
Eastern  Bldg.  &  Loan  Assoc.  (U.  S.  C.  C),  89  Fed.  779. 

Who  is  not  a  stockholder  so  as  to  be  entitled  to  inspect  corporation's  books, 
see  State  ex  rel.  Bulkley  v.  Whited  &  Wheless,  104  La.  125,  28  So.  922; 
Pray  v.  Todd,  75  N.  Y.  Supp.  947,  71  App.  Div.  391;  First  Nat.  Bank, 
In  re,  60  N.  Y.  Supp.  1138,  44  App.  Div.  635,  aff'g  59  N.  Y.  Supp.  1042,  28 
Misc.  662. 

5  Hastings,  Matter  of,  112  N.  Y.  Supp.  800,  128  App.  Div.  516,  aff'd  (mom.) 
194  N.  Y.  546,  87  N.  E.  1120. 

Constitutional  right  to  inspect  corporation's  books  includes  personal  repre- 
sentative of  stockholder  after  his  death.  State  ex  rel.  Burke  v.  Citizens' 
Bank,  51  La.  Ann.  426,  25  So.  318. 

6  Lozier  v.  Gas,  Electric  Light  &  Power  Co.,  69  N.  Y.  Supp.  247,  59  App. 
Div.  390.  See  Kirkman  v.  Carlstadt  Chemical  Co.,  74  N.  Y.  Supp.  865,  36 
Misc.  822. 

7  See  Joyce  on  Electric  Law  (2d  ed.),  §§  836-877a. 

711 


§  442  PENALTIES — OFFENSES — 

ness  of  the  United  States.*  If  there  is  dissimilarity  in  the  serv- 
ices rendered  by  a  telegraph  company  to  different  persons,  a 
difference  in  charges  is  proper,  and  no  recovery  can  be  had  un- 
less it  is  shown  not  merely  that  there  is  a  difference  in  the 
charges,  but  that  the  difference  is  so  great  as,  under  dissimilar 
conditions  of  service,  to  show  an  unjust  discrimination;  and  the 
recovery  must  be  limited  to  the  amount  of  the  unreasonable 
discrimination.^  But  a  telegraph  company  fails  to  afford  reason- 
able and  equal  facilities  to  all  where  it  turns  over  its  wire  ex- 
clusively to  a  railroad  company,  and  fails  to  provide  another 
wire  or  a  reasonably  adequate  number  of  wires  to  serve  the 
public.^"  An  excessive  charge  for  sending  a  telegram  consti- 
tutes a  discrimination  rendering  the  company  liable  for  the 
statutory  penalty."  As  a  rule  a  telephone  company  is  obligated 
to  furnish  its  instruments  and  facilities  to  all  persons  willing  to 

8  Telegraph  Co.  v.  Texas,  105  U.  S.  460,  26  L.  ed.  1067,  1  Am.  Elec.  Cas. 
373,  per  Mr.  Chief  Justice  Waite;  Western  Union  Teleg.  Co.  v.  Mayor  of  the 
City  of  New  York,  38  Fed.  552,  2  Am.  Elec.  Cas.  196,  per  Wallace,  J.;  City 
Council  of  Charleston  v.  Postal  Teleg.  Cable  Co.  (Ct.  C.  P.  Charleston,  S.  C. 
1891),  9  Ry.  &  Corp.  L.  J.  129,  3  Am.  Elec.  Cas.  56,  62-65,  per  Izlar,  J. 
"It  has  put  its  lines  at  the  service  of  the  United  States  for  postal,  military 
and  other  purposes,  and  given  preference  to  its  business."  Postal  Teleg. 
Cable  Co.  v.  Charleston,  153  U.  S.  692,  5  Am.  Elec.  Cas.  663,  664,  14  St. 
Ct.  1094,  per  Mr.  Justice  Shiras,  aff'g  56  Fed.  419,  4  Am.  Elec.  Cas.  620. 
"  By  this  action  the  company  so  accepting  puts  its  lines  at  the  service  of  the 
United  States  for  postal,  military  and  other  purposes  and  gives  precedence 
to  its  messages  over  all  other  business.  It  thus  becomes  an  agent  of  the 
government."  Western  Un.  Teleg.  Co.  v.  City  Council  of  Charleston,  56 
Fed.  419,  4  Am.  Elec.  Cas.  621.  See  mem.  decision,  163  U.  S.  711,  41  L.  ed. 
309,  16  Sup.  Ct.  1208.  The  Western  Union  Telegraph  Company  is,  by  vir- 
tue of  such  rights  as  it  derived  l)y  acceptance  of  the  Post  Roads  Act,  a  gov- 
ernmental agent.  "The  trial  court  was  right  in  holding  that  the  defendant 
is  a  governmental  agent,  but  this  only  extended  to  its  relations  between  the 
government  and  its  agent."  State  ex  rel.  Gottlieb  v.  Western  Union  Teleg. 
Co.,  165  Me.  .502,  65  S.  W.  775,  8  Am.  Elec.  Cas.  390,  396,  per  Marshall,  J.; 
a  case  as  to  taxation  of  franchise  case  affirmed ;  Western  Union  Teleg.  Co.  v. 
State  of  Missouri,  190  U.  S.  412,  47  L.  ed.  1116,  23  Sup.  Ct.  730. 

9  Western  Union  Teleg.  Co.  v.  Call  Publishing  Co.,  181  U.  S.  92,  45  L.  ed. 
765,  21  Sup.  Ct.  561. 

i«  Western  Union  Teleg.  Co.  v.  Rosentreter,  80  Tex.  406,  3  Am.  Elec.  Cas. 
782,  791,  16  S.  W.  25,  per  Marr,  J. 

11  Western  Union  Teleg.  Co.  v.  McClelland  (Ind.  App.,  1906),  78  N.  E.  672, 
under  Burns'  Annot.  Stat.,  1901,  §§  5511,  5512. 

712 


CRIMINAL  LIABILITY  OF  CORPORATIONS  §  442 

accede  to  its  terms,  and  to  obey  its  reasonable  rules  and  regu- 
lations.^^ So  the  refusal  of  a  telephone  company  to  connect 
the  instrument  of  a  subscriber  with  that  of  another  patron 
renders  it  liable  under  a  statute  as  to  discrimination  and  parti- 
ality, as  the  duty  imposed  does  not  cease  upon  furnishing  the 
instrument  and  connecting  it  with  the  exchange.^^  Under  a 
statute  which  provides  that  telephone  companies  shall  supply 
all  applicants  for  telephone  facilities  without  discrimination, 
and  imposes  a  penalty  for  each  day's  continuance  of  such 
discrimination,  a  complaint  which  alleges  that  defendant  tele- 
phone company  failed  to  furnish  defendant  with  a  telephone 
connection,  after  repeated  application  therefor,  and  "that  by 
reason  of  the  aforesaid  discrimination  and  refusal"  defendant 
had  incurred  a  penalty,  fails  to  state  a  cause  of  action  consti- 
tuting discrimination.^^  And  a  penalty  statute  prohibiting 
discrimination  by  telephone  companies  applies  to  discrimination 
between  applicants  as  well  as  patrons,  and  such  companies  can- 
not refuse  to  connect  two  subscribers.^^  If  the  action  is  against 
a  telephone  company  to  recover  a  statutory  penalty  for  failure 
to  furnish  telephone  facilities,  because  plaintiff  had  not  paid 
certain  tolls  and  charges,  an  averment  of  nonenforcement  of  the 

12  People,  Postal  Teleg.  Cable  v.  Hudson  R.  Teleph.  Co.,  19  Abb.  N.  C. 
(N.  Y.)  466,  10  N.  Y.  St.  R.  282,  2  Am.  Elec.  Cas.  394.  See  Chesapeake  & 
P.  Teleph.  Co.  v.  Baltimore  &  O.  Teleg.  Co.,  66  Md.  399,  59  Am.  St.  Rep. 
167,  7  Atl.  809;  State,  Webster  v.  Nebraska  Teleph.  Co.  (Webster  Telephone 
Case),  17  Neb.  126,  22  N.  W.  237,  52  Am.  St.  Rep.  404;  Commercial  Union 
Teleg.  Co.  v.  New  England  Teleph.  &  Teleg.  Co.,  61  Vt.  241;  Delaware  & 
A.  Teleg.  &  Teleph.  Co.  v.  State  Postal  Teleg.  Cable  Co.,  3  U.  S.  App.  30, 
2  U.  S.  C.  C.  A.  1,  50  Fed.  677.  Examine  American  Rap.  Teleg.  Co.v.  Con- 
necticut Teleph.  Co.,  49  Conn.  352,  44  Am.  St.  Rep.  237m,  and  see  note  5  L. 
R.  A.  161. 

"Central  Un.  Teleph.  Co.  v.  Fehring,  146  Ind.  189,  45  N.  E.  64;  Ind.  Rev. 
Stat,  of  1894,  §5529.  See  Horner'.s  Annot.  Stat.,  Ind.,  1901,  §§  4192a- 
4192c. 

14  Phillips  V.  Southwestern  Teleg.  &  Teleph.  Co.,  72  Ark.  478,  81  S.  W. 
605,  under  Laws,  1885,  chap.  107,  §  11. 

15  Central  Un.  Teleph.  Co.  v.  Fehring,  146  Ind.  189,  45  N.  E.  64,  6  Am. 
Elec.  Cas.  694;  §  5529,  Rev.  Stat,  of  Tnd.,  1894  (§  2,  p.  151,  Acts  of  1885); 
Rev.  Stat,  of  1881,  §  115;  Rev.  Stat,  of  1894,  §  115;  Acts  of  1885,  p.  151, 
§  2  (Rev.  Stat,  of  1894,  §  5529).  See  Horner's  Annot.  Stat.,  Ind.,  1901, 
§§  4192a-4192c. 

713 


§  443  PENALTIES — OFFENSES — 

rule  requiring  such  payment  against  a  certain  number  of  other 
patrons  "who  were  in  hke  situation  with  the  plaintiff"  is  a 
mere  conclusion  and  is  insufficient  to  show  discrimination,  it  not 
being  shown  that  delinquent  patrons  had  refused  to  pay.^* 

§  443.  Offenses  Against  United  States. 
There  are  no  common-law  offenses  against  the  United  States.^^ 
In  a  case  where  a  criminal  information  was  brought  by  the 
United  States,i«  against  a  bridge  company,  its  president  and 
managers,  a  verdict  of  guilty  was  found,  and  the  defendant 
was  adjudged  to  pay  to  the  United  States  a  fine  of  one  thousand 
dollars  and  the  cost  of  prosecution.  From  that  judgment  the 
case  was  taken  directly  to  the  Federal  Supreme  Court,  where 
the  judgment  was  affirmed.  The  information  charged  the 
bridge  company  with  having  willfully  failed,  refused  and  neg- 
lected to  comply  with  an  oixler  of  the  Secretary  of  War  re- 
quiring certain  alterations  in  the  bridge  by  reason  of  its  being  an 
unreasonable  obstruction  to  the  free  navigation  of  one  of  the 
navigable  waterways  of  the  United  States.  Certain  constitu- 
tional questions  were  raised  and  it  was  held  that:  (1)  Congress 
may,  in  order  to  enforce  its  enactments,  clothe  an  executive 
officer  with  power  to  ascertain  whether  certain  specified  con- 
ditions exist  and  thereupon  to  act  in  a  prescribed  manner,  with- 
out delegating,  in  a  constitutional  sense,  legislative  or  judicial 
power  to  such  officer;  (2)  under  its  paramount  power  to  regulate 
commerce.  Congress  can  require  navigable  waters  within  a  State 
to  be  freed  from  unreasonable  obstructions,  and  it  is  not  a  dele- 
gation of  legislative  or  judicial  power  to  charge  the  Secretary  of 
War  with  the  duty  of  ascertaining,  under  a  general  rule  applica- 
ble to  all  navigable  waters  and  upon  notice  to  the  parties  in 
interest,  whether  obstructions  are  unreasonable ;  (3)  an  act  of 
Congress  which  invests  the  Secretary  of  War  with  power  to  re- 
quire the  removal  of  obstructions  to  navigation  after  notice  to 
parties  in  interest  and  opportunity  to  be  heard  and  reasonable 

w  Irvin  v.  Rushville  Co-operative  Teleph.  Co.,  161  Ind.  524,  69  N.  E.  258. 

17  United  States  v.  Eaton,  144  U.  S.  677,  36  L.  ed.  591,  12  Sup.  Ct.  764. 

18  Under  §  18  of  the  River  &  Harbor  Act  of  March  3,  1899. 

714 


CRIMINAL   LIABILITY    OF   CORPORATIONS  §  443 

time  to  make  alterations  in  the  obstruction,'"  does  not  invest  the 
Secretary  with  arbitrary  power  beyond  constitutional  limita- 
tions; (4)  to  require,  after  notice  and  hearing,  alterations  to  be 
made  within  a  reasonable  time  and  in  a  bndge  over  navigable 
waters  so  as  to  prevent  its  being  an  obstruction  to  navigation, 
is  not  taking  of  private  j)roperty  for  public  use  which,  under  the 
Constitution,  must  be  preceded  by  compensation  to  the  owners 
of  the  bridge;  (5)  the  erection  of  a  bridge  over  navigable  waters 
within  a  State  by  authority  of  the  State  is  subject  to  the  [para- 
mount authority  of  Congress  to  regulate  commerce  among  the 
States  and  its  right  to  remove  unreasonable  obstructions  to  navi- 
gation; (G)  the  mere  silence  of  Congress,  and  its  failure  to  inter- 
fere to  prevent  the  construction  under  State  authority  of  an 
obstruction  to  navigation  does  not  prevent  it  from  subsequently 
reciuiring  the  removal  of  the  obstruction  or  impose  upon  the 
United  States  a  constitutional  obligation  to  make  compensation 
therefor;  (7)  it  is  for  Congress,  under  the  (bnstitution,  to  regu- 
late the  right  of  navigation  and  to  declare  what  must  be  done  to 
clear  navigation  from  obstructions;  and  where  this  has  been 
done  in  the  manner  required  by  Congress  it  is  not  the  province 
of  the  jury,  on  the  trial  of  one  refusing  to  remove  obstructions,  to 
determine  whether  the  removal  was  necessary;  (8)  an  act  will 
not  be  declared  unconstitutional  merely  because  an  executive 
officer  might,  in  another  case,  act  arbitrarily  or  recklessly  under 
it.    If  such  a  case  arises  the  courts  can  protect  the  rights  of  the 
government  or  persons  which  are  based  on  fundamental  princi- 
)  )les  for  the  protection  of  rights  of  property.""    Where  a  Federal 
law  is  applicable  requiring  consent  of    the  Federal  Govern- 
ment there   is   concurrent  or  joint  jurisdiction   of  the  State 
and   National    governments   over  the   erection  of   structures 
obstructing  navigation  of  a  navigable  stream  wholly  within 
a  State  .^' 

19  Section  IS  of  the  River  &  Harbor  Act  of  March  3,  1899,  30  Stat.  1151. 

^0  Monongahela  Bridge  Co.  v.  United  States,  21G  U.  S.  177,  30  Sup. 
Ct. ,  54  L.  ed. .     Mr.  Justice  Brewer  dissented.    See  §  56,  herein. 

21  North  Shore  Boom  Co.  v.  Nicomen  Boom  Co.,  212  U.  S.  40G  (Cummings 
V.  Chicago,  188  U.  S.  410;  Montgomery  v.  Portland,  190  U.  S.  89);  writ  of 
error,  40  Wash.  315,  dismissed. 

715 


§  444  PENALTIES — OFFENSES — 

§  444.  Power  of  Congress— To  What  Extent  Corporation 
Can  Be  Charged  Criminally  for  Agents'  Acts— Common 
Carriers — Rates. 

Congress  can  impute  to  a  corporation  the  commission  of 
certain  criminal  offenses  and  subject  it  to  criminal  prosecution 
therefor.  While  corporations  cannot  commit  some  crimes,  they 
can  commit  crimes  which  consist  in  purposely  doing  things  pro- 
hibited by  statute,  and  in  such  case  they  can  be  charged  with 
knowledge  of  acts  of  their  agents  who  act  within  the  authority 
conferr.ed  upon  them.'-    So  under  the  laws  of  a  State  a  corpora- 

22  New  York  Cent.  &  Hudson  River  Ry.  Co.  v.  United  States,  212  U.  S. 
481,  29  Sup.  Ct.  304,  53  L.  ed.  613  (a  case  of  indictment  and  conviction  in 
Circuit  Court  of  railroad  company  and  its  assistant  traffic  manager  for  pay- 
ment of  rebates;  imposition  of  fines  and  writ  of  error).  The  court,  per  Mr. 
Justice  Day,  said:  "It  is  contended  that  these  provisions  of  the  law  are  un- 
constitutional because  Congress  has  no  authority  to  impute  to  a  corporation 
the  commission  of  criminal  offenses,  or  to  subject  a  corporation  to  a  criminal 
prosecution  by  reason  of  the  things  charged.  The  argument  is  that  to  thus 
punish  the  corporation  is  in  reality  to  punish  the  innocent  stockholders,  and 
to  deprive  them  of  their  property  without  opportunity  to  be  heard,  conse- 
quently without  due  process  of  law.  And  it  is  further  contended  that  these 
provisions  of  the  statute  deprive  the  corporation  of  the  presumption  of  inno- 
cence,— a  presumption  which  is  part  of  due  process  in  criminal  prosecutions. 
It  is  urged  that,  as  there  is  no  authority  shown  by  the  board  of  directors  or 
the  stockholders  for  the  criminal  acts  of  the  agents  of  the  company  in  con- 
tracting for  and  giving  rebates,  they  could  not  be  lawfully  charged  against 
the  corporation.  As  no  action  of  the  board  of  directors  could  legally  au- 
thorize a  crime,  and  as,  indeed,  the  stockholders  could  not  do  so,  the  ar- 
guments come  to  this:  that,  owing  to  the  nature  and  character  of  its  organ- 
ization and  the  extent  of  its  power  and  authority,  a  corporation  cannot 
commit  a  crime  of  the  nature  charged  in  this  case.  Some  of  the  earlier 
writers  on  common  law  held  the  law  to  be  that  a  corporation  could  not  com- 
mit a  crime.  It  is  said  to  have  been  held  by  Lord  Chief  Justice  Holt  (Anony- 
mous, 12  Mod.  559)  that  'a  corporation  is  not  indictable,  although  the  par- 
ticular members  of  it  are.'  In  Blackstone's  Commentaries,  chap.  18,  §  12,  we 
find  it  stated:  'A  corporation  cannot  commit  treason,  or  felony,  or  other' 
crime  in  its  corporate  capacity,  though  its  members  may,  in  their  distinct 
individual  capacities.'  The  modern  authority,  universally,  so  far  as  we 
know,  is  the  other  way.  In  considering  the  subject,  Bishop's  New  Criminal 
Law,  §  417,  devotes  a  chapter  to  the  capacity  of  corporations  to  commit 
crime,  and  states  the  law  to  be:  'Since  a  corporation  acts  by  its  officers  and 
agents,  their  pui-poses,  motives,  and  intent  are  just  as  much  those  of  the 
corporation  as  are  the  things  done.  If,  for  example,  the  invisible,  intangi- 
ble essence  or  air  which  we  term  a  corporation  can  level  mountains,  fill  up 
valleys,  lay  down  iron  tracks,  and  run  railroad  cars  on  them,  it  can  intend 

716 


CRIMINAL    LIABILITY    OF   CORPORATIONS  §  444 

tion  may  in  many  instances  be  charged  criminally  with  the  un- 
lawful purposes  and  motives  of  agents  through  whom  it  con- 
ducts its  business,  while  they  are  acting  in  its  behalf,  so  long  as 
they  act  within  the  scope  of  their  authority,  real  or  apparent.^^ 

to  do  it,  and  can  act  therein  as  well  viciously  as  virtuously.'  Without  cit- 
ing the  State  cases  holding  the  same  view,  we  may  note  Telegram  Newspaper 
Co.  v.  Commonwealth,  172  Mass.  294,  44  L.  R.  A.  I.VJ,  70  Am.  St.  Rep.  2S0, 
52  N.  E.  445,  in  which  it  was  held  that  a  corporation  was  subject  to  punish- 
ment for  criminal  contempt;  and  the  court,  speaking  by  Mr.  Chief  Justice 
Field,  said:  'We  think  that  a  corporation  may  be  liable  criminally  for  cer- 
tain offenses  of  which  a  specific  intent  may  be  a  necessary  element.  There  is 
no  more  difficulty  in  imputing  to  a  corporation  a  specific  intent  in  criminal 
proceedings  than  in  civil.  A  corporation  can  be  arrested  and  imprisoned  in 
either  civil  or  criminal  proceedings,  but  its  property  may  be  taken  either  as 
compensation  for  a  private  wrong  or  as  punishment  for  a  public  wrong."  It 
is  held  in  England  that  corporations  may  be  criminally  prosecuted  for  acts 
of  misfeasance  as  well  as  nonfeasance.  R.  v.  Great  North  of  England  R. 
Co.,  9  L.  B.  315.  *  *  *  It  is  true  that  there  are  some  crimes  which,  in 
their  nature,  cannot  be  committed  by  corporations.  But  there  is  a  large 
class  of  offenses,  of  which  rebating  under  the  Federal  statutes  is  one,  wherein 
the  crime  consists  in  purposely  doing  the  things  prohibited  by  statute.  In 
that  class  of  crimes  we  see  no  good  reason  why  corporations  may  not  be  held 
responsible  for  and  charged  with  the  knowledge  and  purposes  of  their  agents, 
acting  within  the  authority  conferred  upon  them.  2  Morawitz,  Priv.  Corp., 
§  733;  Green's  Brice,  Ultra  Vires,  366.  If  it  were  not  so,  many  offenses 
might  go  unpunished  and  acts  be  committed  in  violation  of  law  where,  as  in 
the  present  case,  the  statute  requires  all  persons,  corporate  or  private,  to 
refrain  from  certain  practices,  forbidden  in  the  interest  of  public  policy." 

That  corporation  must  suffer  for  agents'  acts,  see  State  ex  inf.  Firemen's 
Fund  Ins.  Co.,  152  Mo.  1,  45  L.  R.  A.  363,  52  S.  W.  595.  See  §  317,  herein 
23  People  V.  Rochester  Ry.  &  Light  Co.,  195  N.  Y.  102,  88  N.  E.  22,  aff'g 
114  N.  Y.  Supp.  755,  129  App.  Div.  843,  which  aff'd  112  N.  Y.  Supp.  362, 
59  Misc.  347  (a  case  of  indictment  for  crime  of  manslaughter  in  the  second 
degree,  held  that  corporation  cannot  be  guilty  of  manslaughter).  The  court, 
per  Iliscock,  J.,  said:  "The  respondent  has  been  indicted  for  the  crime  of 
manslaughter  in  the  second  degree,  because,  as  alleged,  it  installed  certain 
apparatus  in  a  residence  in  Rochester  in  such  a  grossly  improper,  unskillful, 
and  negligent  manner  that  gases  escaped  and  caused  the  death  of  an  inmate. 
The  demurrer  to  the  indictment  has  presented  the  question  whether  a  cor- 
poration may  be  thus  indicted  for  manslaughter  under  §  193  of  the  Penal 
Code.  Befoi'c  proceeding  to  the  interpretation  of  this  specific  provision,  we 
shall  consider  very  briefly  the  general  question  discussed  by  the  parties, 
whether  a  corporation  is  capable  of  committing  in  any  form  such  a  crime  as 
that  of  manslaughter.  Of  the  correctness  of  the  proposition  urged  in  behalf 
of  the  people  that  it  may  do  so,  subject  to  various  limitations,  we  entertain 
no  doubt.    Some  of  the  earlier  writers  on  the  common  law  held  that  a  cor- 

717 


§  444  PENALTIES — OFFENSES — 

In  actions  for  tort  a  corporation  may  be  held  responsible  for 
damages  for  the  acts  of  its  agent  within  the  scope  of  his  employ- 
ment, even  if  done  wantonly,  recklessly  or  against  the  express 
orders  of  the  principal.''*  A  corporation  is  responsible  for  acts 
not  within  its  agent's  powers  strictly  construed,  but  assumed 
to  be  done  by  him  when  employing  authorized  powers,  and  in 
such  case  no  written  authority  under  seal  is  necessary.    So  the 

poration  could  not  commit  a  crime.  Blackstone  in  his  Commentaries, 
chap.  18,  §  12,  stated:  'A  corporation  cannot  commit  treason  or  felony  or 
other  crime  in  its  corporate  capacity,  though  its  members  may  in  their  dis- 
tinct individual  capacities.'  And  Lord  Chief  Justice  Holt  (Anonymous,  12 
Modern,  555)  is  said  to  have  held  that  'a  corporation  is  not  indictable,  al- 
though the  particular  members  of  it  are.'  In  modern  times,  however,  the 
courts  and  text-writers  quite  universally  have  reached  an  opposite  conclu- 
sion. A  corporation  may  be  indicted  either  for  nonfeasance  or  misfeasance, 
the  obvious  and  general  Hmitations  upon  this  liability  being  in  the  former 
case  that  it  shall  be  capable  of  doing  the  act  for  nonperformance  of  which 
it  is  charged,  and  that  in  the  second  case  the  act  for  the  performance  of 
which  it  is  eharged  shall  not  be  one  of  which  performance  is  clearly  and 
totally  beyond  its  authorized  powers.  Bishop's  New  Criminal  Law,  §§  421, 
422.  The  instances  in  which  it  has  been  held  that  a  corporation  might  be 
liable  criminally  simply  because  it  did  or  did  not  perform  some  act,  and 
where  no  element  of  intent  was  supposed  to  be  involved,  are  so  familiar  that 
any  extended  reference  to  them  is  entirely  unnecessary.  The  latest  author- 
ity in  this  State  upholding  such  liabiHty  is  found  in  the  case  of  People  v. 
Woodbury  Dermatological  Institute,  192  N.  Y.  455,  85  N.  E.  697,  where  it 
was  held  that  a  corporation  might  be  punished  criminally  for  disobeying  the 
statute  providing  that  '  any  person  not  a  registered  physician  who  shall  ad- 
vertise to  practice  medicine,  shall  be  guilty  of  a  misdemeanor.'  There  was 
involved  no  question  of  intent,  but  simply  that  of  disobedience  of  a  statutory 
provision  against  doing  certain  acts.  At  times  courts  have  halted  somewhat 
at  the  suggestion  that  a  corporation  could  commit  a  crime  where  the  ele- 
ment of  intent  was  an  essential  ingredient.  But  this  doctrine,  again  with 
certain  limitations,  may  now  be  regarded  as  established,  and  there  is  nothing 
therein  which  is  either  unjust  or  illogical.  Of  course,  it  has  been  fully  recog- 
nized that  there  are  many  crimes  so  involving  personal,  malicious  intent  and 
acts  so  ultra  vires  that  a  corporation  manifestly  could  not  commit  them. 
Wharton's  Criminal  Law  (9th  ed.),  §  91;  Morawitz  on  Private  Corporations 
(2d  ed.),  §§  7.32  et  seq.  But  a  corporation,  generally  speaking,  is  liable  in 
civil  proceedings  for  the  conduct  of  the  agents  through  whom  it  conducts  its 
business  so  long  as  they  act  within  the  scope  of  their  authority,  real  or  ap- 
parent, and  it  is  but  a  step  further  in  the  same  direction  to  hold  that  in  many 
instances  it  may  be  charged  criminally  with  the  unlawful  purposes  and  mo- 
tives of  such  agents  while  so  acting  in  its  behalf." 
2*  See  §  317,  herein. 

718 


CRIMINAL   LIABILITY   OF  CORPORATIONS    §§  445,  446 

act  of  an  agent  exercising  the  authority  of  a  corporation  which 
is  a  common  carrier  to  make  rates  for  transportation  may  be 
controlled,  in  the  interest  of  pul)hc  pohcy,  by  imputing  his 
act  to  the  carrier  itself  and  imposing  penalties  therefor  upon  the 
carrier.^^ 

§  445.  Police  Power  of  States— Crimes  and  Penalties- 
Combinations  in  Restraint  of  Trade— Extent  of  Judicial 
Interference  by  Federal  Courts. 

The  fixing  of  punishment  for  crime  and  penalties  for  unlawful 
acts  is  within  the  police  power  of  the  State,  and  the  Federal 
Supreme  Court  cannot  interfere  with  State  legislation  in  fixing 
fines,  or  judicial  action  in  imposing  them,  unless  so  grossly  ex- 
cessive as  to  amount  to  deprivation  of  property  without  due 
process  of  law.  And  as  States  have  power  to  prevent  unlawful 
combinations  in  restraint  of  trade  they  may  provide  the  pro- 
cedure for  enforcing  the  same,  subject  only  to  the  qualification 
that  such  procedure  must  not  deny  or  conflict  with  fundamental 
or  constitutional  rights.^^  A  State,  in  the  absence  of  any  statute 
by  Congress,  has  plenary  power  in  regard  to  navigable  streams 
wholly  within  its  boundaries,  and  obstructions  in  such  streams, 
in  the  absence  of  statute,  constitute  no  offense  against  the 
United  States,  and  whether  obstructions  are  unlawful  under 
State  law  is  not  a  Federal  question.^^ 

§  446.  Corporation  Criminally  Liable — May  Be  Indicted. 

A  corporation  may  be  indicted  for  a  misfeasance  as  well  as  for 

25  New  York  Cent.  &  Hudson  River  Ry.  Co.  v.  United  States,  212  U.  S. 
481,  493,  500,  29  Sup.  Ct.  304,  309,  53  L.  ed.  613,  624  (a  case  of  indictment, 
and  conviction  in  Circuit  Court  of  railroad  company  and  its  assistant  traffic 
manager  for  payment  of  rebates;  imposition  of  fines;  writ  of  error).  See  also 
Lake  Shore  &  Michigan  Southern  R.  R.  v.  Prentice,  147  U.  S.  101,  37  L.  ed. 
97,  13  Sup.  Ct.  261 ;  Washington  Gas  Light  Co.  v.  Lansden,  172  U.  S.  534, 
43  L.  ed.  543,  19  Sup.  Ct.  296. 

26  Waters-Pierce  Oil  Co.  v.  Texas,  212  U.  S.  86,  29  Sup.  Ct.  220,  53  L.  ed. 
417,  aff'g  106  S.  W.  918.  Action  to  forfeit  permit  of  foreign  corporation  to 
do  business  in  State  and  to  assess  penalties  for  violation  of  antitrust  laws 
of  State.    As  to  excessive  penalties,  see  Young,  Ex  parte,  209  U.  S.  123. 

27  North  Shore  Boom  Co.  v.  Nicomen  Boom  Co.,  212  U.  S.  406,  53  L.  ed. 
574,  29  Sup.  Ct.  355;  Willamette  Iron  Bridge  Co.  v.  Hatch,  125  U.  S.  131, 
—  L.  ed.  629,  8  Sup.  Ct.  811.    Writ  of  error,  40  Wash.  315,  dismissed. 

719 


§  446  PENALTIES — OFFENSES 

a  nonfeasance.^^    iSo  railroad  corporations  are  liable  to  an  in- 
dictment for  the  act  of  their  officers  and  agents.'^    So  a  corpora- 

28  Commonwealth  v.  Proprietors  of  New  Bedford  Bridge,  2  Gray  (68 
Mass.),  336.  The  court,  per  Bigelow;  J.  (at  pp.  345,  346),  said:  "The  in- 
dictment in  the  present  case  is  for  a  nuisance.  The  defendants  contend  that 
it  cannot  be  maintained  against  them,  on  the  ground,  that  a  corporation 
though  liable  to  indictment  for  nonfeasance,  or  an  omission  to  perform  a 
legal  duty  or  obligation,  are  not  amenable  in  this  form  of  prosecution  for  a 
misfeasance,  or  the  doing  of  any  act  unlawful  in  itself  and  injurious  to  the 
rights  of  others.  There  are  dicta  in  some  of  the  early  cases  which  sanction 
this  broad  doctrine,  and  it  has  been  thence  copied  into  text-writers,  and 
adopted  to  its  full  extent  in  a  few  modern  decisions.  But  if  it  ever  had  any 
foundation  it  had  its  origin  at  a  time  when  corporations  were  few  in  number, 
and  limited  in  their  powers,  and  in  the  purposes  for  which  they  were  created. 
Experience  has  shown  the  necessity  of  essentially  modifying  it;  and  the  tend- 
ency of  the  more  recent  cases  in  courts  of  the  highest  authority  has  been  to 
extend  the  application  of  all  legal  remedies  to  corporations,  and  assimilate 
them,  as  far  as  possible,  in  their  legal  duties  and  responsibilities,  to  individ- 
uals. To  a  certain  extent,  the  rule  contended  for  is  founded  in  good  sense 
and  sound  principle.  Corporations  cannot  be  indicted  for  offenses  which  de- 
rive their  criminality  from  evil  intention,  or  which  consist  in  a  violation  of 
those  social  duties  which  appertain  to  men  and  subjects.  They  cannot  be 
guilty  of  treason  or  felony;  of  perjury  or  offenses  against  the  person.  But 
beyond  this,  there  is  no  good  reason  for  their  exemption  from  the  conse- 
quences of  unlawful  and  wrongful  acts  committed  by  their  agents  in  pur- 
suance of  authority  derived  from  them.  Such  a  rule  would,  in  many  cases, 
preclude  all  adequate  remedy,  and  render  reparation  for  an  injury,  com- 
mitted by  a  corporation,  impossible;  because  it  would  leave  the  only  means 
of  redress  to  be  sought  against  irresponsible  servants,  instead  of  against  those 
who  truly  committed  the  wrongful  act  by  commanding  it  to  be  done.  There 
is  no  principle  of  law  which  would  thus  furnish  immunity  to  a  corporation. 
If  they  commit  a  trespass  on  private  property,  or  obstruct  a  way  to  the 
special  injury  and  damage  of  an  individual,  no  one  can  doubt  their  liability 
therefor.  In  like  manner,  and  for  the  same  reason,  if  they  do  similar  acts  to 
the  inconvenience  and  annoyance  of  the  public,  they  are  responsible  in  the 
form  and  mode  appropriate  to  the  prosecution  and  punishment  of  such 
offenses." 

"  There  is  no  doubt  whatever  in  my  mind  of  the  soundness  of  the  conten- 
tion of  counsel  for  the  defendant  that  the  peculiar  form  of  the  statute  cov- 
ering this  case  makes  the  offense  a  felony;  but  I  am  equally  well  satisfied  that, 
because  it  makes  such  offense  a  felony,  it  is  no  answer  to  the  charge,  and 
that  a  corporation  may  be  punished  upon  indictment  for  a  felony  as  it  may 
for  a  misdemeanor.  It  is  urged  in  argument  that,  if  the  crime  stated  in  the 
indictment  is  a  felony,  then  the  corporation  could  not  be  punished,  and  that, 
therefore,  the  charge  by  the  grand  jury  is  without  force  or  effect.    It  is  true 


29  state  v.  Veriawt  Centrfil  Rd.  Co.,  27  Vt.  103. 

720 


CRIMINAL   LIABILITY   OF  CORPORATIONS  §  446 

tion  may  be  punished  criminally  for  peddling  through  the 
medium  of  an  unlicensed  agent.^"  So  the  general  manager  of  a 
corporation  in  active  charge  of  its  affairs  and  with  knowledge 
of  the  illicit  business  may  be  held  criminally  liable  for  such 
offense.^i  A  corporation  may  also  be  charged  with  an  offense 
which  only  involves  an  intention  to  do  a  prohibited  act,  and 
it  may  be  properly  convicted  when,  in  its  corporate  capacity, 
and  by  direction  of  those  controlling  its  corporate  action  it  does 
the  prohibited  act,  as  in  case  of  the  violation  of  an  eight-hour 
law.^^ 

A  corporation  is  not,  merely  because  it  is  a  creature  of  the 
law  without  physical  existence,  immune  from  indictment  and 
criminal  prosecution  for  nonfeasance  in  neglecting  to  perform 
duties  which  it  owes  to  the  public.^^  But  while  corporations 
in  accepting  their  charters,  impliedly  agree,  upon  condition  of - 
forfeiture,  to  conduct  their  business  conformably  to  the  laws 
of  the  State,  and  not  to  commit  crimes,  still  they  are  indictable 
only  where  a  statute  so  provides;  but  their  charters  may  be 
forfeited  at  the  suit  of  the  State.^^  In  case  a  statute  imposes  a 
fine  or  penalty  for  a  person  or  unincorporated  association  or 

that  a  corporation  cannot  be  imprisoned  or  hanged,  but  a  corporation  can 
be  fined  just  as  a  natural  person  can,  when  it  does  any  act  in  the  line  of  its 
business  resulting  in  a  violation  of  the  law.  If,  in  the  course  of  its  business, 
it  kill  a  person,  then  if  the  law  fix  a  fine  or  damages  for  such  unlawful  killing, 
even  though  it  were  a  felony,  the  law  could  be  enforced  for  the  payment  of 
such  fine,  and  the  property  of  the  corporation  made  to  answer;  and  where 
life  is  taken  by  a  corporation  in  pursuing  its  business,  and  it  is  compelled  to 
answer  civilly  because  of  such  wrongful  death,  there  is  no  good  reason  why 
it  may  not  be  required  to  answer  criminally  for  the  same  act  done  in  the  Une 
of  its  business,  if  the  law  so  provides.  Indeed,  it  seems  from  a  very  slight 
investigation  of  the  question  that  this  has  practically  been  the  law  always. 
There  are  a  few  old  cases  that  go  to  the  effect  that  a  corporation  cannot  be 
punished  for  a  felony,  but  all  the  more  modern  cases  are  the  other  way." 
United  States  v.  Alaska  Packers'  Assn.,  I  Alaska  R.  217,  per  Brow,  Dist.  J. 

30  Crall  &  Ostrander's  Case,  103  Va.  855,  49  S.  E.  638.    See  also  Standard 
Oil  Co.  V.  Commonwealth,  107  Ky.  606,  21  Ky.  L.  Rep.  1339,  55  S.  W.  8. 

31  Crall's  Case,  103  Va.  862,  49  S.  E.  1038. 

32  United  States  v.  John  Kelso  Co.  (U.  S.  C.  C),  86  Fed.  305. 

33  Southern  Railway  Co.  v.  State,  125  Ga.  287,  114  Am.  St.  Rep.  203,  54 
S.  E.  160. 

34  State  ex  rel.  v.  French  Lick  Springs  Hotel,  42  Ind.  App.  282,  82  N.  E. 
801,  85  N.  E.  724. 

46  721 


X  447  PENALTIES — OFFENSES — 

company  to  assume  a  corporate  name  in  order  to  solicit  business, 
such  statute  is  not  violated  by  merely  using  a  corporate  name 
without  any  fraudulent  intent  or  injurious  consequences  to 
others.^^ 

§  447.  Indictment  of  Corporations  for  Nuisances. 

A  corporation  and  its  officers  may  be  indicted  for  carrying  on 
a  business  which  constitutes  a  nuisance;  ^^  or  for  its  negligent 
acts  whereby  a  nuisance  arises,  as  in  the  case  where  water  is 
permitted  to  escape  and  form  stagnant  pools;  ^^  or  where  it  un- 
lawfully obstructs  a  pubHc  highway  or  navigable  stream  ;3»  or 
where  a  railroad  corporation  unlawfully  constructs  its  road 
across  a  public  highway;  ^^  or  where  it  permits  its  engines  and 
cars  to  remain  thereon  for  a  period  longer  than  is  reasonably 
necessary  for  a  safe  crossing;'*'^  or  where  they  build  their  sta- 
tion houses  in  highways,  which  they  merely  cross  with  their 
railroad,  and  the  location  of  which  they  do  not  change.''^ 

Again,  if  a  railroad  company  habitually  runs  its  trains  over 
a  highway  crossing  at  an  unreasonable  and  unsafe  rate  of  speed 
without  giving  reasonable  and  proper  signals  of  their  approach 
for  the  protection  of  life  and  property,  it  may  be  indicted  for 
committing  a  pubHc  nuisance;  but  all  the  matters  necessary 
to  show  the  illegahty  of  the  company's  action  must  be  stated  in 
the  indictment.  A  bill  of  particulars  cannot  take  the  place  of 
what  must  affirmatively  appear  on  the  face  of  the  indictment. 
An  indictment,  however,  charging  a  railroad  company  with  the 
frequent  and  rapid  passing  and  repassing  of  its  trains  over  a 
highway,   whereby   the  same   was  obstructed  and   rendered 

36  People  V.  Rose,  219  lU.  46,  76  N.  E.  42. 

36  People  V.  Detroit  White  Lead  Works,  82  Mich.  471,  46  N.  W.  735,  9  L. 
R.  A.  722. 

37  Delaware  Division  Canal  Co.  v.  Commonwealth,  60  Pa.  St.  367,  100 
Am.  Dec.  570. 

38  State  V.  Baltimore,  Ohio  &  Chicago  Rd.  Co.,  120  Ind.  298,  22  N.  E.  307; 
Commonwealth  v.  Massachusetts  Rd.  Corp.,  4  Gray  (70  Mass.),  22;  State  v. 
White,  96  Mo.  App.  34,  69  S.  W.  684. 

39  Commonwealth  v.  Massachusetts  Rd.  Corp.,  4  Gray  (70  Mass.),  22. 
«o  State  V.  Western  North  Carolina  Rd.  Co.,  95  N.  C.  602. 

«  State  V.  Vermont  Central  Rd.  Co.,  27  Vt.  103. 

722 


CRIMINAL   LIABILITY   OF  Cum'OIlATIONS    §§  448,  449 

dangerous,  charges  no  offense  either  under  the  statute  law  of 
Pennsylvania,  or  at  common  law.  With  the  statutory  permis- 
sion given  to  railroad  companies  to  cross  public  highways  with 
their  tracks,  there  necessarily  goes  the  right  to  frecjuently  cross 
them,  if  the  needs  of  the  public  for  whom  railroad  companies  are 
incorporated  require  the  frequent  movement  of  trains;  and  this 
is  so  of  their  speed. ^ 

§  448.  Insurance  Companies — Combinations — Conspira- 
cies— Insurance  as  "Commodity" — When  and  When  Not 
Indictable  Offenses. 

Insurance  is  a  commodity  within  the  meaning  of  the  Iowa 
Code^^  prohibiting  the  formation  of  combinations  between  in- 
dividuals or  corporations  to  regulate  or  fix  the  price  of  "oil,  lum- 
ber, coal  *  *  *  or  any  other  commodity,"  and  a  compact 
between  local  agents  in  a  city  to  fix  rates  upon  all  risks  therein, 
imposing  certain  penalties  for  taking  of  risks  at  less  rates  than 
those  fixed  by  the  association  is  within  the  inhibition  of  said 
Code  so  forbidding  the  formation  of  combinations  or  confeder- 
ations to  regulate  the  price  of  any  commodity.''^ 

Under  a  Kentucky  decision  it  is  not  an  indictable  offense  to 
conspire  to  fix  insurance  rates,  either  by  virtue  of  the  statute  ** 
against  conspiracies  to  regulate  the  prices  of  "merchandise, 
manufactured  articles  or  property  of  any  kind,"  or  by  the  com- 
mon law  as  it  existed  prior  to  the  fourth  year  of  King  James  I.'** 

§  449.  Criminal  Offenses  by  Corporations— Employment 
of  Children  Under  Certain  Age— Penalties. 

A  State  statute  prohibiting  the  employment  of  children,"' 
under  the  age  of  fourteen  years  in  mills  and  factories,  and  pro- 

«  Commonwealth  v.  Baltimore  &  Ohio  Ry.  Co.,  223  Pa.  St.  23,  72  Atl.  78. 

«  Iowa  Code,  §  5454. 

«  Beechley  v.  Mulville,  102  Iowa,  602,  63  Am.  St.  Rep.  47!),  70  N.  W.  107, 
71  N.  W.  428.  Examine  State  ex  inf.  Firemen's  Fund  Ins.  Co.,  152  Mo.  1, 
45  L.  R.  A.  363,  52  S.  W.  595. 

«  Section  3915,  Ky.  Stat. 

48  JFAnsk  Ins.  Co.  v.  Commonwealth,  106  Ky.  864,  25  Ky.  L.  Rep.  503,  45 
L.  R.  A  355. 

«  Mills'  Ann.  Stats.,  Colo.,  §  413. 

723 


§  450  PENALTIES — OFFENSES — 

viding  a  penalty  therefor,  applies  to  corporations  as  well  as 
to  natural  persons,  and  the  fact  that  the  statute  provides  for 
imprisonment  if  the  fine  imposed  is  not  paid  docs  not  exempt 
a  corporation  from  the  penalty,  but  the  fine  may  be  collected 
by  means  provided  for  the  collection  of  money  judgments. 
So  where  a  corporation,  through  its  agent  having  general 
authority  to  hire  and  discharge  employes,  employed  a  child 
under  the  age  of  fourteen  years  to  work  in  a  cotton  mill,  the 
corporation  is  guilty  and  subject  to  the  penalty  therefor,  not- 
withstanding instructions  had  been  given  by  the  company  to 
such  agent  not  to  employ  children  under  that  agc^^ 

§  450.  Indictment — While  a  Corporation  Might  Be  Liable 
for  Misfeasance  Under  Certain  Definitions  of  Manslaughter 
It  Cannot  Be  Guilty  of  Latter  Under  New  York  Penal  Code. 

A  definition  of  certain  forms  of  manslaughter  might  be  fonnu- 
lated  which  would  be  applicable  to  a  corporation  and  make  it 
criminally  liable  for  various  acts  of  misfeasance  and  non- 
feasance when  causing  death.  The  Penal  Code  of  New  York, 
however,"*^  defines  homicide  as  ''the  killing  of  one  human  being 
by  the  act,  procurement  or  omission  of  another,"  meaning  an- 
other human  being,  and  said  Code^"  also  makes  "such  homi- 
cide "  manslaughter  in  the  second  degree  under  certain  circum- 
stances. Under  these  definitions  a  corporation  cannot  be 
guilty  of  manslaughter.^^ 

48  Overland  Cotton  Mill  Co.  v.  People,  32  Colo.  263,  105  Am.  St.  Rep.  74, 
75  Pac.  924. 
48  Section  179. 

50  Subd.  3,  §  193. 

51  People  V.  Rochester  Ry.  &  Light  Co.,  195  N.  Y.  102,  88  N.  E.  22,  aflf'g 
114  N.  Y.  Supp.  755,  129  App.  Div.  843,  which  aff'd  112  N.  Y.  Supp.  362, 
59  Misc.  347  (a  case  of  an  indictment  for  crime  of  manslaughter  in  the  second 
degree).  The  court,  per  Hiscock,  J.,  said:  "Within  the  principles  thus  and 
elsewhere  declared,  we  have  no  doubt  that  a  definition  of  certain  forms  of 
manslaughter  might  have  been  formulated  which  would  be  applicable  to  a 
corporation,  and  make  it  criminally  liable  for  various  acts  of  misfeasance  and 
nonfeasance  when  resulting  in  homicide,  and  amongst  which  very  probably 
might  be  included  conduct  in  its  substance  similar  to  that  here  charged 
against  the  respondent.  But  this  being  so,  the  question  still  confronts  us 
whether  corporations  have  been  so  made  liable  for  the  crime  of  manslaughter 

724 


CRIMINAL   LIABILITY   OF  CORPORATIONS  §  451 

§  451.  Construction  of  Antitrust  Act— What  Prohibitions 
of  Embrace— Intent  of —What  Are  and  Are  Not  Illegal  Com- 
binations Within. 

The  prohibitions  of  the  Sherman  Antitrust  Law  •'^  do  not  ex- 
tend to  acts  done  in  foreign  countries  even  though  done  by 
citizens  of  the  United  States  and  injuriously  affecting  other 
citizens  of  the  United  States.  And  a  conspiracy  in  this  country 
to  do  acts  in  another  jurisdiction  does  not  draw  to  itself  those 
acts  and  make  them  unlawful  if  they  are  permitted  by  the 

as  now  expressly  defined,  in  the  section  alone  relied  on  by  the  people,  and 
this  question  we  think  must  be  decisively  answered  in  the  negative.     The 
New  York  Penal  Code,  §  179,  defines  homicide  as  'the  killing  of  one  human 
being  by  the  act,  procurement  or  omission  of  another.'    We  think  that  this 
final  word  'another,'  naturally  and  clearly  means  a  second  or  additional 
member  of  the  same  kind  or  class  alone  referred  to  by  the  preceding  words, 
namely,  another  human  being,  and  that  we  should  not  interpret  it  as  appel- 
lant asks  us  to,  as  meaning  another  '  person,'  which  might  then  include  corpo- 
rations.    It  seems  to  us  that  it  would  be  a  violent  strain  upon  a  criminal 
statute  to  construe  this  word  as  meaning  an  agency  of  some  kind  other  than 
that  already  mentioned  or  referred  to  and  as  bridging  over  a  radical  transi- 
tion from  human  beings  to  corporations.    Therefore  we  construe  this  defini- 
tion of  homicide  as  meaning  the  killing  of  one  human  being  by  another  human 
being.     Section  ISO  says  that:  'homicide  is  either:   (1)   murder;   (2)  man- 
slaughter,' etc.     Section   193  says  that:  'Such  homicide,'— that   is,    'the 
killing  of  one  human  being     *     *     *     j^y  another, — is  manslaughter  in  the 
second  degree  when  committed  '  without  a  design  to  effect  death;     *     *     * 
(3)  by  any  act,  procurement  or  culpable  negligence  of  any  person,  which 
*     *     *     does  not  constitute  the  crime  of  murder  in  the  first  or  second  de- 
gree, nor  manslaughter  in  the  first  degree.'    Thus  we  have  the  underlying 
and  fundamental  definition  of  homicide  as  the  killing  of  one  human  being 
by  another  human  being,  and  out  of  this  basic  act  thus  defined  and  accord- 
ing to  the  circumstances  which  accompany  it  are  established  crimes  of  vary- 
ing degree  including  that  of  manslaughter  for  which  the  respondent  has 
been  indicted.     In  the  definition  of  these  crimes  as  contained  in  the  sections 
under  consideration  (§§  183-193),  we  do  not  discover  any  evidence  of  an  in- 
tent on  the  part  of  the  legislature  to  abandon  the  limitation  of  its  enact- 
ments to  human  beings  or  to  include  a  corporation  as  a  criminal.     Many  of 
these  sections  could  not  by  any  possibility  apply  to  a  corporation  and  in 
our  opinion  subd.  3  of  §  193,  relating  to  manslaughter  manifestlj'  does  not. 
It  is  true  that  the  tenn  'person'  used  therein  may  at  times  include  corpora- 
tions, but  that  is  not  the  case  here.     The  surrounding  and  related  sections 
are  not  calculated  to  induce  the  belief  that  it  has  any  such  meaning,  and 
the  classification  of  manslaughter  as  a  form  of  homicide  and  the  definition 
of  homicide  already  quoted  forbid  it." 

52  Act  of  July  2,  1890,  chap.  647,  26  Stat.  209,  210. 

725 


§  451  PENALTIES — OFFENSES — 

local  law.  So  a  statute  will,  as  a  general  nilo,  be  construed  as 
intended  to  be  confined  in  its  operation  and  effect  to  the  terri- 
torial limits  within  the  jurisdiction  of  the  lawmaker,  and  words 
of  universal  scope  will  be  construed  as  meaning  only  those  sub- 
ject to  the  legislation;  and  while  a  country  may  treat  some  re- 
lations between  its  own  citizens  as  governed  by  its  own  law  in 
regions  subject  to  no  sovereign,  like  the  high  seas,  or  to  no  law 
recognized  as  adequate,  the  general  rule  is  that  the  character 
of  an  act  as  lawful  or  unlawful  must  be  determined  wholly  by 
the  law  of  the  country  where  it  is  done.  These  principles  were 
ai:»I)lied  in  a  case  in  the  Federal  Supreme  Court  in  an  action 
which  had  been  brought  by  an  Alabama  corporation  against  a 
New  Jersey  corporation  to  recover  threefold  damages,  under 
the  above-mentioned  act  to  protect  trade  against  monopolies; 
the  acts  complained  of  being  done  with  the  intent  to  prevent 
trade  and  competition  and  to  enable  defendant  to  monopolize 
and  restrain  the  trade  and  to  maintain  unreasonable  prices. 
As  a  result  of  the  defendant's  acts  done  in  a  foreign  country  the 
plaintiff  was  deprived  of  his  property  in  the  same  country  and 
his  supplies  injured,  and  defendant  had  also  compelled  pro- 
ducers to  come  to  his  terms  and  had  prevented  the  plaintiff 
from  buying  for  export  and  sale.  The  Circuit  Court  dismissed 
the  complaint,  upon  motion,  as  not  setting  forth  a  cause  of  ac- 
tion, and  that  judgment  was  affirmed  in  the  Circuit  Court  of  Ap- 
peals and  also  by  the  vSupreme  Court.^^ 

Where  a  number  of  manufacturers  situated  in  different 
States  engaged  in  manufacturing  an  article  sold  in  different 
States,  organize  a  selling  company  through  which  their  entire 
output  is  sold,  in  accordance  with  an  agreement  between  them- 
selves, to  such  persons  only  as  enter  into  a  purchasing  agree- 
ment by  which  their  sales  are  restricted,  the  effect  is  to  restrain 
and  monopolize  interstate  and  foreign  trade  and  commerce  and 
is  illegal  under  the  Antitrust  Act;  ^"^  and  it  has  so  held  in  regard 

63  American  Banana  Co.  v.  United  Fruit  Co.,  213  U.  S.  347,  53  L.  ed.  826, 
29  Sup.  Ct.  511. 

54  Act  of  July  2,  1890,  chap.  647,  26  Stat.  209;  U.  S.  Comp.  Stat.,  1901, 
pp.  3"20()  et  seq.     See  next  following  note. 

726 


CRIMINAL   LIABILITY   OF  CORPORATIONS  §  452 

to  a  combination  of  wall  paper  manufacturers.^^  Under  the  In- 
terstate Commerce  Act  where  a  shipper  pays  the  legal  rate  on 
numerous  shipments  and  at  intervals  receives  a  rebate  from 
the  carrier  there  is  a  separate  and  complete  offense  on  each 
payment  and  not  one  continuous  offense,  although  all  the  pay- 
ments were  made  under  one  agreement  .^^ 

§  452.  Construction  of  Elkins  Act— Criminal  Intent— Ac- 
cepting Rebates— When  Carrier  Liable  as  Party  to  Joint  Rate. 

While  intent  is  to  some  extent  essential  in  the  commission 
of  crime,  and  without  determining  whether  a  shipper  honestly 
paying  a  reduced  rate  in  the  belief  that  it  is  the  published  rate 
is  liable  under  the  statute,  it  is  held  that  shippers  who  pay 
such  a  rate  with  full  knowledge  of  the  published  rates,  and 
contend  that  they  have  a  right  so  to  do,  commit  the  offense 
prohibited  in  the  Elkins  Act,  and  are  subject  to  the  penalties 
provided  therein,  even  though  their  construction  be  a  mis- 
take of  law.^^  While  criminal  statutes  are  not  to  be  enlarged 
by  construction,  and  a  crime  must  be  clearly  defined  in  its 
terms,  they  are  to  be  reasonably  construed  with  a  view  to 
effecting  the  purpose  of  their  enactment,  and  this  applies  to 
that  provision  of  the  Elkins  Act  ^^  which  relates  to  published 
rates  and  the  conclusiveness  of  such  rate  as  a  legal  rate  in  any 
prosecution  under  said  enactment;  said  provision  not  being 
narrowly  construed  as  one  relating  to  evidence  but  as  bringing 

55  Continental  Wall  Paper  Co.  v.  Voight  &  Sons  Co.,  212  U.  S.  227,  29 
Sup.  Ct.  280,  53  L.  ed.  486,  aff'g  148  Fed.  939.  The  remedies  given  by  the 
Antitrust  Act  of  1890  are  three  in  number:  First,  a  criminal  prosecution; 
second,  a  forfeiture  of  property;  and,  third,  an  action  by  any  person  injured 
to  recover  threefold  damages.    The  defendant  sought  none  of  these  remedies. 

58  New  York  Cent.  &  Hudson  River  Ry.  Co.  v.  United  States,  212  U.  S. 
481,  500,  29  Sup.  Ct.  304,  309,  53  L.  ed.  613,  624  (a  case  of  indictment  and 
conviction  in  Circuit  Court  of  railroad  company  and  its  assistant  traffic  man- 
ager for  payment  of  rebates;  imposition  of  fines;  writ  of  error). 

57  Armour  Packing  Co.  v.  United  States,  209  U.  S.  56,  52  L.  ed.  681,  28 
Sup.  Ct.  428,  afi'g  153  Fed.  1  (a  case  of  conviction  for  rebates). 

Criminal  intent,  see  State  ex  inf.  v.  Firemen's  Fund  Ins.  Co.,  152  Mo.  1, 
45  L.  R.  A.  363,  52  S.  W.  595. 

5«  Act  of  Feb.  19,  1903,  chap.  708,  32  Stat.  847,  §  1;  U.  S.  Comp.  Stat. 
Supp.,  1903,  p.  363;  U.  S.  Comp.  Stat.  Supp.,  1907,  p.  880;  U.  S.  Comp. 
Stat.  Supp.,  1909,  p.  1138. 

727 


§§  453,  454        PENALTIES — OFFENSES — 

all  carriers  who  have  participated  in  any  rate  filed  or  pub- 
lished within  the  terms  of  the  act,  as  much  so  as  if  the  tariff 
had  been  actually  published  and  filed  by  such  participating 
carriers.  A  carrier,  therefore,  under  said  Elkins  law  can  be 
prosecuted  for  the  offense  of  rebating  where  it  is  a  party  to  a 
joint  rate  although  it  has  not  filed  or  pubhshed  the  same.'^^ 

§  453.  Construction  of  Elkins  Act—"  Device  "  to  Obtain 
Rebates. 

A  device  to  obtain  rebates  to  be  within  the  prohibition  of 
the  Interstate  Commerce  Act,^"  and  the  Elkins  Act  ^^  need  not 
necessarily  be  fraudulent.  The  term  "device"  as  used  in 
those  statutes  includes  any  plan  or  contrivance  whereby 
merchandise  is  transported  for  less  than  the  published  rate, 
or  any  other  advantage  is  given  to,  or  discrimination  practiced 
in  favor  of  the  shipper.^^ 

§  454.  Penal  Statute— Retroactive  Effect— Liability  Un- 
der, of  Party  Carrying  Out  Illegal  Agreement  Executed 
Prior  to  Its  Passage. 

Even  though  it  would  be  giving  a  penal  statute  a  retroactive 
effect  to  make  it  apply  to  an  unlawful  agreement  executed 

59  United  States  v.  New  York  Central  &  Hudson  River  Rd.  Co.,  212  U.  S. 
509,  29  Sup.  Ct.  313,  53  L.  ed.  G29.  A  proceeding  in  the  Federal  Supreme 
Court  under  the  act  of  March  2,  1907,  chap.  2564,  34  Stat.  1246;  U.  S.  Comp. 
Stat.  Supp.,  1909,  p.  220  ("an  act  providing  for  writs  of  error  in  certain  in- 
stances in  criminal  cases")  permitting  the  government  to  bring  to  said 
Supreme  Court  a  case  where  the  court  below  sustains  an  indictment,  in 
which  the  judgment  involves  the  construction  of  a  Federal  statute  upon 
which  the  indictment  is  founded.  The  effect  of  the  charges  in  the  indict- 
ment was  that  defendant  did  unlawfully  and  willfully  give  a  rebate  and 
concession  in  violation  of  the  act  to  regulate  commerce,  whereby  the  prop- 
erty was  transported  by  the  corporation  charged  at  a  less  rate  than  that 
named  in  the  tariiTs  published  and  filed  by  said  common  carrier  as  required 
by  the  act  to  regulate  commerce  and  the  acts  amendatory  thereof  and  sup- 
plemental thereto. 

60  Act  of  March  2,  1S89,  25  Stat.  857;  U.  S.  Comp.  Stat.,  p.  3161. 

81  Act  of  Feb.  19,  1903,  chap.  708,  32  Stat.  847;  U.  S.  Comp.  Stat.  Supp., 
1903,  pp.  363-366;  U.  S.  Comp.  Stat.  Supp.,  1907,  pp.  880  et  seq.;  U.  S. 
Comp.  Stat.  Supp.,  1909,  pp.  1138  et  seq. 

62  Armour  Packing  Co.  v.  United  States,  209  U.  S.  56,  52  L.  ed.  681,  28 
Sup.  Ct.  428,  aff'g  153  Fed.  1,  a  case  of  conviction  for  rebates. 

728 


CRIMINAL   LIABILITY   OF  CORPORATIONS  §  455 

prior  to  the  passage  of  the  act  by  defendant's  predecessor  in 
interest,  such  defendant  is  subject  to  conviction  for  violating 
the  act  after  its  enactment  by  making  itself  a  party  to  and 
carrying  out  its  illegal  provisions.*^^ 

§  455.  State  Jurisdiction  Over  Violation  of  Antitrust  Law 
Where  Agreement  Made  Out  of  State— Extraterritorial  Ef- 
fect of  Conspiracy,  etc.,  Statute. 

Although  an  agreement  to  violate  the  antitrust  law  of  a 
State  may  be  made  outside  of  the  State,  if  the  parties  thereto 
or  their  agents  execute  it  or  attempt  so  to  do,  within  the  State, 
they  are  under  the  jurisdiction  of  the  State  and  their  con- 
viction for  such  acts  is  not  without  due  process  of  law .*'*  The 
Antitrust  Act  of  Arkansas  which  provides  that  any  corpora- 
tion organized  under  the  laws  of  this  or  any  other  State,  or 
country,  and  transacting  or  conducting  any  kind  of  business 
in  said  State,  or  any  partnership  or  individual  who  shall  create, 
enter  into,  become  a  member  of,  or  a  party  to,  any  pool,  trust, 
agreement,  combination,  confederation  or  understanding  to 
fix  or  limit  the  price  or  premium  to  be  paid  for  insuring  prop- 
erty against  loss  or  damage  by  fire  shall  be  deemed  and  ad- 
judged guilty  of  a  conspiracy  to  defraud,  etc.,^  does  not  apply 
to  pools  or  combinations  formed  outside  of  the  State,  and  not 
intended  to  afTect  and  which  do  not  affect,  persons  or  property 
or  prices  of  insurance  in  that  State.®^ 

83  Waters-Pierce  Oil  Co.  v.  Texas,  212  U.  S.  86,  29  Sup.  Ct.  220,  53  L.  ed. 
417,  aff'g  106  S.  W.  918,  an  action  to  forfeit  permit  of  foreign  corporation 
to  do  business  in  State,  and  to  assess  penalties  for  violation  of  Antitrust 
laws  of  State. 

Antimonopoly  Act;  when  action  by  attorney-general  against  combination 
formed  prior  to  passage  of  act  of  N.  Y.,  1899,  chap.  690,  is  not  too  late,  see 
Matter  of  Davies,  168  N.  Y.  89,  61  N.  E.  118,  56  L.  R.  A.  855,  67  N.  Y.  Supp. 
492,  55  App.  Div.  245,  rev'g  66  N.  Y.  Supp.  129,  32  Misc.  1. 

64  Waters-Pierce  Oil  Co.  v.  Texas,  212  U.  S.  86,  29  Sup.  Ct.  220,  53  L.  ed. 
417,  aff'g  106  S.  W.  918.  Action  to  forfeit  permit  of  foreign  corporation  to 
do  business  in  the  State  and  to  assess  penalties  for  violation  of  antitrust 
laws  of  State. 

65  Acts  Ark.,  1899,  p.  50. 

68  state  V.  Lancashire  Fire  Ins.  Co.,  66  Ark.  466,  45  L.  R.  A.  348,  51  S.  W. 
633. 

729 


§  456  PENALTIES — OFFENSES — 

§  456.  Constitutional  Law— Elkins  Act— Liquor  Laws — 
Regulation  of  Carriers — Excessive  Fines. 

Congress  has  power  to  so  regulate  interstate  commerce  as 
to  secure  equal  rights  to  all  engaged  therein,  and  the  Elkins 
Act®'  is  not  unconstitutional  because  it  imputes  to  the  cor- 
poration, and  makes  it  criminally  responsible  for  acts  violative 
of  the  Interstate  Commerce  Act  done  by  its  agent.  So  the 
court  will  recognize  that  the  greater  part  of  interstate  com- 
merce is  conducted  by  corporations,  and  it  will  not  relieve 
them  from  punishment  because  at  one  time  there  was  a  doc- 
trine that  corporations  could  not  commit  crime.  And  even 
if  a  statute  relating  both  to  individuals  and  corporations  de- 
prives an  individual  of  the  presumption  of  innocence  and  makes 
him  responsible  for  the  acts  of  another,  the  question  of  the 
constitutionality  of  such  statute  on  that  ground  cannot  be 
raised  by  a  corporation;  and  where,  as  in  the  case  of  the  Elkins 
Act,®*  there  is  no  doubt  that  Congress  could  have  enacted  the 
statute  as  to  corporations,  even  if  it  could  not  as  to  individuals, 
it  is  valid  as  to  corporations.®^ 

A  statute  of  Kentucky,  making  penal  all  shipments  of 
liquor  "to  be  paid  for  on  delivery,  commonly  called  C.  0.  D. 
shipments,"  and  further  providing  that  the  place  where  the 
money  is  paid  or  the  goods  delivered  shall  be  described  to  be 
the  place  of  sale  and  that  the  carrier  and  his  agents  delivering 
the  goods  shall  be  jointly  liable  with  the  vendor,  is  as  applied 
to  shipments  from  one  State  to  another  an  attempt  to  regulate 
interstate  commerce  and  beyond  the  power  of  the  State. '^" 

67  Act  of  Feb.  19,  1903,  chap.  708,  32  Stat.  847;  U.  S.  Comp.  Stat.  Supp., 
1903,  pp.  363-366;  U.  S.  Comp.  Stat.  Supp.,  1907,  pp.  880  et  seq.;  U.  S.  Comp. 
Stat.  Supp.,  1909,  pp.  1138  et  seq. 

68  Act  of  Feb.  19,  1903,  chap.  708,  32  Stat.  847;  TJ.  S.  Comp.  Stat.  Supp., 
1903,  pp.  363-366;  U.  S.  Comp.  Stat.  Supp.,  1907,  pp.  880  et  seq.;  U.  S. 
Comp.  Stat.  Supp.,  1909,  pp.  1138  et  seq. 

6»  New  York  Cent.  &  Hudson  River  Ry.  Co.  v.  United  States,  212  U.  S. 
481,  500,  29  Sup.  Ct.  304,  309,  53  L.  ed.  613,  624  (a  case  of  indictment  and 
conviction  in  C'ircuit  Court  of  raihoad  company  and  its  assistant  traffic  man- 
ager for  payment  of  rebates;  imposition  of  fines,  writ  of  error),  citing  Berea 
College  V.  Kentucky,  211  U.  S.  45,  29  Sup.  Ct.  33,  53  L.  ed.  81. 

70  Adams  Exp.  Co.  v.  Kentucky,  206  U.  S.  129, 51  L.  ed.  987,  27  Sup.  Ct.  606. 

730 


CRIMINAL   LIABILITY  OP  CORPORATIONS  §  457 

It  is  within  the  constitutional  power  of  the  General  Assembly 
of  a  State  to  impose  upon  a  railway  company  the  duty  of  pro- 
viding an  adequate  supply  of  pure  drinking  water  for  its 
passengers  while  journeying  upon  its  cars,  and  to  provide 
that  the  corporation  shall  be  indicted,  prosecuted  and  fined 
for  a  neglect  of  this  public  duty.  In  so  far  as  the  legislature 
has  undertaken  to  inflict  upon  violators  of  a  Penal  Code,^^ 
punishment  other  than  fine,  the  punitive  clause  thereof  is 
inoperative,  because  incapable  of  enforcement.  Such  section 
is  not,  however,  violative  of  the  constitutional  requirement 
that  all  general  laws  shall  have  uniform  operation;  since  all 
violators  convicted  thereunder  must  necessarily  be  jjunished 
in  the  same  way,  by  fine  and  not  otherwise.'^  But  where  a 
State  antitrust  law  fixed  penalties  at  five  thousand  dollars 
a  day,  and  after  verdict  of  guilty  for  three  hundred  days,  a 
defendant  corporation  was  fined  over  one  million  six  hundred 
thousand  dollars,  the  Federal  Supreme  Court  will  not  hold  that 
the  fine  is  so  excessive  as  to  amount  to  deprivation  of  property 
without  due  process  of  law,  where  it  appears  that  the  business 
was  extensive  and  profitable  during  the  period  of  violation,  and 
that  the  corporation  has  over  forty  million  dollars  of  assets 
and  has  declared  dividends  amounting  to  several  hundred 
per  cent.'^ 

§  457.  Sufficiency  of  Indictment. 

In  Nebraska,  in  order  to  charge  a  criminal  violation  of  the 
statute  of  that  State  ''*  "to  protect  trade  and  commerce  against 
unlawful  restraints  and  monopolies"  known  as  the  "Anti- 
Trust  Law"  or  the  "Junkin  Act,"  the  indictment  or  informa- 
tion must  allege  that  the  facts  complained  of  were  in  restraint 

71  Ga.  Penal  Code,  §  522. 

72  Southern  Railway  Co.  v.  State,  125  Ga.  287,  114  Am.  St.  Rep.  2():l,  54 
S.  E.  160. 

73  Waters-Pierce  Oil  Co.  v.  Texas,  212  U.  S.  86,  29  Sup.  Ct.  220,  53  L. 
ed.  417,  aff'd  106  S.  W.  918.  Action  to  forfeit  permit  of  foreign  corpora- 
tion to  do  business  and  to  assess  penalties  for  violation  of  antitrust  laws 
of  State.     Examine  Young,  Ex  parte,  209  U.  S.  123. 

74Comp.  Stat.,  1907,  §  1,  Art.  II,  chap.  91a. 

731 


§  457  PENALTIES — OFFENSES — 

of  trade  within  that  State.'^  An  indictment  which  clearly  and 
distinctly  charges  each  and  every  element  of  the  offense  in- 
tended to  be  charged,  and  which  distinctly  advises  the  de- 

75  Howell  V.  State,  83  Neb.  448,  120  N.  W.  139.  In  this  case,  plaintiff  in 
error,  with  more  than  fifty  other  persons  was  indicted  by  the  grand  jury  for 
a  violation  of  that  part  of  Art.  II,  chap.  91o,  Comp.  Stat.,  1907,  relating  to 
"Restraints,  monopolies,  rebates,"  commonly  known  as  the  "Antitrust 
Law,"  or  the  "  Junkin  Act."  The  prosecution  grew  out  of  the  creation  ami 
existence  of  an  organization,  or  alleged  combination  of  dealers  in  coal  and 
wood,  under  the  name  of  the  "Omaha  Stock  Exchange"  for  the  purpose, 
as  alleged,  of  fixing  and  establishing  the  price  of  fuels  to  be  sold  at  retail. 
Plaintiff  in  error  was  found  "  guilty  of  restraint  of  trade  as  he  stood  charged 
in  the  information."  A  motion  for  a  new  trial  was  overruled  and  a  judg- 
ment for  conviction  was  entered  and  on  error  the  judgment  was  reversed. 
The  court,  per  Reese,  C.  J.,  after  stating  what  we  have  above  given  in  sub- 
stance, says:  "The  first  count  charges  the  persons  indicted  with  having 
'unlawfully  and  feloniously  joined  themselves  together  and  formed  a  trust 
and  combination,  the  purpose  and  effect  of  which  trust  and  combination 
is  to  restrain  trade,  to  increase  prices  of  coal  and  other  fuels,  to  prevent 
competition  in  the  sale  of  coal  and  other  fuels,  to  fix  the  price  of  coal  and 
other  fuels,  and  to  agree  not  to  sell  any  coal  and  other  fuels  below  a  certain 
fixed  figure,  and  that  said  defendants,  naming  them,  are  unlawfully  aiding, 
advising,  abetting,  counseling  and  acting  in  pursuance  to  an  agreement 
entered  into  by  the  members  of  said  trust  and  combination,  which  trust  and 
combination  has  unlawfully  prevented,  and  does  unlawfully  prevent,  com- 
petition in  the  sale  of  coal  and  other  fuels,  and  have  unlawfully  agreed  not 
to  sell  coal  and  other  fuels  below  a  certain  figure,  and  have  unlawfully  pre- 
vented the  sale  of  coal  and  other  fuels  below  a  certain  fixed  figure  deter- 
mined by  said  trust  and  combination  with  the  intent  then  and  there  and 
thereby  unlawfully,  feloniously  and  arbitrarily  to  prevent  competition  and 
fix  an  established  price  at  which  said  coals  and  other  fuels  are  sold.'  This 
count  is  attacked  upon  the  ground  that  it  is  nowhere  charged  that  the  al- 
leged trust,  combination,  or  monopoly  was  with  the  intent  and  for  the 
purpose  of  fixing  and  controlling  prices  of  coal  and  other  fuels  in  this  State. 
The  language  cf  the  statute  under  which  the  indictment  was  drawn  pro- 
vides: 'Every  contract^  combination  in  the  form  of  a  trust  or  otherwise,  or 
conspiracy  in  restraint  of  trade  or  commerce  within  this  State,  is  hereliy 
declared  to  be  illegal,'  etc.  It  is  evident  that  the  object  of  the  legislation  was 
and  is  to  make  criminal  the  formation  of  such  conspiracies  w^thin  this  State 
for  the  purpose  of  restraining  or  controlling  trade  or  commerce  within  its 
borders,  as  there  is  no  authority  making  such  acts  criminal  when  interstate 
commerce  is  to  be  thereby  affected.  It  follows  that  that  count  of  the  in- 
dictment must  be  held  incomplete  and  does  not  charge  the  commission  of 
an  offense.  *  *  *  Jq  the  construction  of  this  statute  and  the  article 
of  the  constitution  copied,  we  are  cited  to  the  decision  of  the  Supreme  Court 
of  the  United  States,  in  the  case  of  Hopkins  v.  United  States,  171  U.  S.  578, 
19  Sup.  Ct.  40,  43  L.  ed.  290,  and  by  some  it  is  thought  to  be  decisive  of  this 

732 


CRIMINAL  LIABILITY   OF  CORPORATIONS  §  457 

fendant  of  what  he  is  to  meet  at  the  trial  is  sufficient,  and  it 
has  been  so  held  in  a  case  as  to  an  indictment  lor  acccj^ting 
rebates  prohibited  by  the  Elkins  Act,  although  the  details  of  the 
device  l)y  which  the  rebates  were  received  were  not  set  out/* 
An  indictment  is  sufficient  if  it  specifically  states  the  ele- 
ments of  the  offense  charged  with  sufficient  particularity  to 
fully  advise  the  defendant  thereof  and  so  as  to  be  i)leaded  in 
bar  of  any  subsequent  prosecution  for  the  same  offense.''^ 

question.  In  that  case  the  members  of  the  Kansas  City  Live  Stock  Exchange, 
a  voluntary  incorporated  association,  had  agreed  upon  certain  rules  govern- 
ing the  transaction  of  their  business,  the  truth  of  which  ]5rohibite(l  the  em- 
ployment of  any  agent,  solicitor,  or  employd  except  upon  a  stipulated 
salary,  not  contingent  upon  the  commission  earned,  and  that  not  more 
than  three  solicitors  should  be  employed  at  one  time  by  a  commission,  firm, 
or  corporation,  resident  or  nonresident  of  Kansas  City.  The  eleventh  rule 
prohibited  the  members  from  sending  or  causing  to  be  sent  a  i)rcpaid  tele- 
gram or  telephone  message,  quoting  markets  or  giving  infonnation  as  to 
the  condition  of  the  same  under  the  penalty  of  a  fine.  The  ground  upon 
which  that  case  w-as  decided  was  that  the  business  of  the  Kansas  City  Live 
Stock  Exchange  was  not  interstate  business,  and  therefore  was  not  subject 
to  control  by  act  of  Congress  under  which  the  suit  had  been  instituted. 
What  the  decision  would  have  been  had  that  question  been  decided  other- 
wise is  subject  to  conjecture.  It  is  true  that  the  court  holds  that  the  rules 
referred  to  are  not  violative  of  the  law  of  Congress,  but  this  is  based  solely 
upon  the  fact  that  the  business  to  which  they  refer  is  not  interstate  commerce. 
In  Addyston  Pipe  &  Steel  Co.  v.  United  States,  175  U.  S.  211,  243,  20  Sup. 
Ct.  96,  108,  44  L.  ed.  136,  the  same  judge  who  wiote  the  opinion  in  the 
Hopkins  Case  says:  'The  cases  of  Hopkins  v.  United  States,  171  U.  S.  578, 
19  Sup.  Ct.  40,  43  L.  ed.  290,  and  Anderson  v.  United  States,  171  U.  S.  604, 
19  Sup.  Ct.  50,  43  L.  ed.  300,  are  not  relevant.  In  the  Hopkins  case  it  was 
held  that  the  business  of  the  members  of  the  Kansas  City  Live  Stock  Ex- 
change was  not  interstate  commerce  and  hence  the  act  of  Congress  did  not 
affect  them.'  The  same  is  stated  in  substance,  in  Montague  &  Co.  v.  Lowry, 
193  U.  S.  39,  48,  24  Sup.  Ct.  307,  48  L.  ed.  608;  Swift  &  Co.  v.  United  States, 
196  U.  S.  375,  397,  25  Sup.  Ct.  276,  49  L.  ed.  518;  and  Loewe  v.  Lawlor,  208 
U.  S.  274,  297,  28  Sup.  Ct.  301,  52  L.  ed.  488.  We  thus  refer  to  the  Hop- 
kins case  at  some  length  because  it  is  insisted  by  some  to  be  decisive  of  this 
case,  which  it  clearly  is  not." 

Indictment  held  sufficient;  false  entry  in  corporation's  books  by  oflScer,  see 
Commonwealth  v.  Dewhirst,  190  Mass.  293,  76  N.  E.  1052. 

Requisites  of  indictment;  averment  of  corporate  name  necessary,  see  Stand- 
ard Oil  Co.  v.  Commonwealth,  29  Ky.  L.  Rep.  5,  91  S.  W.  1128. 

76  Armour  Packing  Co.  v.  United  States,  209  U.  S.  56,  62  L.  ed.  681,  28 
Sup.  Ct.  428,  aff'g  153  Fed.  1  (a  case  of  conviction  for  rebates). 

"  New  York  Cent.  &,  Hudson  River  Ry.  Co.  v.  United  States,  212  U.  S. 

733 


§  458  PENALTIES — OFFENSES — 

When,  in  a  prosecution  of  an  express  company  for  a  viola- 
tion of  such  a  statute  by  an  interstate  shipment,  it  is  averred 
in  the  indictment  or  stipulated  by  the  prosecution  that  the 
shipment  and  delivery  we^-e  made  and  done  by  the  express 
company  in  the  usual  course  of  its  business  as  a  carrier,  testi- 
mony that  the  consignee  did  not  order  the  goods  or  that  the 
goods  were  held  by  the  agent  of  the  comi)any  at  the  place  of 
delivery  for  a  few  days  to  accommodate  the  consignee  is  im- 
material 7* 

§  458.  Discrimination  in  Rates— Rebates— Elkins  Act — 
Criminal  Law— Place  of  Trial— Single  Continuous  Offense. 

Transportation  of  merchandise  by  a  carrier  for  less  than  the 
published  rate  is,  under  the  Elkins  Act,^"  a  single  continuing 
offense,  continuously  committed  in  each  district  through  which 
the  transportation  is  conducted  at  the  prohibited  rate,  and  is 
not  a  series  of  separate  offenses,  and  the  jirovision  in  the 
law  making  such  an  offense  triable  in  any  of  those  districts, 
confers  jurisdiction  on  the  court  therein,  and  does  not  violate 
the  Sixth  Amendment  to  the  Federal  Constitution,*"  providing 
that  the  accused  shall  be  tried  in  the  State  and  district  where 
the  crime  was  committed.*^ 

481,  29  Sup.  Ct.  403,  53  L.  ed.  613  (a  case  of  conviction  of  railroad  company 
in  Circuit  Court  for  payment  of  rebate  and  writ  of  error). 

78  Adams  Express  Co.  v.  Kentucky,  206  U.  S.  129,  51  L.  ed.  9S7,  27  Sup. 
Ct.  606. 

79  Act  of  Feb.  19,  1903,  chap.  708,  32  Stat.  847;  U.  S.  Gomp.  Stat.  Supp., 
1903,  pp.  363-366;  U.  S.  Comp.  Stat.  Supp.,  1907,  pp.  880  el  seq.;  U.  S.  Comp. 
Stat.  Supp.,  1909,  pp.  1138  et  seq. 

80  Art.  Ill,  §  2. 

81  Armour  Packing  Co.  v.  United  States,  209  U.  S.  56,  52  L.  ed.  681,  28 
Sup.  Ct.  428,  aff'g  153  Fed.  1  (a  case  of  conviction  for  rebate). 


734 


INDEX 


INDEX 

A 
ABATEMENT, 

plea  in;  sufficient  averment  as  t(j  jurisdiction §  82 

of  nuisance;  suit  for;  parties x  22!i 

ABUTTING  OWNER, 

right  of  action  by,  for  railway  or  electric  line  in  street §  242 

and    attorney-general;    parties    to    restrain    construction   street 

railway ^  2')l 

suit  by,  to  enjoin  street  railway  company  from  accepting    fran- 
chise   §  2  5S 

ejectment  by;  when  does  and  does  not  lie;  telegraph  poles,  etc..  .  §  315 
whether  additional  burden  imposed  on,  by  telegraph,  telephone 

and  electric  railway  lines note,  §  315 

ACCOUNTING, 

action  against  trustees  for;  parties §  261 

suit  by  corporations  against  officers  or  directors  for §  262 

stockholders  may  sue  corporation  officers  for §  263 

and  receivership ;  suit  by  policy  holder  against  insurance  company 

for §  27f) 

suit  by  stockholders  for;  parties §  104 

equity §  4 13 

proceeds  of  sale  on  foreclosure  of  mortgage §417 

ACCOUNT  STATED, 

assumpsit §  322 

ACTION, 

commencement  of;  jurisdiction §  S3 

praecipe  filed ;  commencement  of  action §  S3 

when  insurance  policy  limitation  as  to  time  of  bringing  suit  is 

not  a  bar §  S3 

under  statutes;  generally §  314 

on  the  case  lies  concurrently  with  a.ssumpsit §  333 

when  special  or  statutory  actions  or  proceedings  exclusive §  384 

See  Actions  Ex  Contractu:  .\otions  Ex  Delicto:  ronditions  prec- 
edent; Criminal  or  Penal  Offenses;  Equity;  Law,  Actions  at; 
Parties. 

47  737 


738  INDEX 

ACTIONS  AT  LAW, 

mi:st  be  brought  to  recover  excessive  charges  by  carriers  §  150 

See  names  of  the  various  actions.    See  Criminal  m-  Penal  Offenses; 
Law,  Actions  at. 

ACTIONS  EX  CONTRACTU, 

election  of  remedy §  819 

to  recover  on  agreement  for  services §  320 

to  recover  for  services  rendered  and  money  expended §  320 

to  recover  agairr.t  contractor  corporation  for  unskillfully  doing 

work §  320 

to  recover  for  removal  of  timber §  320 

for  damages  on  attachment  bond §  320 

contracts  express  and  implied ;  instances,  generally §  320 

assumpsit ; S  321 

assumpsit;  account  stated §  322 

assumpsit  by  and  against  banks §  323 

debt §  324 

covenant 8  325 

book  account §  326 

ACTIONS  EX  DELICTO, 

election  of  remedy §  319 

by  passenger  against  railroad  for  ejection  from  train,  generally.  .  §  327 
action  against  water  company  for  damages  resulting  from  negli- 
gence   §  327 

trespass §  328 

trespass  for  mesne  profits §  329 

trespass  quare  clatisum  fregit §  330 

false  imprisonment §  331 

trespass  on  case §  332 

when  action  on  case  lies  concurrently  with  assumpsit §  333 

nuisance §  334 

libel  and  slander §  335 

malicious  prosecution §  336 

wrongfully  suing  out  attachment §  337 

conspiracy;   instances §  338 

fraud  and  deceit ;  instances §  339 

trover  and  conversion §  340 

replevin;  claim  and  delivery §  341 

ACTIONS  IN  EQUITY, 

see  names  of  various  actions.     See  Equity. 

ADEQUATE  REMEDY, 

at  law;  equity  jurisdiction §§  163,  164 

at  law;  waiver  of  defense  of §  165 

See  Equity;   Mandamua;   Prohibition. 


INDEX  739 

ADJUSTMENT, 

of  damage  claims;  time  for,  limited  by  statute §  30 

See  Claims. 

ADMINISTRATIVE  DUTIES, 

and  legislative  power;  distinctions §  92 

ADMINISTRATOR, 

selection  of,  to  obtain  citizenship  for  jurisdiction note,  §  191 

ADMIRALTY, 

consignee  may  sue  in  court  of §  244 

enforcement  of  new  rights  of  action  given  by  State  statute;  action 

by  Federal  Courts §  402 

ADMIRALTY  COURT, 

prohibition  to §  400 

ADULTERATION, 

of  articles;  regulation  and  control  of §  18 

AGENCIES, 

of  Federal  Government §§  65,  66 

of  P^ederal  Government;  taxation §§  65-79 

See  Agents. 

AGENTS, 

for  service  of  process;  foreign  corporations  may  be  put  on  same 

footing  as  domestic  corporations §  14 

and  officers  of  banks;  criminal  offenses;  power  of  State  as  to.  .  .  .      §  66 

action  against,  by  corporation;  effect  of  dissolution note,   §  240 

personal  liability  of §  261 

when  replevin  does  not  lie  against §  341 

See  Embezzlement;  Principal  and  Agent. 

AGREEMENT, 

to  pay  corporate  debts ;  enforcement  of §  239 

See  Contract;  Subscription. 

AGRICULTURE.    See  Secretary  of  Agriculture. 

ALDERMAN, 

power  to  fix  water  rates §  95 

ALIEN  IMMIGRATION  ACT, 

contagious  diseases;  penalties  against  corporations §10(1 

ALLEGATIONS.     See  Pleading. 


740  INDEX 

AMENDMENTS.     See  Constitution. 

AMOUNT, 

jurisdistional.     See  Jurisdiction. 

ANCILLARY  ACTION, 

to  enforce  liability  of  nonresident  stockholder §  286 

ANSWER.     See  Pleading. 

ANTI-TRUST  ACT, 

liberty  to  contract §11 

when  corporation  and  not  stockholders  should  sue  under §  273 

equity  cannot  adjudge  forfeiture  under §  403 

construction  of;  intent  of §  451 

what  prohibitions  of  embrace §  451 

State  jurisdiction  over  violation  of,  where  agreement  made  out  of 

State i  ■ . §  455 

APPEAL, 

right  of,  given  to  court  or  judge  when  municipal  authorities  fail 

to  exercise  power  does  not  make  such  exercise  a  judicial  function  §  5 
from  railroad  commissioners'  action  when  statute  or  method  as  to 

elimination  of  grade  crossings  is  unconstitutional §  24 

defense  of  res  adjudicata  not  available  on  motion  to  dismiss §  83 

from  decision  of  State  board  of  control  adjudicating  water  rights  §  93 

from  action  of  railroad  commissioners  or  municipal  board §  139 

from  rulings  and  orders  of  corporation  commission §§  140,  141 

from  railway  commissioners  lies  in  England  to  Superior  Court 

on  questions  of  law §  141 

on  question  of  railroad  rates,  to  State  Supreme  Court  before 

suing  in  Federal  Court §  152 

by  Public  Service  Commission;  rights  of §  154 

Federal  Supreme  Court;  fundamental  question,  jurisdiction §  157 

taken  after  1891  to  Federal  Supreme  Court §  159 

in  mandamus §  381 

APPEALS, 

courts  of.     See  Courts. 

APPEARANCE, 

voluntary  or  service  of  process  as  essential  to  jurisdiction §  88 

as  waiver  of  objection  to  jurisdiction §  201 

effect  of;  jurisdiction note,  §  201 

APPROVAL, 

goods  sent  on;  negligence;  action  by  consignor note,   §  243 

ARBITRATE, 

pt)wer  to  sue  and  be  sued  includes  power  to §  231 


INDEX  741 

ARTICLES  OF  INCORPORATION, 

have  effect  of  charter note,   §  223 

mandamus  to  compel  fiHng §  358 

Sec  Colli  (icutes. 

ASSAULT, 

and   battery  by  company's  servant;  jurisdiction  of   New   York 

municipal  court note,     §  89 

on  passenger;  jurisdiction  over  action  of   New  York  municipal 

court note,     §  89 

liability  of  corporation  for  acts  of  servant note,  §  317 

and  battery;  trespass  lies  against  corporation  for §  328 

ASSESSMENT, 

legislative  contract  of  immunity  from;  power  to  transfer §  23 

of  special  franchise  tax;  certiorari  to  review §  124 

See  Taxation. 

ASSESSMENT  BOARDS, 

duty  as  to  valuation;  valuation  of  railroad  property §  94 

jurisdiction  or  powers  of §  94 

See  Taxation. 

ASSETS, 

right  of  stockholders  to  sue  in  equity  in  a  Federal  Court  for  surplus 
assets  after  a  decree  of  forfeiture  of  franchises §  269 

when  unpaid  subscriptions  or  unpaid  stock  are  and  are  not  as- 
sets     §  280 

etc.,  overvalued  in  prospectus;  fraud  and  deceit §  339  and  note 

ASSIGNEE, 

of  savings  bank  book;  action  against  bank;  jurisdiction  of  New 

York  municipal  court note,     §  89 

claiming  lien  for  storage;  jurisdiction  of  New  Y'ork  municipal 

court note,     §  89 

of  chose  in  action;  suit  by;  when  Federal  Courts  no  jurisdiction.  .    §  189 
of  chose  in  action;  suit  by;  jurisdiction  of  Federal  Courts;  inquiry 

relates  to  time  when  suit  is  brought §  190 

of  promissory  note  or  chose  in  action;  suits  by;  jurisdiction  Federal 

Court;  exceptions  to;  statutory  prohibition §  191 

when  Federal  Courts  have  jurisdiction  of  suits  by §  192 

of  contract  to  convey  land;  when  Federal  Court  no  jurisdiction  §  193 
suit  by;  assignment  collusive  or  fraudulent  to  give  jurisdiction 

§§  194,  195 
subject  to  defense  of  failure  of  foreign  corporation  to  pay  license 

fee note,   §  23fi 

for  creditors;  action  by  for  unpaid  subscriptions §  289 


742  INDEX 

ASSIGNEE— Continued : 

of  purchaser  of  stock  induced  to  purchase  same  by  false  state- 
ments; right  of  assignee  to  sue §  339 

of  bankrupt;  reformation  of  contract  of  pledge  may  be  decreed 
against §  404 

of  interest  of  assured;  parties  to  suit  for  reformation  of  insurance 
policy §  404 

ASSIGNMENT, 

eKemption  of  immunity  from  exercise  of  governmental  power  not 

assignable ;    unless §  23 

of  claim  for  damages  not  connected  with  corporation's  purposes 

note,  §223 
See  Assignee. 

ASSUMPSIT, 

to  recover  on  fire  insurance  policy;  jurisdiction §  83 

money  had  and  received;  suit  against  promoters §  259 

when  does  not  lie  to  recover  value  of  oil  mined §  321 

when  does  not  lie  to  recover  money  on  contract  where  considera- 
tion has  wholly  failed §  321 

for  money  had  and  received;  ultra  vires  contract §  321 

to  recover  withdrawal  value  of  stock §  321 

quantum  meriiit §  221 

corporation  liable  in,  for  work  and  labor  done  and  materials 

furnished §  321 

to  recover  back  money  paid §  321 

against  corporation §  321 

account  stated §  322 

account  stated ;  when  railroad  company  liable §  322 

by  and  against  banks §  323 

when  action  on  case  lies  concurrently  with §  333 

ATTACHMENT, 

suit  and  claim  for  damages;  jurisdiction §  81 

action  lies  against  corporation  for  wrongfully  suing  out  attachment  §  337 

ATTACHMENT  BOND, 

action  when  ex  contractu §  320 

ATTACHMENT  LIEN.     See  Liens. 

ATTORNEY, 

as  party  to  suit  to  establish  railroad  lease §  250 

fees  of;  statutes  providing  for  recovery  of,  against  railroads §  30 

ATTORNEY-GENERAL, 

pendency  of  proceedings  to  dissolve  as  bar  to  action  by;  exclusive 

jurisdiction §  81 


INDEX  743 

ATTORNEY-GENERAL— Continued : 

.State  has  no  power  to  impart  to  its  officer  immunity  from  responsi- 
bility to  supreme  authority  of  United  States §  155 

suit  against  not  suit  against  State note,   §  155 

of  State  is  proper  party  defendant  to  suit  to  prevent  enforcement 

of  unconstitutional  statute §  155 

and  abutting  owners;  parties  to  restrain  construction  street  rail- 
way     §  251 

intent  of  Congress  in  authorizing  suit  in  equity  in  name  of  United 

States  against  Union  Pacific  Railroad  Co §  252 

action  by,  against  directors  for  misconduct;  New  York  Code  Civil 

Procedure §  261 

party  to  mandamus §  377 

as  party ;  quo  warranto §  390 

as  party;  injunction;  nuisances §  432 

AUCTION, 

sale  at,  of  corporate  property;  no  suit  by  single  stockholder  to 

set  aside §  268 

AUDITOR, 

as  attorney  in  fact  to  accept  process §  14 

See  State  Auditor. 

AUTOMATIC  COUPLERS, 

requirement  for  use  of,  to  protect  employes §  27 

AVERMENTS.     See  Pleading. 

AWARD, 

in  condemnation  proceedings;  waiver §  127 

B 

BAGGAGE, 

loss  of,  jurisdiction  of  suit §  81 

statutory  double  damages  for  loss  of §  314 

BAILEE, 

a  consignor  may  sue  corporation §  243 

BAILMENT, 

when  action  is  for  trover  and  not  for  breach  of  contract  of .  .   note,   §  340 

BANKING  CORPORATION, 

effect  of  proceedings  to  wind  up;  judgment  against §  239 

no  power  to  contract  after  charter  forfeited §  239 

BANK  NOTES, 

securities,  etc.;  stock  for  loans  to  United  States;  taxation §  73 


744  INDEX 

BANKRUPT, 

reformation  of  contract  of  pledge  may  be  decreed  against §  404 

BANKRUPTCY, 

whethei-  corporation  subject  to  adjudication  as  bankrupt,  not 
jurisdictional  question §  82 

BANKS, 

charter  may  limit  amount  of  tax §  GS 

dissolution  of;  definition  of;  jurisdiction  over  funds  applied §  81 

noncompliance  with  State  laws;  effect  of  Federal  jurisdiction 

note,  §  198 

going  into  voluntary  liquidation;  effect  of §  240 

borrower  from,  estopped  to  deny  legal  corporate  existence §  248 

United  States   party  plaintiff  in  suit  against;  pension  check; 

forgery §  252 

right  of  United  States  to  recover  from;  forgery  of  payee's  name 

on  pension  check §  252 

United  States  may  bring  action  against  to  recover  taxes §  252 

as  parties  generally §  257 

who  should  sue  to  enforce  individual  liability  of  stockholders  of .  .  §  285 

nonresident  stockholder  of;  suit  against §  286 

assumpsit  by  and  against §  323 

when  liable  for  conversion  of  bonds §  340 

See  National  Banks;  Savings  Banks. 

BAR, 

when  limitation  in  insurance  policy  as  to  time  of  bringing  suit  is 

not  a §  83 

See  Judgment. 

BATTERY.     See  Assault. 
BILL.     See  Equity. 

BILLS  OF  EXCEPTIONS, 

jurisdiction  of  Circuit  Court  of  Appeals  by  writs  of  error  on,  note,  §  198 

BILLS  OF  LADING, 

foreign  commerce  carried  on  through,  not  exempt  from  Interstate 
Commerce  Act §  44 

BOARD  OF  ALDERMEN.     See  Alderman. 

BOARD  OF  EQUALIZATION, 

cannot  assess  franchises  granted  by  United  States §  75 

of  taxes;  jurisdiction §81 

action  against  to  enjoin  certification  of  assessed  value  of  property; 

jurisdiction §  81 


INDEX  745 

BOARD  OF  EQUALTZATION--("ontinued: 

piococdings  before  are  quasi  judicial §  123 

when  order  by  cannot  b(!  resisted  in  action  at  law §  123 

when  order  by  not  open  to  dispute  in  Federal  Supreme  Court §  123 

conclusiveness  of  decisions  of;  review  by  courts §  123 

when  overvaluation  by  no  defense  at  law §  123 

BOARD  OF  ESTIMATE  AND  APPORTIONMENT, 

control  of  Iwrough  president;  discretion  as  to  repaying  streets.  .      §  96 

BOARD  OF  EXAMINERS, 

examination  of  employes  as  to  colors;  railroads §  27 

examination   and   licensing   locomotive   engineers;   statute   may 

provide  for §  27 

BOARD  OF  TRUSTEES, 

not  a  corporation  for  jurisdictional  purposes §  177 

BOARDS, 

administrative  power  of  court  to  restrain  unlawful  exercise  of 

authority §  5 

See  name  of. 

BONDHOLDERS, 

under  mortgage  as  party  plaintiff  to  bill  in  equity  where  railroad 

sought  to  be  taxed §  83 

suit  by,  to  compel  delivery  of  bonds  of  reorganized  corporation . .    §  255 
See  Junior  Bondholders. 

BONDS, 

of  United  States;  savings  banks;  taxation §§  72,  73 

and  stocks;  issue  of;  jurisdiction  of  Public  Service  Commission.  .  §  117 

equity  jurisdiction  to  cancel  guaranty  of §  162 

consideration  for  issue  of;  New  York  statute note,  §  2!»3 

when  bank  liable  for  conversion  of §  340 

with  trust  company;  demand  and  refusal  necessary  to  charge 

conversion  §  340 

" BONUS " STOCK, 

liability  of  stockholders §§  291,  292 

BOOK  ACCOUNT, 

action  of §  326 

BOOKS, 

mandamus  to  compel  inspection  of;  jurisdiction  defined  and  ap- 
plied        §  S3 

production  of,  u.se  of  proce,ss  of  Federal  Court  in  aiil  of  inquiries 

before  comniJHsion §  137 


746  INDEX 

BOOKS— Continued: 

outside  of  State;  notice  to  corporation  to  produce,  before  grand 

jury;  contempt §  138 

production  of,  by  corporation,  before  grand  jury;  power  to  compel ; 

notice;  courts;  contempt §  138 

mandamus  to  compel  inspection §  362 

mandamus  to  compel  surrender  of §  363 

right  to  inspect;  penalties  for  refusal  to  allow §  442 

BOOM, 

inspection  of  logs  running  out  of §  59 

surveyor  general  may  l)e  required  to  survey  all  logs  running  out 

of  booms §  93 

BOROUGH  COUNCIL, 

authority  to  consent  to  location  of  street  railway  is  legislative 

not  judicial §  93 

BOROUGH  PRESIDENT, 

power  of,  as  to  repaving  street §  96 

BORROWER, 

from  bank  estopped  to  deny  legal  corporate  existence §  248 

BRAKEMAN, 

action  by,  for  personal  injuries;  review  by  Federal  Supreme  Court 

of  judgment note,   §  208 

BRIDGE, 

over  navigable  waters;  power  of  State  over  until  Congress  acts 

note,       §  2 
railroad;   over  natural   water  course;  power  of  State  to  renew 

bridge  in  order  to  drain  lands §  24 

when  State  has  power  to  regulate  and  fix  tolls §  33 

power  of  Secretary  of  War  as  to §  56 

as  unreasonable  obstructions  to  navigation ;  removal  of  same ....      §  56 
interstate  bridges;  power  of  Congress  and  of  State  with  relation  to     §  56 

across  navigable  rivers;  may  be  taxed  by  either  State §  64 

and  bridge  companies;  taxation  of;  interstate  commerce §  64 

taxation  of  bridge  company  operating  over  navigable  waters ....      §  78 

destroyed  by  fire;  suit  for  damages;  parties  defendant note,   §  228 

as  nuisance;  jurisdiction  of  Federal  Supreme  Court §  402 

structure,  right  of  State  to  sue  in  equity  for  jurisdiction  to  remove 

as  obstruction  to  navigation §  404 

BRIDGE  TOLLS, 

defense  to  suit  for,  that  period  of  assent  to  exerci.se  franchise  has 
expired §  247 


INDEX  747 

BURIAL, 

fieehold  right  in  soil  where  dead  buried;  trespass  Ues  against  per- 
son disturbing  grave §  330 

See  Cemetery. 

BUSINESS, 

slander  of,  Ijy  corporation;  is  liable |  335 

BY-LAWS, 

increasing  powers   of   officers   and   directors;   stockholders   have 

remedy  in  equity x  4Q2 

c 

CAB  SERVICE, 

maintained  by  railroad  is  not  interstate  commerce §  47 

CANCELLATION  AND  RESCISSION, 

suit  by  stockholder  to  set  aside  lease;  parties §  404 

See  Equitable  Remedies. 

CAPITAL  STOCK, 

taxation  of §§  61,  02  07 

of  interstate  bridges;  taxation  of §  (i4 

and  shares  in  stockholders'  hands  may  both  be  taxed §  77 

taxation  of  franchises  based  upon §  77 

increase  of ;  jurisdiction  of  Railroad  and  Warehouse  Commission  as 

to §  116 

prospectus  to  obtain  increase  of;  fraud  and  deceit note,  §  339 

prospectus  to  induce  subscriptions  to  or  sale  of;  fr:uul  and  deceit 

note,  §  33'J 

shares  of  not  recoverable  in  action  of  claim  and  delivery §  34 1 

•          certificate  of  stock  recoverable  in  replevin §  341  . 

subscription  for,  paid  in  full  by  transfer  of  land  in  good  faith; 

creditor  no  remedy  in  equity §  402 

when  equity  may  compel  corporation  to  deliver  certificates  of 

shares  of §  402 

See  Subscription. 

CAR  COMPANY.     See  Private  Car  Company. 

CARGO, 

injuries  to;  when  consignee  no  claim  against  vessel §  244 

CARRIERS.  See  names  of  the  different  kinds  of;  Common  Carriers; 
Constitutional  Basis  of  Actions  and  Defenses  (III);  Interstate 
Commerce. 

CASE, 

action  on  for  injury  to  property  by  railroad  company §  242 

See  Actions  Ex  Delicto;  Trespass  on  the  Case. 


748  INDEX 

"CASH  BEFORE  DELIVERY  LIST," 

libelous  letter  causing  person  to  be  placed  on §  335 

CASHIER, 

of  bank;  replevin  of  property  by;  bank  not  necessary  party §  257 

CATTLE, 

quarantine  and  inspection  regulations  as  to  transportation  of,  by 

interstate   railroads §  58 

action  to  recover  damages  for  infection  of;  quarantine  line  fixed 

by  Secretary  of  Agriculture note,     §  99 

collision  causing  loss  of;  liability  for  acts  of  servant note,   §  317 

CATTLE  CONTAGIOUS  DISEASE  ACT, 

confers  no  power  on  Secretary  of  Agriculture  to  regulate  intra- 
state commerce §  99 

CAUSES, 

removal  of  to  Federal  Courts ;  corporation  of  two  or  more  States .  .    §  179 
See  Removal. 

CEMETERY, 

disturbance  of  grave;  trespass  quare  clausum  f regit §  330 

public;  trespass  lies  for  disturbing,  etc.,  grave §  330 

CERTIFICATES, 

State  may  impose  upon  consolidated  companies  certain  charges 

after  filing  articles  of  consolidation §  60 

of  indebtedness  issued  by  United  States;  taxation §  73 

of  public  convenience  and  necessity;  decision  of  railroad  commis- 
sioners not  subject  of  judicial  inquiry §  142 

failure  of  foreign  manufacturing  corporation  to  obtain;  action  on 

fire  insurance  policy §  236 

to  railroad  corporation  not  prerequisite  to  right  to  bring  suit 

against §  246 

of  stock  may  be  replevied §  341 

mandamus  to  compel  filing §  358 

of  stock;  mandamus  to  compel  transfer;  lost  certificates §  364 

of  convenience  and  necessity;  right  of  another  railroad  company 

to  sue  in  equity §  404 

See  Articles  of  Incorporation;  Capital  Stock. 

CERTIORARI, 

to  board  of  equalization  under  claim  of  excess  of  jurisdiction; 

what  is  jiu'isdiction §  81 

to  county   supervisors;   assessable  value   of   railroad   property; 

jurisdiction §  81 

jurisdiction  acquired,  judgment  when  cannot  be  collaterally  im- 
peached on §  83 


INDEX  749 

CERTIORARI— Continued : 

to  review  assessment  of  special  franchise  tax §  124 

to  review  determination  of  Public  Service  Commission §  I.j4 

motion  to  quash  lies x  2^4 

CHANCERY.     See  Equity. 

CHANCERY  SYSTEM.     See  Courts;  Equity. 

CHARGES.     See  Rates. 

CHARTER, 

right  of  legislature  to  regulate  corporations  although  right  to 

appeal  or  amend  charter  is  not  reserved §  r 

of  railroads  is  subject  to  power  of  State  to  regulate  and  control ...     §  L'l 
power  of  State  to  alter,  amend  or  repeal  is  not  without  limitations     §  25 

power  to  amend  or  repeal ;  taxation §  6S 

of  bank  may  limit  amount  of  tax  on  shares  of  stock §  (iS 

stipulation  that  railroad  pay  State  percentage  of  gross  receipts .  .      §  76 

exemptions;  what  is  not  expressly  granted  is  reserved §  7'J 

failure  to  file;  State  statute;  noncompliance;  effect  on  Federal 

jurisdiction   note,   §  H)8 

articles  of  incorporation  have  effect  of note,    §  223 

forfeiture  of;  effect  on  right  to  sue  and  be  sued §§  23'J,  240 

of  street  railway  company;  State  only  can  raise  question  of  in- 
validity of §  24n 

remedy  of  creditor  not  affected  by  repeal  of §  27S 

defense  that  acts  of  trespass  were  done  under,  must  be  pleaded .  .    §  330 
mandamus  to  vacate  order  revoking  charter §  360 

CHECKS, 

when  not  within  principle  of  exemption  of  governmental  agencies 

from  taxation §  69 

See  Pension  Checks. 

CHILDREN, 

injured  by  acts  of  servant note,  §  317 

employment    of   when  imder    certain    age;  penalties;   criminal 
offenses §  449 

CHOSE  IN  ACTION, 

suit  by  assignee  of;  when  Federal  Courts  no  jurisdiction §  189 

suits  by  assignee;  jurisdiction  Federal  Courts;  inquiry  relates  to 

time  when  suit  is  brought §  190 

suits  by  assignee  of;  jurisdiction  Federal  Courts;  exceptions  to 

statutory  prohibition §  191 

CIRCUIT  COURT.     See  Courts. 


750  INDEX 

CIRCUIT  COURT  OF  APPEALS.     See  Courts. 

CITIZEN, 

when  corporation  is  and  is  not;  pleadings §  173 

when  action  lies  l)y,  against  water  company  to  recover  damages 

arising  from  negligence §  327 

CITIZENSHIP, 

diversity  of;  when  jurisdiction  of  Federal  Courts  exists §  S3 

averments  as  to note,  §  173 

of  members   of   corporation,   presumption  as   to;  president  and 

stockholders §  174 

joint-stock  company  not  a  corporation  for  jurisdictional  purposes  §  175 

hmited  partnership  not  a  corporation  for  jurisdictional  purposes  §  176 

board  of  trustees  not  a  corporation  for  jurisdictional  purposes  ...  §  177 
of  corporation  of  two  or  more  States;  ancillary  or  permissive 

charters  or  license §  178 

consolidated  corporations  §  ISO 

territory  divirled  into  two  States §  184 

of  guardian  in  suit  against  corporation §  185 

State  not  a  citizen;  diverse  citizenship §  186 

question  of,  in  suits  by  assignee;  jurisdiction  Federal  Courts  §§  190-195 
arrangement  between  parties  to  give  jurisdiction;  diverse  citizen- 
ship   §  196 

diversity  of;  petition  for  removal  not  showing note,  §  207 

diversity  of;  joint  actions;  removal  of  suit §  214 

CITROUS  FRUITS, 

joint  through  rates;  orders  of  Interstate  Commerce  Commission 

as    to...' §104 

CITY.     See  Municipalities. 

CITY  COUNCIL, 

jurisdiction  as  applied  to,  defined §  90 

delegation  to,  of  power  to  apportion  repairs  on  railroad  viaduct     §  93 
resolution   of,   and   direction   to   city   solicitor   to   enforce   same 
against  street  railway  company;  obligation  of  contract;  jurisdic- 
tion of  Federal  Circuit  Court §  126 

CITY  COURT.     See  Courts. 

CITY  SOLICITOR, 

direction  to  enforce  resolution  of  city  council  against  street  rail- 
way company;  jurisdiction  of  Federal  Circuit  Court §  125 

CIVIL  ACTION, 

penalty   against   corporation   for   bringing   in   aliens    with   con- 
tagious diseases  is  a  civil  offense §  100 

liability  for  extortionate  rates §  314 


INDEX  751 

"CIVIL"  JURISDICTION, 

defined;  "further  civil  and  oriniinul  jiu-i«(liction  "  defined §  89 

CLAIM  AND  DELIVERY, 

when  pledgor  may  regain  property  pledged,  by  claim  and  delivery  §  341 

CLAIMS, 

penalty   against   carrier   for   nonatljustment   of   claims   in    time 

limited   5  30 

statutes  providing  for  presentation  and  adjustment  of;  railroads     §  30 

CLASSIFICATION, 

statute  held  constitutional §  14 

See  Constitutional  Basis  of  Actions  and  Defenses;  Discrimination; 
Statutes. 

CLOUD  ON  TITLE, 

equity  jurisdiction  to  remove §  167 

See  Title. 

COAL, 

mining  and  transportation  of;  commodities  clause  of  Hepburn 

Act   §  49 

COAL  CAR  DISTRIBUTION, 

within  jurisdiction  of  Interstate  Commerce  Commission §  lOfia 

CODES, 

effect  of,  generally;  form  of  action §  313 

COLLATERAL  ATTACK, 

State  or  public  officials  as  parties;  dc  facto  corporation §  249 

State  or  public  officials  as  parties;  de  facto  corporation;  instances  §  249 
de  facto  corporation ;  estoppel  to  deny  legal  corporate  existence 

§§  247,  248 
when  judgment  not  subject  to  on  certiorari;  jurisdiction  acquired     §  83 
de  facto  corporation;  estoppel  to  deny  legal  corporate  existence.  .    §  247 
See  Defenses. 

COLLATERAL  SECURITY, 

liabiUty  of  pledgee  for  corporate  debts §  277 

COLLECTION, 

of  taxes;  equity  jurisdiction  to  restrain §§  164,  107 

COLLEGE, 

established  by  church;  right  to  sue note,  §  227 

COLLISION, 

causing  loss  of  cattle;  liability  for  acts  of  servant note,   §  317 


752  Index 

COLLUSIVE  ASSIGNMENT, 

to  give  jurisdiction  §§  194,  195 

COMBINATIONS, 

liberty  to  contract §11 

inlawful;  act  of  Congress  of  1890 note,  §  11 

of  insurance  companies  for  fixing  rates  of  premiums  may  be  pro- 
hibited    §  16 

relating  to  restraint  of  interstate  commerce §  46 

in  restraint  of  trade ;  crimes  and  penalties §  445 

what  are  and  are  not  illegal  under  Anti-trust  Act §  451 

unlawful.     See  Commerce;  Statutes. 

COMMENCEMENT  OF  ACTION.     See  Action. 

COMMERCE, 

power  of  State  over  bridges  over  navigable  waters note,       §  2 

power  of  Congress  to  regulate  as  affecting  laws  prohibiting  citi- 
zens from  entering  into  certain  private  contracts §  1 1 

act  of  Congress  of  1890  to  protect  against  monopolies,  etc.,  con- 
strued and  applied note,     §  1 1 

comprehends  navigation §  5(j 

and  navigation note,     §  56 

Congress  in  execution  of  powers  to  regulate  may  employ  corpo- 
rations as  instrumentalities §  92 

State  statute  construed  as  not  interfering  with;  review  by  Federal 

Supreme  Court §  208 

contract    of    interstate    shipment    construed;    Federal    Supreme 

Court  no  power  to  review §  209 

See  Interstate  Commerce;  Secretary  of  Commerce  and  Labor. 

COMMISSIONER  OF  GENERAL  LAND  OFFICE, 

jurisdiction  of  courts  over §  129 

COMMISSIONER  OF  WATERWORKS, 

power  to  contract  with  "  lowest  and  best "  bidder §  95 

COMMISSIONERS, 

delegation  to;  to  draft  form  of  standard  fire  policy;  unconstitu- 
tional        §  97 

COMMISSIONERS  OF  APPRAISAL, 

petition  by  railroad  company  for  appointment  of;  jurisdiction.  .      §  81 

COMMISSIONERS  OF  ELECTRICAL  SUBWAYS, 

salaries  and  expenses  of,  may  be  assessed  on  companies §  31 

State  may  require  maps,  plans,  etc.,  to  be  filed  with §  31 

COMMISSIONS, 

statute  providing  for  production  of  books  and  papers  includes 

note,       §  4 


INDEX  753 

COMMISSIONS— Cbnliimed : 

power  of  city  to  compel  railroads  to  lower  tunnels  to  conform 
with  the  necessities  of,  at  railroad's  expenBe §  2.5 

COMMODITIES, 

clause  of  Hepburn  Act;  construction  of §  49 

"COMMODITY," 

insurance  as;  combinations;  conspiracies;  when  and  when  not 

indictable  offenses x  ^^^ 

COMMON  CARRIERS, 

by  express;  right  to  establish  reasonable  delivery  limits  and  fix 
reasonable  tolls;  State  statute  affecting;  law  of  foreign  jurisdic- 
tion          g  2 

State  may  regulate  consolidation  of  such  corporations §  21 

provision   requiring  delivery  of  cars  to  connect  carriers;  when 

unconstitutional   j  23 

regulation  of  hours  of  labor  of,  by  Congress §  20 

criminal  offense  against  United  States;  discharge  of  employ^  of 

carrier  when  member  of  labor  organization §  26 

State  may  provide  for  protection  of  employes  of  railroads §  27 

statutory  provisions  as  to  automatic  couplers,  examination  of 

engineers,  examination  as  to  colors,  etc §  27 

Federal  statute  to  insure  humane  treatment  of  live  stock  by §  2S 

right  of  recovery  against,  by  employes  or  person  not  passenger; 

railway  postal  clerks §  2U 

right  of  State  to  augment  or  limit  liability  of §  29 

of  electricity;  regulation  and  control  of §  31 

rate  regulations §  32 

cannot  unreasonably  discriminate;  rates §  32 

effect  and  purpose  of,  as  to  rates  of  Elkins  and  Hepburn  Acts. .  .  §  32 
State  cannot  grant  away  its  right  to  regulate  rates,  except,  etc. .  .  §  32 
constitutional  limitations  upon  power  of  legislature  over  rates.   §§  33,  34 

connecting  carriers;  rates;  terminal  charges §  35 

proceeding  by  shipper  where  terminal  charges  reasonable  but 

aggregate  charges  excessive §  35 

duty  of  connecting  carrier  on  joint  through  rate  to  accept  cars 

from  initial  carrier §  35 

engaged  in  interstate  commerce  subject  to  regulation  by  Congress  §  47 
transportation  of  coal;  effect  of  commodities  clause  of  Hepburn 

Act §  49 

exclusion    of    intoxicating    liquors    from    State;    nonliability   of 

carrier;  interstate  shipments §  52 

exclusion  of  intoxicating  liquors  by  State;  interstate  commerce; 

"arrival";  original  package;  Wilson  Act §§  53,  51 

discriminatory  regulations  within  jurisdiction  of  Interstate  Com- 
merce Commission §  lOGa 

48 


754  INDEX 

COMMON  CARRIERS— Continued: 

compensation  for  services  rendered  at  shipper's  request;  Iitcr- 

state  Commerce  Commission §  135 

regulation    of,    as    to    cars;    Interstate    Commerce    Commission; 

where  redress  must  first  be  sought;  courts §  135a 

refusal  to  receive  goods  tendered  for  shipment;  suit  based  on 

such  refusal  is  under  the  common  law,  is  in  personam §  136 

where  State  engaged  as §  171 

suit  against,  by  consignor §  243 

when  mandamus  lies  against,  generally §  366 

when  liable  as  party  to  joint  rate;  rebates;  Elkins  Act §  452 

regulation  of;  Elkins  Act;  liquor  laws;  excessive  fines §  456 

See  the  names  of  different  kinds  of.  See  Constitutional  Basis  of 
Actions  and  Defenses;  IJiscrimination;  Interstate  Commerce 
Commission;  Limitation  of  Liability;  Public  Service  Commis- 
sion; Railroad  Commission;  Rebates. 

COMMON  LAW, 

principles  of,  how  far  operative  upon  all  commercial  transactions.  §  46 

no  body  of  Federal,  distinct  from  that  of  State,  etc §  46 

extent  of  resort  to;  jurisdiction  national  courts §  197 

power  of  State  Courts  to  administer §  199 

right  to  sue  and  be  sued  included  in  implied  power  of  corporation.  .  §  227 

liability  of  stockholders  for  unpaid  subscriptions §  288 

enforcement  of  new  law  of  action  given  by  statutes  of  State,  by 

Federal  Courts §  402 

COMMON-LAW  ACTION, 

must  be  brought  for  repayment  of  excessive  charges  by  carrier.  .    §  150 

COMMON-LAW  REMEDY, 

United  States  may  adopt  in  suit  t«  recover  taxes  from  bank §  252 

COMPENSATION.     See  Witness. 

COMPETITION, 

contracts  to  prevent;  remedy  in  equity §  436 

COMPLAINANT.     See  Parties. 

COMPLAINTS, 

before  Interstate  Commerce  Commission;  extent  of  its  jurisdic- 
tion as  to §  103 

See  Petition;  Pleading. 

COMPRESS  AND  WAREHOUSE, 

lease  fixing  rates;  when  party  no  such  interest  as  to  invoke  aid 
of  equity §  '104 


INDEX  755 

CONCURRENT  JURISDICTION, 

defined §  86 

CONDEMNATION, 

proceedinga;   jurisdiction §  81 

of  water;  petition  for;  jurisdiction  in  "special  cases" §  87 

law  of  State  enforced  in  Federal  Circuit  Court §  172 

proceedings  carried  to  State  Court;  removal  of  suit  to  Federal 

Court §  1 27 

proceedings;  waiver  of  award  in §  127 

proceedings  to  condemn  land  for  railroad  branches;  jurisdiction 

of  State  Crossing  Board §  127 

Sec  Eminent  Domain. 

CONDITIONS  PRECEDENT, 

regulation  of  foreign  corporations §16 

as  to  right  of  foreign  corporations  doing  business  in  State  and 

limitations  upon  rule §  20 

consent  of  municipal  authorities  to  construction  of  telegraph  lines.     §  96 

consent  to  extension  of  telegraph  lines §  96 

to  suit  by  creditor  or  stockholder;  demand  and  refusal;  exhaust- 
ing remedies §§  301-312 

to  suit;  when  demand  upon  corporate  authorities  and  their  re- 
fusal to  act  is §§  302,  303 

effect  of  demand  and  refusal  dependent  upon  circumstances; 

discretion  of  directors;  simulated  demand §  304 

to  suit;  stockholder's  liability;  judgment  and  execution  returned 

unsatisfied §§  307,  308 

dissolution  as,  to  enforcing  stockholder's  liability §  309 

effect  of  Equity  Rule  94;  when  demand  upon  directors  for  relief  is 
and  is  not  condition  precedent;  stockholder's  right  to  protect 

corporation  when  directory  derelict §  310 

enforcing   stockholder's   liability;   exhuasting   remedies   against 
corporation;  when  judgment  and  execution  unsatisfied  are  not 

conditions  precedent §  308 

judgment  creditor's  right  to  sue;  parties §  311 

exhausting  remedies  against  stockholders;  statute  of  limitations.   §  312 
order  of  court  requiring  remedies  against  stockholders  to  be  ex- 
hausted ;  statute  limitations §312 

demand  and  refusal ;  conversion  of  property §  340 

necessity  of  demand  or  notice  to  party  before  bringing  mandamus.  §  379 

seeking  other  relief  as,  to  granting  quo  warranto §  392 

to  prohibition;  exhausting  remedies §  397 

to  suit;  exhausting  remedies;  effort  to  secure  action  by  corporate 

authorities §  404 

what  are  not,  to  suit  to  quiet  title §  405 

application  to  municipal  body  as,  to  equity  suit §  408 

See  Equity  Rule  94. 


756  INDEX 

CONGRESS, 

constitutional  law  of,  and  Federal  Constitution  supreme  law  of 

land ■  §  2 

State  has  plenary  power  over  bridges  and  navigable  waters  until 

Congress  acts note,  §  2 

revisory  power  over  Territories §  3 

nature  of  powers  delegated  to §  3 

power  of,  under  Constitution,  to  legislate  is  measure  of  validity 

of  such  legislature §  4 

has  revisory  power  over  Territory  and  legislation §  5 

no  grant  to,  of  police  power  under  Constitution §  7 

when  police  power  must  yield  to §  8 

purpose  of  vesting  power  to  regulate  commerce  in  Congress.  ...  §  11 
power  of,  to  regulate  commerce  cannot  be  impaired  by  State 

regulation  as  to  foreign  corporations §  20 

has  plenary  power  to  regulate  interstate  commerce §  26 

power  of,  over  carriers  of  interstate  commerce §  26 

power  of,  to  regulate  hours  of  labor §  26 

power  of,  to  regulate  hours  of  labor  of  employes  of  carriers §  26 

when  may  provide  for  recovery  of  damages §  30 

intention  of,  in  passing  Elkins  Act §  32 

power  of,  over  interstate  transportation  embraces  all  manner  of 

carriage,  gratuitous  or  otherwise §  32 

power  of,  to  regulate  commerce §§  42  e«  seq. 

power  of,  to  remove  bridges  over  navigable  waters §  56 

power  of,  to  remove  obstructions  to  navigable  waters §  56 

control  of  navigable  waters §  56 

franchises  or  privileges  conferred  by;  taxation §  75 

in  execution  of  power  to  regulate  commerce,  may  employ  cor- 
porations   §  "^" 

may  provide  penalties  and  empower  executive  officers  to  en- 
force    §  100 

judicial  notice;  corporation  incorporated  by  act  of note,  §  211 

corporation  created  by;  removal  of  suits;  Constitution  and  laws 

of  United  States;  separable  controversy §  211 

corporations  created  by;  removal  of  suits;  national  banks §  212 

See  Statutes. 

CONSENT, 

of  parties  as  conferring  jurisdiction §§  200,  201 

CONSIDERATION, 

stock  received  without;  liability  of  stockholder §§  291,  292 

for  issue  of  stock  and  bonds;  statute  in  New  York note,  §  293 

for  issue   of  stock;   property,   etc.;  when   payment  in  stock   to 

contractor  is  not  a  stock  subscription §  293 

for  stock  in  payment  of  property;  presumption  as  to §  294 

See  Contracts. 


INDEX  757 

CONSIGNEE, 

railroad  cars  on  track  when  delivery  not  completed;  protection 

of  Interstate  Commerce  Act §  47 

delivery  of  intoxicating  liquors;  prohibition  by  State;  interstate 

shipment §  52 

interstate  shipment;  delivery  when  complete §  52 

of  goods;  presumption  as  to  ownership  of §  243 

suits  by  and  against §  244 

may  be  charged  with  violating  Elkins  law §  244 

suit  to  recover  penalties §  440 

CONSIGNOR, 

right  of,  to  sue  corporation §  243 

CONSOLIDATED  CORPORATIONS, 

citizenship  of §  igQ 

CONSOLIDATION, 

of  parallel  railroad  lines  forbidden  by  Constitution;  police  power 

note,     §  10 

of  common  carriers  corporation;  State  may  regulate §21 

of  corporations  and  effect  of,  as  to  exemption  from  change  of 

rates §  39 

State  may  impose  upon  consolidated  companies  certain  charges 

for  filing  articles  of  consolidation §  GO 

of  corporations;  effect  as  to  exemption  from  taxation §  79 

whether  parallel  and  competing  railroads  may  consolidate;  State 

may  determine §  107 

to  prevent  competition;  fraud  on  public;  injunction  refused    .    .    §  234 

successor  of  corporation;  rights  of §  235 

of  corporations;  suits  by  and  rights  of  minority  stockholders   .  .  ,    §  267 
agreement;  suits  by  and  rights  of  minority  stockholders  creating 

new  corporation §  2G7 

CONSPIRACY, 

instances §  338 

action  for,  not  sustained  against  theatrical  syndicate §  338 

action   for,    against   railroad    company   to   expel   plaintiff   from 

brotherhood  of  locomotive  engineers §  338 

extraterritorial  effect §  455 

and  combinations;  insurance  as  " commodity" §  448 

combinations;  when  and  when  not  indictable  offenses §  448 

CONSTITUTIONAL  BASIS   OF  ACTIONS  AND  DEFENSES, 

I.  Preliminary  statement §  1 

II.  Fundamental  government  powers: 

A.  Constitution  and  laws  of  Unitetl  States  supreme  law  of 

land §  2 


758  INDEX 

CONSTITUTIONAL  BASIS  OF  ACTIONS  AND  DEFENSES— Con- 
tinued: 
constitutional  law  of  United  States;  States  not  empowered 

to  retard,  etc.,  operation  of §  2 

powers    of  Federal  and  State   governments    distinguished; 

Territories §  3 

Federal  Constitution;  that  which  is  implied  is  as  much  a 

part  of  as  that  which  is  expressed §  3 

first   eight   articles   of   Federal,    have   reference   to   Federal 

governmental  powers §  3 

purpose  of  Tenth  Amendment  to  Federal  Constitution.  ...        §  3 

of  United  States;  what  powers  reserved  to  States note,       §  3 

of  State  are  limitations  and  not  grant  of  power §  3 

legislative  power  of  States,  sovereign  in  all  matters  not  for- 
bidden by  Federal  law §  3 

right  of  Congress  to  legislate,  sole  measure  by  which  validity 

of  legislature  to  be  determined §  4 

judicial  and  legislative  powers §§  4,  5 

of  United  States  does  not  prevent  uniting  legislative  and 

judicial  power  in  same  body §  4 

of  United  States  does  not  prohibit  State  from  conferring 

upon  nonjudicial  bodies  judicial  functions §  4 

of  State;  eminent  domain  when  court  cannot  cure  constitu- 
tional defect  by  judgment §  5 

III.  Regulation  and  control  of  corporations: 

A.  Legislature  may  delegate  execution  of  power  to  admin- 
istrative body §  5 

where  legislature  has  not  delegated  same  power  to,  cannot 

be  exercised  by  courts §  5 

power  of,  as  to  operation  of  railroads  is  legislative  in  char- 
acter          §  5 

power  of,  generally §  6 

corporation  subject  to  reasonable  regulations §  6 

power  to  regulate  corporations  where  right  to  appeal  or  to 

amend  charter  is  not  re.served §  6 

Federal  Constitution;  State  legislation  regulating  corpora- 
tions; equal  protection  laws §  6 

police  power;  general  principles  as  to  extent  of §  7 

no  grant  to  Congress  of  police  power  under  Constitution.  .  .        §  7 

police  power;  Umitations §§  8,  9 

of  United  States;  obligation  of  contracts;  effect  as  to  police 

power  §  9 

of  United   States;   Fourteenth   Amendment  does  not  limit 

subject  of  exercise  of  police  power §  9 

of  United  States;  police  power;  due  process  of  law §  9 

police  power;  legislative  discretion;  interference  of  courts.  .      §  10 
liberty  to  contract;  interstate  commerce;  police  power;  Anti- 
trust Act;  combinations §  11 


INDEX  759 

CONSTITUTIONAL  BASIS  OF  ACTIONS  AND  DEFENSES-Con- 

tinued: 
liberty  to  ccntract;  police  power;  sales  on  margins;  limita- 
tion of  liability;  mechanics'  liens;  insurance J  12 

classification  statutes;  Fourteenth  Amendment §§13   14 

regulation  and  control  of  slaughter  houses  and  stock  yards   .      §  15 

regulation  and  control;  insurance  companies §§10   17 

ship  passenger  laws j  Ij^ 

patent  rights x  jg 

of  water  companies j  j  j^ 

hours  of  labor xjg 

of   mines »  lg 

of  adulteration j  lg 

of  foreign  corporations;  conditions  precedent  to  doing  busi- 
ness       5  19 

foreign  corporations;  when  not  bound  by  unconstitutional 

statute J  20 

foreign  corporations;  rule  as  to  powers  of  State  and  limita- 
tions  thereon §  20 

foreign  corporations  not  precluded   from  foreclosing  mort- 
gages because  of  noncompliance  with  statutory  conditions 

precedent §  20 

transportation   companies;   railroads;   street   railroads;   ex- 
press companies §  21 

of  transportation  companies §  21 

power  cannot  be  so  arbitrarily  exercised  as  to  infringe  upon 

Federal  Constitution §  21 

railroad  charter  taken  subject  to  regulation  and  control  by 

State §  21 

railroads;  obligation  of  contract;  due  process  of  law §  22 

railroads;   obligation   of   contract;   exemption  and   transfer 

thereof ;  due  process  of  law §  23 

State    statutes;    railroad    crossings;    viaducts   and    bridges; 
expense  of  change  of  grade,  or  removal;  police  power; 

nonjudicial  question §  24 

State  statutes;   railroads   tunnels,   viaducts  and    crossings; 

expense  of  removal  or  repairs;  vestetl  rights §  25 

State  has  power  to  change  relations  of  master  and  servant .  .      §  26 
Federal  and  State  regulations  as  to  employers  and  employ<?s, 

carriers,  etc.;  police  power;  interstate  commerce §§  26,  27 

Federal  statute  to  insure  humane  treatment  of  live  stock 

by  carriers §  28 

right  of  State  to  augment  or  limit  carriers'  liability §  29 

State  statutes  providing  for  damages;  presentation  and  ad- 
justment of  claims;  penalty;  carriers;  railroads §  30 

interstate  commerce;  common  carriers  liable  for  loss  owing 

to  negligence;  statutes §  30 

telegraph  and  telephone  companies;  electrical  sul»ways  §  ;U 


760  INDEX 

CONSTITUTIONAL  BASIS  OF  ACTIONS  AND  DEFENSES— Con- 
tinued: 
constitution  and  laws  of  State  may  impose  rental  charge  on 

telegraph,  etc.,  companies  for  use  of  streets §  31 

of  railroads  by  State §  107 

State  has  inherent  power  to  control  public  service  corpora- 
tions      §  108 

constitutional    law   provision   as    to   stockholder's    liability 

§§  282,  284 
constitutional   law  provision;  stockholder's  liability  under 

held  contractual §  288 

of  carriers;  constitutional  law;  Elkins  Act;  excessive  fines.  .    §  456 
See  names  of  the  different  corporations. 
IV.  Rate  regulation: 

A.  Gas  rate  statute  establishing  different  rates  for  city  and 

for  individuals  held  constitutional §  14 

of  premiums;  iiLsurance  companies  may  be  prohibited  from 

combining  to  fix §  16 

is  legislative  function §  32 

common    carriers;     railroads;    express    companies;    police 

power;  interstate  commerce §  32 

requirement  of  publication  of  schedules  of  rates §  32 

express  companies  required  by  Hepburn  Act  to  pubHsh  rates.     §  32 
Elkins  Act  authorizes  injunction  for  departure  from  pub- 
lished rates §  32 

of  common  carriers'  rates §  32 

State  cannot  grant  away  its  right  to  regulate  rates §  32 

of  railroad  rates ' §  32 

of  express  companies'  rates §  32 

of  rates;  effect  as  to  interstate  commerce §  32 

of  rates ;  police  power §  32 

power   of   State   as   to   regulation   of   rates;   constitutional 

limitations  upon §  33 

rates  of  public  service  corporations §  33 

when  State  may  regulate  ferries  and  bridges  and  fix  tolls .  .      §  33 

constitutional  limitations;  ferries;  bridges §  33 

limitation  as  to  reasonableness  of  rates §  34 

same  subject;  terminal  charges  by  carrier;  proceedings  against 

connecting  carrier;  discrimination;  joint  through  rate.  .  .      §  35 
legislature   may  compel  carrier  to  perform  certain  duties 

though  it  may  entail  loss §  34 

State  cannot  fix  rates  so  as  to  prevent  carrier  earning  fair 

compensation  for  carriage §  34 

legislative  act  fixing  rates  will  not  be  held  invalid  imless ....     §  34 
rate  regulation;  whether  rate  fixed  is  reasonable,  depends 

upon  circumstances §  34 

rates  fixed  by  State  should  be  reasonable  and  not  confiscatory     §  34 
rate  regulation;  limitations  as  to  reasonableness  of  rates.  .  .      §  34 


INDEX  761 

CONSTITUTIONAL  BASIS  OF  ACTIONS  AND  DEFENSES— Con- 
tinued : 

connecting  carriers;  rates;  terminal  charges §  35 

Hepburn    Act;    proceedings    against    connecting    carriers; 

terminal   charges §35 

rates;  carrier  entitled  to  finding  that  charges  unreasonable 

before  required  to  change §  35 

wharfage  held  governed  by  State  laws  and  remedy  in  legis- 
lature where  rates  as  fixed  are  unreasonable §  35 

elements  in  fixing;  franchises  an  element;  "good  will";  gas 

rates  §  3G 

injunction  dismissed   where  suit   brought   before  rate  took 

effect  under  statute §  30 

in  fixing  reasonableness  of  rates,  value  of  property  should  be 

fixed  as  it  was  at  time  inquiry  was  made §  36 

rates  must  be  prescribed  with  regard  to  interests  of  carrier 

and  of  the  public §  36 

water  rates  may  be  regulated §  37 

water  rates;  right  of  State  to  bargain  away  power  to  regu- 
late        §  37 

regulation  of  gas  companies'  rates §  38 

exemption  and  transfer  thereof;  obligation  of  contract;  con- 
solidated companies;  combinations  as  to  rates §  39 

long  and  short  hauls;  interstate  commerce §§  40,  41 

powers  of  State  as  to §  76 

delegation  to  municipality  of  power  to  regulate §  93 

power  of  supervisors,  aldermen,  or  other  legislative  bodies 

of  cities,  towns,  etc.,  to  fix  water  rates §  95 

Interstate    Commerce    Commission   no   power   to   prescribe 

rates  maximum,  minimum  or  absolute §  106 

what  factors  should  be  considered  by  Interstate  Commerce 

Commission §  ^^^ 

neither  courts  nor  Interstate  Commerce  Commission  can  fix 

maximum  rates note,  §  106 

Interstate  Commerce  Commission;  promulgation  of  general 

orders ^ §  106 

competition  a  factor §  1^6 

railroad  and  like  commissions §§  107,  108 

and  enforcement  of  rates;  jurisdiction  of  railroad  commis- 
sion      §  113 

when  railroad  commission  is  without  jurisdiction;  rates.  ...    §  115 

of  telegraph  companies  by  railroad  commission §  122 

jurisdiction  of  Federal  Courts  as  to;  Interstate  Commerce 

Commission §§  132-134 

Interstate  Commerce  Commission  has  original  and  exclusive 

jurisdiction  over §  1'^'^ 

Interstate   Commerce   Commission;    review    of    findings    by 

court;  reasonableness  of  rates  a  question  of  fart  §  133 


762  INDEX 

CONSTITUTIONAL  BASIS  OF  ACTIONS  AND  DEFENSES— Con- 
tinued : 
redress  against  unlawful;  where  redress  must  first  be  sought; 

Interstate  Commerce  Commission §  134 

where  relief  from,  must  first  be  sought;  courts  or  commis- 
sion      §§134,151 

jurisdiction  of  courts  over §§  143,  144 

railroad  commissioners;  jurisdiction  of  courts.  .  .  .    §§  139,  149-153 

legislative  and  judicial  functions  as  to;  distinctions §  145 

discrimination  in  rates  may  be  prevented §  146 

extent  of  judicial  interference  as  to §  147 

jurisdiction  of  courts  before,  goes  into  effect §  148 

excessive  charges;  claim  for  repayment  enforced  in  common- 
law  action §  1 50 

excessive  charges;  relief  where  railroad  commission  acting 

without  jurisdiction  orders  them  refunded §  150 

injunction  to  restrain  enforcement  of  schedule  of  rates  pub- 

Ushed  by  railroad  commissioners §  150 

where  resort  must  first  be  had  for  relief  as  to §  151 

courts  cannot  interfere  by  injunction  to  control  in  advance 

the  action  of  railroad  commission §  151 

railroad  commission  may  be  enjoined  from  proceeding  to  fix 

rates §  151 

appeal   to  State  Supreme   Court   before   suing  in   Federal 

Court §  152 

shipper  may  sue  in  case  of  excessive  charges  without  first 

applying  to  commission §  151 

whether  suit  against  railroad,  etc.,  commission  is  suit  against 

State §  155 

rates  of  railroad  company  unreasonable;  suit  to  restrain; 

where  "  found " ;  jurisdiction §  187 

excessive  or  extortionate  charges;  civil  or  criminal  suit.  ...    §  314 
mandamus  to  control  rates,  charges  and  fares;  discrimina- 
tion      §  365 

and  charges;  quo  warranto  to  control §  388 

equity  no  jurisdiction  to  fix  prices  to  be  charged  by  public 

warehouseman §  403 

fixed  by  lease;  when  party  no  such  interest  as  to  invoke  aid 

of  equity §  404 

equity  suit §  408 

injunction  against §  425 

when  carrier  liable  as  party  to  joint  rate;  accepting  rebates; 

Elkins    Act §  452 

discrimination  in;  rebates;  Elkins  Act;  criminal  law;  place 

of  trial ;  single  continuous  offense §  458 

V.     Commerce;  interstate  commerce: 

power  to  regulate §  §  42,  43,  44 

A.  Power  to  regulate §  §  42,  43,  44 


INDEX  763 

CONSTITUTIONAL  BASIS  OF  ACTIONS  AND  DEFENSES— Con- 
tinued : 
exclusive  and  concurrent  powers  of  Congress  and  of  the 

States note,     §  44 

Congress  has  plenary  power  to  regulate §  26 

State  cannot  regulate  under  guise  of  police  power §  2 

provision;  police  power  not  affected  by §  8 

liberty  to  contract §11 

regulation   and   control   of   foreign   corporations   by  State; 

limitation  interstate  commerce §  20 

feature  of  Employers'  Liability  Act §  26 

power  of  Congress  as  to  liability  of  carriers  to  employes ....      §  26 

power  of  Congress  over  carriers  of §  26 

protection  of  employes  of  railroads  engaged  in §  27 

statute  may  provide  for  automatic  couplers  on  all  kinds  of 

cars §  27 

statute  may  provide  for  examination  and  licensing  of  loco- 
motive engineers , §  27 

rental  charges  and  taxes  imposed  upon  or  enforced  against 

telegraph,  etc.,  companies §  31 

when  cannot  be  interfered  with  by  statute  as  to  delivery  of 

messages  by  telegraph  company §  31 

rate  regulation  as  affecting §  32 

act;  when  statute  as  to  railroad  rates  in  conflict  with §  32 

long  and  short  hauls §  §  40,  4 1 

District  of  Columbia;  Territories §  45 

business  within  the  State;  combinations;  telegraph  com- 
panies ;  common  law §  46 

regulation  and  control;  railroads §  47 

regulation  and  control;  railroads  continued;  express  com- 
panies        §  48 

cab   service   maintained    by   railroad   when   not   interstate 

commerce §  47 

constitutionality  and  construction  of  commodities  clause  of 
Hepburn  Act;  railroads;  carriers  as  stockholders;  injunc- 
tion; mandamus;  penalty §  49 

State  requirement  that  interstate  and  other  trains  stop  at 

specified  stations §  50 

police  power;  intoxicating  liquors;  carriers §  51 

intoxicating  liquors;  delivery;  Wilson  Act;  carriers;  penalty.     §  52 
intoxicating  liquors  continued;  "arrival";  original  package; 

Wilson  Act §§  53,  54 

regulation  of  commerce;  insurance §  55 

bridges;  navigable  waters;  powers  of  Congress  and  of  the 

State ^-^^ 

power  of  Congress  to  regulate  bridges §  56 

police  power;  regulation  of  grain  warehouses,  elevators, 
warehousemen,  etc s  <*' 


764  INDEX 

CONSTITUTIONAL  BASIS  OF  ACTIONS  AND  DEFENSES— Con- 
tinued : 
regulation  by  State  of  warehousing  and  inspecting  grain ...      §  57 

quarantine  and  inspection  regulations;  police  power §58 

police  power;  quarantine  and  inspection  regulations §§  58,  59 

corporations  engaged  in,  cannot  appropriate  property  with- 
out liability  to  pay  for  same §  (50 

State  cannot   compel   corporations  to  pay  for  privilege  of 

engaging  in §  ^0 

State  cannot  exclude  corporation  engaged  in §  75 

Secretary  of  Agriculture  no  power  to  regulate,  under  Cattle 

Contagious  Disease  Act §  99 

departmental  orders  as  to  and  as  to  intrastate  commerce 

when  not  divisible note*     §  ^9 

stopping  interstate  trains ;  jurisdiction  of  railroad  commission.   §  118 

delivery  of  cars;  jurisdiction  of  railroad  commission §  119 

constitutional   law;   Elkins  Act;   liquor  laws;   regulation  of 

carriers;  excessive  fines §  456 

VI.  Taxation: 

interstate  commerce ;  taxation ;  generally §  60 

interstate  commerce;  taxation;  carriers;  express  companies; 

vessels;  railroads;  telegraph  companies §  61 

interstate  commerce;  single  tax  upon  receipts  of  telegraph 

companies §  "1 

interstate  commerce;   taxation;  railroads  continued;  other 

property »  ^^ 

interstate  commerce;  taxation  of;  property  left  temporarily 

instate §63 

interstate  commerce;  taxation  of  bridges  and  bridge  com- 
panies  • §64 

instrumentalities  of  Federal  Government;  Federal  and  State 

control ;  national  banks §  §  65,  66 

taxation;  power  of  States;  generally §  67 

taxation;  obligation  of  contract;  equal  protection  of  law; 

due  process  of  law §  68 

interstate  commerce;  taxation  of  transfers  of  stock §  68 

interstate  commerce;  taxation  of  transfers  of  stock;  non- 
resident  stockholders §  68 

taxation;  exemptions;  instrumentalities  of  Federal  Govern- 
ment; State  agencies §  69 

taxation;  instrumentalities  of  Federal  Government;  qualifica- 
tion or  limitation  of  doctrine  of  exemption §  70 

taxation ;  national  banks §71 

taxation;    savings    banks;    obligations,    securities,    bonds, 

stocks,  notes,  etc.,  of  United  States §§  72,  73 

same  subject;  when  tax  is  on  franchise §  74 

taxation;   franchises   or   privileges   conferred    by   Congress; 

railroads;  telegraph  companies 5  75 


INDEX  765 

CONSTITUTIONAL  BASIS  OF  ACTIONS  AND  DEFENSES-€on- 

tinued: 

interstate   commerce;   extent   to   which   State   cannot   tax 

franchises  or  privileges  conferred  by  United  States §  75 

interstate  commerce;  eliect  of  as  to  taxation  of  railroads.  .      §  70 

constitutional   law;   taxation   of   railroads §  7(; 

constitutional    law;    charter   stipulation    that    railroad    pay 

percentage  of  gross  earnings  to  State §  76 

constitutional  law;  due  process  of  law;  taxation  of  railroads; 

cars  temporarily  absent  from  State §  7(i 

taxation;  franchises;  capital  stock §  77 

taxation;  "franchise";  "corporate  franchise";  express  com- 
panies; ferry  franchise;  bridge  companies;  insurance  com- 
panies; uniformity  of  taxation §  78 

interstate  commerce;  tax  on  public  service  corporations  on 

business  done  within  State §  78 

exemption  from  taxation;  power  of  State  as  to;  eflfect  of  con- 
solidation, etc §  79 

CONSTITUTIONAL  LAW, 

jurisdiction    Federal   Supreme   Court;   questions   arising   under 

Federal  Constitution  and  laws §  83 

meaning  of  term  in  Constitution  for  "Further  Civil  and  Criminal 

Jurisdiction" §  89 

See  Constitutional  Basis  of  Actions  and  Defenses;  Federal  Ques- 
tions; Foreclosure;  Foreign  Corporations. 

CONSTRUCTIVE  FRAUD.     See  Fraud. 

CONTAGIOUS  DISEASES.     See  Cattle  Contagious  Diseaae  Acts; 
Alien  Immigration  Act. 

CONTEMPT, 

authority  of  courts  to  punish  summarily;  definition  of  jurisdic- 
tion applied §  82 

,  Interstate   Commerce   Commission;   use  of  process  of   Federal 
Court  in  aid  of  inquiries;  testimony;  production  of  books,  etc.; 

power  of  commission §  137 

notice  to  corporation  to  produce  books,  then  outside  of  State, 
before  grand  jury §  13S 

CONTRACT, 

liberty  to;  police  power §§11.12 

liberty  to;  Anti-trust  Act §  1 1 

liberty  to;  combinations §  1 1 

between  railroad  company  and  elevator  company  when  not  an 

interference  with  power  of  Congress  to  regulate  coinmercc §  1 1 

liberty  to ;  interstate  commerce §11 


766  INDEX 

CONTRACT— Continued : 

liberty  to;  constitutional  law §§  11,  '2 

liberty  to;  insurance §  12 

liberty  to;  limitation  of  liability §  12 

liberty  to;  mechanit-s'  liens §  12 

liberty  to;  sales  on  margins §  12 

impairment  of  obligation  of;  exemption  from  change  of  rates 

and  transfer  thereof  by  consolidation  of  companies §  39 

an  element  of  exists  in  the  coming  shareholder  of  National  Banks     §  66 

impairment  of  obligation  of;  taxation §  68 

impairment  of  obligation  of  where  charter  of  bank  limits  amount 

of  tax §  68 

exemptions  under  charter  inviolate §  79 

impairment  of  obligation  of;  enforcement  against  street  railway 

company  of  resolution  of  city  council §  126 

to  convey  land;  suit  by  assignee  of;  when  Federal  Court  no  juris- 
diction    §  193 

impairment  of  obligation  of ;  Federal  question ;  jurisdiction .  .  note,    §  208 

within  apparent  scope  of  powers note,  §  223 

bank  no  power  to  alter;  charter  forfeited §  239 

of  predecessor,  railroad  company  not  liable  for §  254 

made  by  promoters  not  binding  on  corporation  before  incorpora- 
tion     §  259 

whether  stockholders'  liabihty  on  of §  284 

assumpsit §  321 

to  deliver  stock  for  property;  when  equity  may  enforce  same.  ...   §  402 
for  corporation  in  procuring  municipal  franchise;   validity  of; 

public  poUcy;  equity;  when  remedy  at  law  adequate §  407 

reformation  of  or  relief  from §  412 

to  prevent  competition ;  remedy  in  equity §  436 

to  sell  corporate  stock;  specific  performance §  439 

hability  of  party  carrying  out  illegal  agreement  executed  prior  to 

passage  of  statute;  retroactive  effect §  454 

See  Actions  Ex  Contractu;  Consideration;  Insurance;  Pledge; 
Reinsurance. 

CONTRACT  OR  TORT, 

form  of  action;  election  of  remedy §  319 

CONTRACTOR, 

payment  to  in  stock;  not  a  stock  subscription §  293 

CONVERSION, 

of  timber;  pleading ;  trespass §  330 

See  Trover  and  Conversion. 

CONVEYANCE, 

suit  to  set  aside  severable;  removal  to  Circuit  Court : §  213 


INDEX  767 


"CORPORATE  FRANCHISE," 
tax  on 


§78 


CORPORATION, 

is  subject  to  reasonable  regulations  by  legislature §  6 

as  instrumentalities,  under  power  of  Congress  to  regulate  com- 
merce    « g2 

when  is  and  is  not  a  citizen;  pleadings §  173 

powers  of,  generally;  parties s  223 

as  an  entity s  224 

as  entity;  equity §  225 

may  sue  and  be  sued s  227 

de  facto  may  sue  and  be  sued §  245 

de  facto,  what  constitutes,  generally §  246 

de  facto;  legislative  power  to  cure  defective  organization §  246 

de  facto;  collateral  attack §  247 

estoppel  to  deny  legal  corporate  existence §§  247,  248 

has  remedy  at  law  to  redress  wrongs  of  promoters §  259 

internal  management  of;  general  rule §  260 

and  not  stockholders  should  sue  under  Sherman  Anti-trust  Act.  ■  §  273 

should  sue  or  be  made  party  to  suit  by  stockholder §  274 

liability  of,   for  negligence;   willful  or  malicious  acts  of  serv- 
ants     §  317 

regulation  of  internal  affairs  of , §  402 

internal  management  of,  general  rule §  260 

citizenship  of.     See  Citizenship. 

jurisdiction  of  courts  over.     See  Courts;  Jurisdiction  of  Courts. 

CORPORATION  BOOKS, 

mandamus  to  compel  inspection §  362 

See  Books. 

CORPORATION  COMMISSION, 

jurisdiction  of;  delivery  of  cars §  119 

of  North  Carolina  no  power  to  enforce  its  orders  by  final  process  §  140 
See  State  Corporation  Commission. 

CORPORATION    SUPERVISORY    BODIES.     See   names  of  the 
various   commissions.     See  Jurisdiction  of  Corporation   Super- 
visory Bodies. 

COUNTERCLAIM, 

suits  by  stockholders  against  trustee  of  funds  for  dividends; 
defenses « §  270 

COUNTIES, 

power  of  legislative  bodies  of,  to  fix  water  rates §  95 

COUPLERS.     See  Automatic  Couplers. 


768  INDEX 

COURT  OF  ADMIRALTY, 

consignee  may  sue  in 


§244 


COURT  OF  VISITATION, 

jurisdiction  of §  ^8 

COURTS, 

jurisdiction  is  to  see  that  no  right  secured  by  supreme  law  is 

impaired  by  legislation §  4 

statute  for  production  of  books  and  papers  includes  court .  . .  note,       §  4 
cannot  make  form  and  substance  test  of  power  of  Congress  to 
enact  statute  in   matter  over  which  Congress   has    absolute 

control 8  4 

presumption  is  that  legislature  never  intends  to  interfere  with 

action  of §  4 

regulation  of  location,  maintenance,  etc.,  follows  within  Umits 

of  judicial  department,  when §  -^ 

power  to  regulate  cannot  be  secured  by,  when  not  delegated ....       §  5 
proceedings  legislative  are  not  proceedings  within  meaning  of  the 

Revised  Statutes,  §  720 §  5 

may  restrain  unlawful  exercise  of  legislative  or  administrative 

powers  by  executive  officers,  municipal  councils,  boards §  5 

statute  cannot  compel  courts  or  judges  when  acting  judicially  to 

exercise  legislative  powers,  when §  5 

duty  of,  to  guard  vigilantly  against  any  needless  intrusion  on 

powers  of  Congress §  10 

interference  of;  pohce  power;  legislative  discretion §  10 

interference  of;  exercise  of  police  power §  10 

jurisdiction  of  Federal  is  limited §  82 

authority  of  to  punish  summarily;  contempt;  definition  of  jurisdic- 
tion applied §  82 

of  general  jurisdiction;  when  jurisdiction  acquired  over  subject- 
matter  §  83 

jurisdiction  of  municipal  courts §  89 

jurisdiction  of  New  York  municipal  courts note,      §  89 

what   judgment   rendered   on    report   of    "special    commi-ssion" 

appointed;  compulsory  sale  of  gas  or  electric  light  plant  to  city.  §  102 
special  tribunal;  "special  commission"  to  hear  and  adjudicate  not 

a  "court" §10- 

appointment  of  "special  commission"  to  hear,  adjudicate  and 

report;  purchase  of  gas  or  electric  plant  by  city §  102 

Interstate  Commerce  Commission  not  a  "court" ' §  103 

interference  by  injunction  with  Interstate  Commerce  Commis- 
sion  note,  §  106 

cannot  fix  maximum  rates note,  §  106 

railroad  commission  not  a  court §  112 

notice  to  corporation  to  produce  books  before  grand  jury;  con- 
tempt    §  138 


INDEX  709 

COURTS— Continued: 

essentials  or  prerequisites  of  jurisdiction  over  corporations §  150 

equity  jurisdiction;  adequate  remedy  at  law §  103 

equity  jurisdiction;  adequate  remedy  at  law;  collection  of  taxes; 

injunction e  ,r., 

equity  jurisdiction;  waiver  of  defense  of  remedy  at  law §  105 

when  equity  has  no  jurisdiction  of  bill  to  recover  lands  of  railroad 

company §  j^q 

jurisdiction  of  court  of  claims  of  New  York;  negligence  causing 

death;  nonresidents  as  parties;  State  as  common  carrier §  171 

when  corporation  is  and  is  not  a  citizen;  pleadings §  173 

presumption  as  to  citizenship  of  members  of  corporation;  presi- 
dent and  stockholders  5  1 74 

joint-stock   company   not  a  corporation  for  jurisdictional  pur- 
poses     §  17.!5 

limited  partnership  not  a  corporation  for  jurisdictional  purposes.    §  176 
board  of  trustees  not  a  corporation  for  jurisdictional  purposes.  . .   §  177 

jurisdiction  of;  consolidated  corporations §  180 

obtaining  jurisdiction  of  foreign  corporation §  ISl 

jurisdiction;  where  territory  divided  into  two  States §  181 

jurisdiction;  citizenship  of  guardian  in  suit  against  corporation .  .    §  185 
jurisdiction;  where  "found";  suit  to  restrain  enforcement  unrea- 
sonable rates  by  railroad  corporation ^  187 

jurisdiction;  transitory  action  of  trespass;  parties  residents  of 

other  States  than  that  of  suit §  188 

power  of  State  to  limit  jurisdiction  of  its  courts;  power  to  ad- 
minister common  law §  199 

consent  of  parties  as  conferring  jurisdiction §  200 

jurisdiction;  appearance;  consent;  waiver §  201 

effect  of  appearance  on  jurisdiction  of §  201 

waiver  of  jurisdictional  defect  as  to  particular  district §  202 

where  case  goes  more  than  once  to  highest  State  Court;  final 

judgment;  writ  of  error §  204 

no  cause  removable  unless  it  is  one  of  which  Circuit  Courts  given 

original  jurisdiction §  207 

effect  upon  jurisdiction  of  State  Court  of  removal  of  cause §  220 

equity  jurisdiction  of  Federal  Courts;  generally §  H>2 

refusal  of  to  permit  stockholders  to  defend §  27.5 

may  make  stockholder  party  defendant §  275 

order  of  requiring  remedies  to  be  exhausted;  statute  limitations.  .   §  ol2 

Federal  Courts  are  not  inferior  courts §  S2 

jurisdiction  of  Federal  Courts  is  limited §  ^2 

Federal;  absence  from  records  of,  of  all  jurisdictional  facts  is 

immaterial §  ^2 

when  jurisdiction  of  Federal  Courts  exists;  essentials  of §  S3 

equity  jurisdiction  of  Federal  Courts;  parties .   §100 

when  Federal  court  has  jurisdiction;  corporation;  doing  business; 
process;  service §  181 

49 


770  INDEX 

COURTS— Continued: 

when  Federal  Court  has  no  jurisdiction;  corporation;  doing 
business §  182 

where  Federal  Courts  no  jurisdiction  of  suit  by  assignee  of  chose 
in  action;  assignment  of  judgment §  189 

jurisdiction  of  Federal  Courts;  suits  by  assignors;  inquiry  relates 
to  time  when  suit  is  brought §  190 

jurisdiction  of  Federal  Courts;  suits  by  assignee  of  promissory  note 
or  chose  in  action;  exceptions  to  statutory  prohibition §  191 

when  Federal  Courts  have  jurisdiction  of  suits  by  assignee §  192 

when  Federal  Court  has  no  jurisdiction  of  suits  by  assignee;  con- 
tract to  convey  land §  193 

nature  of  jurisdiction  of  national  courts;  extent  of  resort  to  com- 
mon law §  197 

Federal  jurisdiction;  effect  of  state  statutes;  rights  and  remedies.  §  198 

Federal  question  or  right;  when  court  has  jurisdiction;  instances.    §  20S 

Federal  question  or  right;  when  court  has  no  jurisdiction;  in- 
stances     §  209 

presentment  of  Federal  question;  record. .  .    §  210 

jurisdiction  of  Federal  Supreme  Court  over  orders  of  Interstate 
Commerce  Commission;  what  court  will  consider §  131 

Federal  Supreme  Court  not  controlled  by  decisions  of  State 
Court note    §  219 

right  of  stockholders  to  sue  in  equity  in  a  Federal  Court  for  sur- 
plus assets  after  forfeiture  of  franchises §  269 

Federal,  in  law  trial,  cannot  exercise  equity  powers §  402 

Federal;  may  enforce  new  rights  of  action  given  by  State  statute  §  402 

Federal  Supreme  Court  will  not  limit  legislative  power  by  declar- 
ing its  judgment  unwise §  4 

on  writ  of  error  and  appeal;  fundamental  question  in  Federal 
Supreme  Court  is  jurisdiction. §  157 

jurisdiction  of  Federal  Supreme  Court;  question  of  arising  on 
face  of  record §  157 

findings  of  facts  by  State  Court  conclusive  in  Federal  Supreme 
Court §  158 

jurisdiction  of  Federal  Supreme  Court;  Federal  question;  present- 
ment by  record;  special  allegation §  158 

appeals  taken  after  1891  to  Federal  Supreme  Court §  159 

jurisdiction  of  Federal  Supreme  Court;  suit  by  State  for  injunc- 
tion     §  618 

Federal  Supreme  Court  power  to  review  judgment  of  State 
Court §§  208,  209 

jurisdiction  of  Federal  Supreme  Court  after  removal  ordered  by 
Circuit  Court §  221 

jurisdiction  of  Federal  Supreme  Court,  to  proceed  against  bridge 
as  nuisance. §  402 

jurisdiction  of  Federal  Supreme  Court,  to  what  extent  follows 
English  High  Court  of  Chancery §  402 


INDEX  771 

COURTS— Contimied: 

jurisdiction  of  Federal  Circuit  Court  of  A|)i)eal8;  when  invoked; 

diverse  citizenship 6  IfiO 

jurisdiction  of  Federal  Circuit  Courts  over  ordera  of  Interstate 

Commc^rce  Commission S  1  ,'J  I 

original  jurisdiction  of  Federal  Circuit  Courts  under  Judiciary 

Act  of  1888 g  1,;, 

jurisdiction  of  Federal  Circuit  Court  to  remove  incumbrance!  or 

lien  or  cloud  upon  title  to  property  within  district;   absent 

defendants;  process;  service;  publication §  168 

equity  jurisdiction  of  Federal  Circuit  Courts;  probate  matters; 

diverse  citizenship k  jqcj 

what  constitutes  controversy  or  dispute  between  parties;  juris- 
diction of  Federal  Circuit  Court;  citizenship §  172 

citizenship  of  corporation  of  two  or  more  States;  ancillary  or  per- 
missive charters  or  license §  178 

removal  of  causes  to  Federal  Courts;  corporation  of  two  or  more 

States §  1 7!) 

jurisdiction;  plaintiffs  citizens  of  different  States §  183 

jurisdiction  of  Federal  Circuit  Court;  citizenship  of  guardian  in 

suit  against  corporation §  igr, 

jurisdiction;  State  not  a  citizen;  diverse  citizenship. §  18G 

motive  for  bringing  suit  or  in  obtaining  citizenship  as  afTecting 

jurisdiction §§  104,  195 

jurisdiction;  rearrangement  of  parties;  diverse  citizenship §  196 

subsequent   change  in   conditions  after  jurisdiction  of  Circuit 

Court  has  attached §  203 

jurisdiction  of  Federal  Circuit  Courts  under  Judiciary  Act  of 

1888;  removal  of  suits §  20.5 

removal  of  suits;  what  record  must  show §  206 

no  cause  removable  to  Federal  Circuit  Court  unless  one  in  which 

Circuit  Courts  given  original  jurisdiction §  207 

removal  of  suits;  corporations  created  by  Congress;  Constitution 

and  laws  of  United  States;  separable  controversy §  211 

removal  of  suits;   corporations  created  by  Congress;  national 

banks §  212 

removal  of  suits;  separable  controversy;  joint  action §213 

removal    of    suits;    separable    controversy;    joint  action;  tort;^; 

diversity  of  citizenship §  212 

removal  of  suits;  separable  controversy;  joint  action;  fraudulent 

joinder §  215 

removal  of  suits;  separable  controversy;  joint  action;  what  record 

must  show §  216 

denial  of  petition  for  removal;  petitioner's  right  to  elect  remedy .  .    §  217 
removal  of  suit  denied  in  State  Court;  filing  answer  and  record; 

asserting  affirmative  remedy  and  denial  of  jurisdiction §  218 

Federal  Circuit  Court  may  determine  removability  of  cause  and 

protect  such  jurisdiction  injunction §  219 


772  INDEX 

COURTS— Continued : 

prohibition  to  Admiralty  Court §  400 

injunction  from  Federal  to  State  Court §  423 

See  Equity  Jurisdiction;  Jurisdiction. 

COURTS  OF  RECORD, 

railroad  commission  of  North  Carolina  is  a §  140 

COVENANT, 

action  of   §  325 

CREDITOR, 

as  party  plaintiff  to  bill  in  equity  where  railroad  sought  to  be 

taxed §  ^"^ 

suit  by;  when  judgment  by  default  will  not  protect  garnishee.  ...      §  88 
of  corporation;  suit  by  to  set  aside  conveyance  of  real  estate  and 

mortgage  of  personal  property §  168 

of  dissolved  corporations;  equity  jurisdiction  in  behalf  of;  prin- 
ciple upon  which  exercised. §  170 

rights  of  before  dissolution  and  action  taken  by  court §  239 

"  term  creditors  "  as  used  in  an  act  held  not  to  include  directors .  .    §  261 

suit  in  equity  by  against  directors §  265 

individual  liability  of  officers  and  trustees  to,  where  capital  stock 

not  subscribed;  suit  in  equity  by  creditors  against  directors ....    §  265 

taking  stock  as  collateral  not  a  shareholder §  277 

remedy  of  not  affected  by  repeal  of  charter §  27S 

suits  by;  parties,  generally §  2/8 

liability  of  stockholder  to,  on  dissolution §  278 

merger  in  decree  for  receiver  of  right  to  .sue  stockholder §  278 

unpaid  subscriptions  to  stock  a  trust  fund  for §  279 

liability  of  stockholders  to;  generally §§  281,  282 

suits  by;  subscribers  to  capital  stock;  defense  of  illegality  of  corpo- 
rate scheme §  283 

right  to  intervene  in  suit  by  receiver §  285 

right  to  sue  nonresident  stockholder §  286 

action  against  stockholder;  what  pleading  should  show §  287 

liability  of  stockholders  to;  unpaid  subscriptions  or  stock.    §§  288,  289 
liabihty  to,  of  stockholders  where  stock  received  without  con- 
sideration or  for  less  than  value;  "Bonus  stock" §§  291,  292 

liability  of  stockholders  to;  stock  issued  for  property;  material 

overvaluation §§  295,  297 

stock  issued  for  property  a  fraud  on ;  stockholder  liable  to §  296 

stockholders'  liability  to  judgment  creditors  for  unpaid  slock-  par- 
ties  •    §299 

amount  of  creditor's  recovery  on  stock  may  be  limited  by  his 

knowledge  of  agreement  under  which  shares  issued §  300 

amount  of  recovery  on  stock  may  be  limited  l^y  his  knowledge  of 

agreement  under  which  shares  sold §  300 


INDEX  773 

CREDITOR— Continued : 

conditions  precedent  to  suits;  demand  and  refusal;  exhausting 
remedies §§  3,jl   ;>i2 

or  stockholder  may  sue  after  demand  upon  and  refusal  of  corpo- 
rate authorities  to  act;  stockholder  may  defend §  .iOl 

may  sue  after  demand  upon  and  refusal  of  corporate  authorities  to 
act;  stockholder  may  defend §:'.<<! 

when  demand  upon  and  refusal  of  corporate  authorities  to  act  con- 
dition precedent  to  suit §§  ;i(j2  ;}03 

See  Equity;  Foreclosure. 

CRIMES, 

jurisdiction  of  Federal  Courts  over note,   §  197 

See    Embeazlenent. 

CRIMINAL  ACTION, 

liability  for  extortionate  rates §  314 

CRIMINAL    INTENT §§  451,  452 

"CRIMINAL"  JURISDICTION, 

defined;  "Further  civil  and  criminal  jurisdiction"  defined §  89 

CRIMINAL  AND  PENAL  OFFENSES, 

act  of  Congress  as  to  discharge  of  employe  because  member  of 

labor  organization §  20 

by  officers  and  agents  of  banks;  power  of  State  as  to §  (i(i 

penalty  for  bringing  in  aliens  afflicted  with  contagious  diseases 

is  civil,  not  criminal  offense §  lOH 

penalties;  suit  by  consignee  to  recover §  440 

right  to  inspect  books  of  corporation;  penalties  for  refusal  to 

allow §1-11 

telegraph  and  telephone  companies;  discrimination;  penalties.  ...    §  442 

offenses  against  LTnited  States §  443 

power  of  C'ongress;  to  what  extent  corporation  can  be  charged 

criminally  for  agent's  acts;  common  carriers;  rates §  444 

police  power  of  States;  crimes  and  penalties;  combinations  in  re- 
.  straint  of  trade;  extent  of  judicial   interference  by  Federal 

Courts §  445 

corporation  criminally  liable;  may  l)e  intlicted §  446 

indictment  of  corporations  for  nuisances §  447 

insurance  companies;  combinations;  conspiracies;  insurance  as 

"commodity";  when  and  when  not  indictable  offenses §  448 

criminal  offenses  by  corporations;  employment  of  children  under 

certain  age;  penalties §  449 

indictment;  while  a  corporation  might  be  liable  for  misfeasance 

under  certain  definitions  of  manslaughter  it  cannot  be  guilty  of 

latter  under  New  York  Penal  Code §  450 

construction  of  Anti-trust  Act;  what  prohibitions  of  embrace;  in- 
tent of;  what  are  and  are  not  illegal  combinations  within §  451 


774  INDEX 

CRIMINAL  AND  PENAL  OFFENSES— Continued: 

construction  of  Elkins  Act;  criminal  intent;  accepting  rebates; 

when  carrier  liable  as  party  to  joint  rate §  452 

construction  of  Elkins  Act;  "  device  "  to  obtain  rebates §  453 

penal  statute;  retroactive  effect;  liability  under,  of  party  carrying 

out  illegal  agreement  executed  prior  to  its  passage §  454 

State  jurisdiction  over  violation  of  Antitrust  Law  where  agree- 
ment made  out  of  State;  extraterritorial  effect  of  conspiracy, 

etc. ;  statute §  455 

constitutional  law;  Elkins  Act;  liquor  laws;  regulation  of  carriers; 

excessive  fines §  456 

sufficiency  of  indictment §  457 

discrimination  in  rates;  rebates;  Elkins  Act;  criminal  law;  place  of 

trial;  single  continuous  offense §  458 

CRIMINAL  LAW, 

proceedings  against  resident  owners;  civil  proceoJings  against  non- 
residents constitutes  discrimination §  14 

CURRENCY, 

as  subject  of  action  of  trover §  340 


D 

DAMAGES, 

on  fire  policies.  State  may  regulate  measure  of §  17 

when  Congress  may  provide  for  recovery  of §  30 

for  loss  by  fire  from  locomotive  engines;  State  may  provide  for  re- 


covery , 


30 


State  may  provide  for  recovery  of,  for  killing  live  stock §  30 

claims  for;  time  limited  by  statute  for  adjustment  of §  30 

suit  for;  jurisdiction §  81 

action  for,  to  recover  for  destruction  of  parish  bridge;  parties 

note,  §  228 

action  by  consignor  against  corporation §  243 

in  suit  by  corporations  against  officers  or  directors §  -62 

suit  for,  by  corporation;  ultra  vires  act  of  officer §  262 

minority   stockholder's   interest   injured;   corporation   necessary 

party §  274 

statutory  double  damages  for  loss  of  baggage §  314 

warehouseman,   liability  of  for  damages   for  refusal   to  deliver 

wheat  demanded  to  transferee  of  warehouse  receipt §  314 

action  for  and  not  ejectment;  when  lies  against  railroad §  315 

measure  of,  in  action  for  fraud;  false  statements  in  prospectus.  .  .  §  339 

DEATH, 

action  for  damages  for  negligently  causing;  definition  of  jurisdic- 
tion applied §  82 


INDEX  775 

DEATH— Continued : 

action  for  loss  sustained  from  drowning  in  interstate  river;  juris- 
diction  note,  §  90 

State  statute  as  to  action  for  wrongful  death  occurring  in  another 

State §  lOO 

caused  by  acts  of  servant note,  §  li  1 7 

DEBT §  324 

statute  limiting  time  for  carrier  to  adjust  claims;  penalty  for  is 

not  a  debt note,  §  3(» 

action  for  right  by  United  States  against  bank  to  recover  taxes .  .  §  252 

action  for  against  insurance  company  to  recover  penalty §  324 

DECEIT, 

prospectus  to  induce  subscriptions  to  or  sale  of  stock,  etc. ;  deceit 

note,  §  339 
See  Fraud  and  Deceit. 

DECLARATION.    See  Pleading. 

DEED, 

cloud  on  title;  equity  jurisdiction  to  cancel §  167 

suit  by  owners  of  railroad  stock  to  cancel §  168 

reformation  of  or  relief  from §  412 

DE  FACTO, 

corporation  may  sue  and  be  sued §  245 

what  constitutes;  legislative  power  to  cure  defective  organization  §  246 

when  corporation  not  one note,  §  246 

when  corporation  is  one note,  §  246 

collateral  attack;  estoppel  to  deny  legal  corporate  existence  §§  247,  24S 

collateral  attack;  State  or  public  officials  as  parties §  249 

new  corporation  organized  to  cure  defects  in;  liability §  255 

See  Corporation. 

DEFAULT, 

judgment  by  when  will  not  protect  garnishee §  88 

DEFECT, 

in  proceedings  for  incorporation  as  afifecting  suits  against  corpora- 
tion     §246 

DEFENDANT.    See  Parties. 

DEFENSES, 

to  injunction  and  mandamus;  transportation  of  coal;  commodi- 
ties clause  of  Hepburn  Act H9 

of  unconstitutionality  of  charter  stipulation  that  railroad  pay 

State   percentage  of  gross  leceipts §  '^' 

of  res  adjudicata  not  available  on  motion  to  dismiss  appeal §  83 


776  INDEX 

DEFENSES— Continued : 

judgment  based  on  void  insurance  contract §  88 

of  payment  of  part  of  money  due  upon  fire  loss  made  under  for- 
eign judgment;  when  judgment  rendered  without  jurisdiction.  §  88 

when  judgment  by  default  will  not  protect  garnishee §  88 

in  action  for  infection  of  cattle;  act  of  governmental  officers  in  fix- 
ing quarantine  line  unconstitutional note,  §  99 

overvaluation  by  board  of  equalization  not  a  ground  of  defense 

at  law §  123 

that  suit  nominally  against  railroad,  etc.,  commission  in  suit 
against  State  is  defense  to  merits  to  be  raised  by  demurrer  or 

other  proper  pleading §  155 

of  illegality  of  tax  open;  no  injunction §  164 

to  transitory  action  of  trespass §  188 

matters  of,  not  ground  for  removal  of  suit;  action  of  tort §  206 

denied  in  State  Court;  removal  of  suit;  what  should  be  shown  in 

statement  of  case §  206 

alone  bringing  out  matters  of  a  Federal  nature;  removal  of  suit.  .  §  206 

judgment  State  Court  denying;  review  by  Federal  Supreme  Court  §  208 
suit  by  foreign  corporation;  waiver  of,  by  failure  to  object.  §§  233,  236 
failure  of  foreign  manufacturing  corporation  to  obtain  certificate; 

action  on  fire  insurance  policy §  236 

suit  by  foreign  corporation;  pleading  failure  to  pay  license  fee 

note,  §  236 

of  real  title  in  bailor;  suit  by  consignor  who  was  bailee §  243 

to  suit  for  bridge  polls §  247 

forfeiture  of  franchise  as §  247 

of  want  of  legal  corporate  existence §§  247,  248 

collateral  attack;  de  facto  corporation §§  247,  248 

collateral  attack;  State  of  public  officers  as  parties;  de  facto  corpo- 

tion ;  instances §  249 

ratification  of  act  by  majority  stockholders  not  where  act  illegal . .  §  267 

to  suit  by  stockholder  against  trustee  of  fund  for  dividends §  270 

suit    by   stockholders   against   trustee   of   funds   for   dividends; 

counterclaim §  270 

of  illegality  of  corporate  scheme;  subscribers  to  capital  stock; 

suits  by  creditors §  283 

that  acts  of  trespass  were  done  under  charter  must  be  pleaded ....  §  330 
none,  in  action  for  fraud,  that  plaintiff's  officers  were  negligent  in 

not  discovering  fraud §  339 

when  not  a  defense  that  fraud  might  have  been  discovered §  339 

available,  generally §§  380,  394 

available,  generally;  to  mandamus §  380 

available,  generally;  in  quo  warranto §  394 

DEFINITIONS, 

"civil"  and  "criminal"  jurisdiction;  "further  civil  and  criminal 

jurisdiction  " §  89 


INDEX  777 

DEFINITIONS— Continued : 

of  concurrent  jurisdiction i  gc 

of  "  full  jurisdiction  in  nil  matters  of  equity" §  85 

"  further  civil  and  criminal  jurisdiction  " §  89 

'•general  jurisdiction  in  law  and  equity  " §  84 

of   jurisdiction §§  80,  SI 

of  jurisdiction  continued;  nature  of  corporation  cases  in  which 

given  or  applied;  instances §§  81,  82  83 

of  jurisdiction  in  " special  cases  " §  87 

of  jurisdiction  as  applied  to  State,  or  to  city  council §  <)0 

mandamus x  342 

police  power 57 

of  subject-matter  and  jurisdiction  over  it §  88 

of  venue §  91 

DEGREE, 

of  forfeiture  of  franchises;  right  of  stockholders  to  sue  in  equity  in 

Federal  Court  for  surplus  assets  after §  269 

See  Judgment. 

DELEGATION  OF  POWERS, 

police  power  may  be  delegated  to  municipal  corporations  or  other 

agencies §  10 

corporations  may  be  controlled  through  administrative  bodies ....  §  21 

to  corporate  supervisory  bodies §  92 

distinction  between  power  to  make  laws  and  employing  agency  to 

exercise  discretion  in  enforcing  same,  etc §  92 

to  municipality,  to  regulate  charges  of  common  carriers §  93 

to  city  council  to  apportion  burden  of  repairs  for  railroad  viaduct .  §  93 

when  legislative;  when  judicial;  instances §  93 

to  railroad  and  like  commissions §§  107,  109 

See  Jurisdiction. 

DEMAND, 

upon  corporate  authorities  and  their  refusal,  a  condition  precedent 

to  suit §  302 

upon  and  refusal  of  corporate  authorities;  necessity  of  alleging 

and  showing  same §§  30'),  300 

See  Conditions  Precedent. 

DEMAND  AND  REFUSAL, 

as  condition.^  precedent  to  suit §§  301-312 

DEMURRAGE, 

shippers'  indebtedness;  jurisdiction  of  Federal  Courts  to  determine 
same  in  first  instance §  130 

DEMURRER, 

defense  that  suit  against  commission  is  suit  against  State,  raised 

by §  155 


778  INDEX 

DEMURRER— Continued : 

sustained;  suit  by  stockholders;  Equity  Rule  94 note,   §  311 

in  mandamus §  381 

DENIAL, 

of  petition  for  removal;  right  of  petitioner  to  elect  remedy §  217 

DEPARTMENTAL  OFFICERS. 

control  and  supervision  of  by  courts;  mandamus;  injunction §  129 

or  executive  department;  injunction §  428 

See  Officers. 

DEPARTMENTAL  ORDERS, 

fixing  quarantine  line;  action  for  infection  of  cattle note,     §  99 

when  not  divisible  as  to  intrastate  and  interstate  commerce .   note,     §  99 

DEPOSITS, 

of  savings  societies  invested  in  United  States  securities;  taxation 

of §  74 

in  bank  in  joint  names  of  two  corporations;  may  join  in  assumpsit  §  323 

DEPOTS.    See  Railroad  Stations. 

DETAINER.    See  Forcible  Entry  and  Detainer. 

"DEVICE," 

to  obtain  rebates;  construction  of  Elkins  Act §  453 

cloud  on  title;  equity  jurisdiction  as  to §  167 

DIRECTORS, 

of  one  corporation  directors  of  another  does  not  prevent  suit  by  or 

against;  merger §  226 

equitable  suits  to  redress  wrongs  of,  must  be  instituted  by  corpo- 

tion §  259 

of  corporations ;  duties  and  liabilities  of  generally;  parties §  261 

duties  and  liabilities  of,  generally;  parties §  261 

not  liable  for  mere  error  of  judgment §  261 

action  against  under  New  York  Code  Civil  Procedure  for  miscon- 
duct      §  261 

not  included  by  term  "  creditors  "  as  used  in  an  act §  261 

or  officers;  suit  by  corporations  against;  damages;  accoimting.  ...    §  262 

suit  against  by  corporation  for  accounting §  262 

suits  against,  by  stockholders;  corporation  as  party §  263 

suit  by  stockholders  against ;  negligence ;  maladministration ;  aver- 
ments necessary ;  what  must  be  shown §  264 

suit  against  by  stockholders  for  negligence  or  maladministration; 

necessary  averments §  264 

suit  against  for  mismanagement  should  be  by  corporation §  274 


INDEX  779 

DIRECTORS— Continued : 

suit  in  ecjuity  l)y  creditors  against j  26 o 

and   ofiicerK,   individual   liability  of,   to  creditors   where  capital 
stock  not  subscribed;  suit  in  equity  by  creditors  against  direct- 


ors . 


demand  upon  and  refusal  of,  as  conditions  precedent;  discretion 


2Gr) 


of  directors r  .j,^  j 

when  demand  upon  for  relief  is  and  is  not  condition  precedent; 

Equity  Rule  94;  stockholder's  rifj;ht  to  protect  corpijration  when 

directory  derelict 5  310 

by-laws  increasing  power  of;  stockholders  entitled  to  protection 

in  equity §  .,(,._, 

election  of;  jurisdiction  of  equity  to  inquire  into §  .102 

injunction  against r  424 

DISCRIMINATION, 

criminal   proceedings   against   residents  and   civil   against  non- 
residents; statute  held  constitutional §  Jl 

power  of  State  to  impose  burden  upon  Public  Service  Corpora- 
tion        §  2 1 

when  definition  of  express  companies  does  not  constitute §  21 

or  classification;  fellow  servants  and  iliHerent  classes  of  employes 

not<>,     §  2() 

common  carriers  cannot  unreasonably  discriminate;  rates §  :{2 

as  to  rates  prohibited  by  Elkins  Act §  .S2 

power  of  State  to  prevent,  in  rates,  is  subject  to  constitutional 

limitations §  33 

connecting  carriers;  terminal  charges §;{,") 

joint  through  rate;  connecting  carriers'  duty;  liability §  35 

terminal  charges;  railroads note,     §  40 

as  to  rates;  jurisdiction  of  Interstate  Commerce  Commission  §§  103,  lOt 
discriminatory  regulations  of  carriers  within  jurisdiction  of  Inter- 
state Commerce  Commission §  KMifi 

in  rates  may  be  prevented §  140 

mandamus  to  control  rates,  charges  and  fares §  3(i/> 

in  rates;  rebates;  Elkins  Act;  criminal  law;  place  of  trial;  single 

continuous  offense §  45.S 

telegraph  and  telephone  companies;  penalties §  442 

See  Classification;  Statutes, 

DISEASES.    See  Contagious  Diseases. 

DISMISSAL, 

of  bill  in  chancery  for  want  of  proper  parties §  229 

DISPENSARY  SYSTEM, 

State  may  control  sale  of  liquors  by;  but  if  it  does  so  it  engages  in 

ordinary  private  business §  ^"t 


780  INDEX 

DISSOLUTION, 

of  bank;  definition  of  jurisdiction  over  funds  applied §  81 

right  of  corporation  to  sue  as  affected  by §§  238,  239,  240 

of  corporation ;  transactions  after  are  void §  240 

stockholder's  liability  on  is  ex  contractu §  284 

as  condition  precedent  to  enforcing  stockholder's  liability §  309 

DISTRICT  OF  COLUMBIA, 

Employers'  Liability  Act  of  Congress;  constitutionality  of  with  re- 
lation to §  26 

regulation  of  commerce  in;  power  of  Congress §  45 

DIVERSE  CITIZENSHIP, 

as  ground  of  jurisdiction  of  Circuit  Court  of  Appeals §  160 

equity  jurisdiction  of  Federal  Circuit  Courts;  probate  matters.  ...    §  169 

citizenship  of  State §  186 

See  Citizenship;  Jurisdiction. 

DIVIDENDS, 

elements  in  fixing  rates §  36 

suit  by  stockholder  against  trustee  of  funds  for;  defense;  counter- 
claim     §  270 

suits   by  stockholders  against  trustee   of  funds   for;   defenses; 

counterclaim §  270 

false  statements  in  prospectus  as  to;  action  for  fraud §  339 

DOING  BUSINESS, 

in  State;  foreign  corporation;  jurisdiction §§  181,  182 

See  Foreign  Corporations. 

DRAINAGE.    See  Farm  Drainage  Act. 

DUE  PROCESS  OF  LAW.    See  Constitutional  Law. 


E 

EARNINGS, 

of  corporation;  false  statements  in  prospectus  as  to;  action  for 
fraud §  339 

EJECTMENT, 

telegraph  poles  and  lines §  315 

when  does  not  lie  for  land  beyond  water's  edge §  315 

by  holder  in  trust  of  legal  title  to  property  for  religious  corpora- 
tion    §  315 

against  one  in  possession  without  legal  or  equitable  title §  315 

what  title  and  possession  a  sufficient  basis  of  action  of note,  §  315 

action  for,  against  railroad §  315 


INDEX  781 

EJECTMENT— Continued: 

when  railroad  can  and  cannot  maintain 5  :{| '> 

land  appropriated  hy  levee  hoard ft  •il't 

when  persor  in  possession  of  premises note,  §  321 

ELECTION, 

of  corporate  officers;  mandamus §  35<) 

of  corporation  directors;  power  of  equity  to  inquire  into §  402 

ELECTION  OF  REMEDIES, 

by  petitioner  on  denial  of  petition  for  removal §217 

form  of  action;  contract  or  tort;  waiver §  ■"ll!* 

by  person  induced  by  fraud  to  sell  his  property §  33U 

ELECTRICAL  SUBWAYS.     See  Subways. 

ELECTRICITY, 

regulation  and  control  of  carriers  of §  3 1 

ELECTRIC  LIGHT  AND  HEAT  COMPANY, 

injunction   to,    refused;   consolidation   to   prevent  competition; 
fraud  on  public §  234 

ELECTRIC  LIGHT  PLANT, 

purchase  by  city;  "special  commission"  to  hear  and  adjudicate.  §  102 
cannot  be  maintained  as  nuisance §  334 

ELECTRIC  STREET  RAILWAY, 

right  of  abutting  owner  against §  242 

suit  by  taxpayer  to  enjoin  illegal  construction  of §  2oS 

See  Street  Railroads. 

ELEVATOR  COMPANY, 

contract  between,  and  railroad  company;  when  not  an  interfer- 
ence with  power  of  Congress  to  regulate  commerce §  1 1 

ELEVATORS, 

regulation  for  warehousing  and  inspecting  grain §  •'iT 

See  Warehouses. 

ELKINS  ACT, 

injunction  is  authorized  by,  whenever  any  departure  from  pub- 
lished rates S  "^2 

intention  of  Congress  in  passing,  was  to  prevent  departure  from 

published  rates  and  to  prevent  discrimination §  32 

consignee  may  be  charged  with  violating §  244 

construction  of;  criminal  int«nt §  l-''- 

construction  of;  "device"  to  obtain  rebates §  453 


782  INDEX 

ELKINS  ACT— Continued: 

constitutional  law;  liquor  laws;  regulation  of  carriers;  excessive 

fines §  456 

discrimination  in  rates;  rebates;  criminal  law;  place  of  trial;  single 

continuous  offense §  458 

EMBEZZLEMENT, 

by  agent;  when  express  company  liable §  339 

EMINENT  DOMAIN, 

defect  in  constitutional  provision  as  to  compensation  cannot  be 

cured  by  judgment §  51 

condemnation  of  land  necessary  for  construction  of  bridges;  act 

of  Congress §  56 

See  Condemnation. 

EMPLOYES.     See  Master  and  Servant. 

EMPLOYERS.     See  Master  and  Servant. 

EMPLOYERS'  LIABILITY  ACT.     See  Master  and  Servant. 

EMPLOYERS'  LIABILITY  CASES §  26 

See  Statutes. 

ENGINEERS.     See  Locomotive  Engineers. 

ENGLISH  HIGH  COURT  OF  CHANCERY, 

to  what  extent  jurisdiction  Federal  Supreme  Court  follows.  ...    §  402 

ENTITY, 

corporation   as §  224 

corporation  as;  equity • 


9?r^ 


EQUAL  PROTECTION  UNDER  THE  LAW.     See    Constitutional 

Law. 

EQUIPMENT, 

of  interstate  railroad  subject  to  control  of  Interstate  Commerce 

Commission §  106a 

EQUITY, 

generally §  402 

remedies,  generally , §  402 

bill  for  divisional  reUef  where  corporations  consolidate;  obligation 

of  contract;  exemption  from  change  of  rates §  39 

bill  in,  to  decree  exemption  of  railroaci  company  from  taxation.  .      §  S3 
to  prevent  multiplicity  of  suits  will  restrain  board  from  enforcing 

schedule  of  rates,  when §  150 


INDEX  783 

EQUITY— Continued: 

appeal  to  State  Supreme  Court  before  Kuit  in  Federal  Court  on 

question  of  rate  regulation S  1,52 

bill  lies  in,  to  restrain  continuance  of  nuisance §  334 

action    to   redeem   leased    premises;   jinisdiction   of    New    York 

municipal  court J,^^^      j  ^y 

corporation  as  entity t  995 

corporations  as  necessary  or  indispensable  parties  in  suit  in.  .  ,  .    §  22'] 

suit  in,  by  foreign  corporation;  comity §  ^ii] 

relief  in,  to  surety «  2m 

when  State  an  indispensable  party  in  proceeding  in §  250 

rule  of  pleading  in »  o'y.i 

remedy  in,  against  promoters x  25'J 

suits  in,  to  redress  wrongs  of  directors  or  promoters  must  be  in- 
stituted by  corporation §  25!) 

joinder  of  suit  in,  with  action  at  law  against  directors §  2H2 

suit  in,  against  director,  for  accounting §  2ti2 

suit  in,  by  creditors,  against  directors §  2H5 

bill  in,  by  minority  stockholders,  to  set  aside  lease §  266 

grant  of  relief  by,  to  minority  stockholders §  260 

power  to  order  corporate  dividends §  266 

appointment  by,  of  receiver,  at  suit  of  minority §  266 

when  stockholder  may  and  may  not  sue  in §  26K 

right  of  stockholder  to  sue  in,  in  a  Federal  Court  for  surplus  assets 

after  a  decree  of  forfeiture  of  franchises §  269 

right  of  stockholder  to  sue  in,  after  demand  upon  and  refusal  of 

corporate  authorities  to  act §  ;iOi 

equitable  remedies;  when  pledgor  has §  341 

enforcement  of  new  rights  and  new  remedies  conferred  by  statutes 

of  State  or  Territory,  by  Federal  Courts §  402 

jurisdiction  over  bridge  as  nuisance §  402 

powers  of  court  of,  cannot  be  exercised  by  Federal  Court  in  law 

trial §  402 

when  may  retain  case  and  grant  full  relief §  402 

may  protect  attachment  liens §  402 

subscription  for  stock  paid  for  in  land  which  subsequently  proved 

to  be  of  less  value §  402 

stockholder  not  liable  to  creditor  in  suit  in,  where  he  has  paid  in 

full  for  stock  by  transfer  of  propert}' §  402 

when  may  compel  delivery  of  certificates  of  shares  of  stock §  402 

may  prevent  violation  of  exclusive  right  to  exercise  ferry  fran- 
chise      §  102 

may  determine  riparian  rights §  402 

cannot  adjudge  forfeiture  of  property  under  Anti-trust  Act §  40:} 

when,  will  not  compel  railroad  company  to  own  and  operate  public 

warehouse  . .  .  _ §  103 

when  party  no  sufficient  interest  to  have  aitl  of,  as  to  compliance 
with  rates  fixed  in  lease §  404 


784  INDEX 

EQUITY— Continued : 

stockholder  suing  in,  sues  for  own  benefit  and  that  of  other  stock- 
holders      §  404 

suit  by  stockholder  to  set  aside  lease,  accounting,  etc §  404 

what  is  not  a  condition  precedent  to  suit  to  quiet  title §  405 

equity;  adequate  remedy  at  law §  406 

contract  for  co-operation  in  procuring  municipal   franchise;  va- 
lidity of;  public  policy;  equity;  when  remedy  at  law  adequate; 

illustration §  407 

adequate  statutory  remedy;  application  to  municipal  body  as 

condition  precedent  to  equity  suit;  rate  regulation §  408 

irreparable  injury §  409 

multiplicity  of  suits §  410 

fraud  and  trusts §411 

reformation  of,  or  relief  from,  written  instrimients  or  contracts.  .    §  412 

accounting §  413 

corporation  mortgages;  enforcement  of;  foreclosure;  rights  and 

remedies  of  parties;  general  instances §  414 

corporation   liens   and   mortgages;   equity   jurisdiction   of   fore- 
closure; conflicting  claims  to  possession §  415 

corporation   liens   and   mortgages;   enforcement   of;   foreclosure; 

parties §  416 

right  of  parties  upon  foreclosure  of  mortgages;  junior  bondholder; 
judgment  creditor;  priorities;  proceeds  of  sale;  adjustment  on 

claim;  accounting;  instances §  417 

foreclosure  and  sale  of  railroad  mortgage;  distribution  of  proceeds; 

unsecured  creditors;  bank  as  general  creditor;  prior  mortgagee.   §  418 
foreclosure  of  railroad  mortgage;  rights  of  purchaser;  title  and 

obligations §  419 

foreclosure  and  sale;  reorganization  agreements  by  purchasers; 

exceptions  to  sale;  constitutional  law §  420 

injunction;  generally;  instances §  421 

injunction;  jurisdiction §  422 

jurisdiction  to  enjoin  prosecuting  action  in  another  State;  juris- 
diction of  Federal  Court;  injunction  from,  to  State  Court.  ...    §  423 

injunction  against  officers,  directors  or  stockholders §  424 

injunction;   rate  regulation §  425 

injunction;  by  and  against  railroads  and  street  railroads §  426 

injunction  by  and  against  telegraph  and  telephone  companies.  .    §  427 
injunction;  interference  with  departmental  officers  or  executive 

department;   postmaster §  428 

injunction   to  protect   franchises   of   corporation   or   to   prevent 

their  forfeiture §  429 

injunction;  criminal  proceedings;  when  equity  cannot  and  can 


enjom 


430 


injunction;  nuisance;  bill  in  equity  to  abate §  431 

injunction;  nuisance;  parties;  State  or  attorney-general;  corpora- 
tions;  joinders §  432 


INDEX  785 

EQUITY— Continued: 

injunction  to  restrain  enforcement  of  orders  of  Interstate  Com- 
merce Commission x  ^-y^ 

bill  lies  in  eiiuity  to  revise  ruling  of  railroad  commiaaioners §  4:{4 

cancellation  and  rescission j  ^jjr, 

cancellation,  rescission  or  settinj^'  aside  sale  of  corporate  stock; 

contracts  to  prevent  competition;  pretended  purchase  of  stock.   §  43(j 

specific  performance j  437 

specific  performance;  discretion  of  court §  4;{S 

specific  performance;  contract  to  sell  corporate  stock §  439 

See    the   difTerent   forms    of   actions;    Injunction;    Jurisdiction; 
Parties;  Stockholders;  Title. 

EQUITY  JURISDICTION, 

"general  jurisdiction  in  law  and  equity"  defined §  84 

"full  jurisdiction  in  all  matters  of  equity"  defined §  85 

powers  of  courts;  injunction  against  collection  of  taxes.  .  .  .   note,   §  123 

cannot  establish  railroad  rates §  146 

railroads,  etc.,  rates;  impairment  of  obligation  of  contracts §  14() 

of  Federal  Courts,  generally §  162 

none  to  restore  money  or  property  to  corporations §  162 

to  cancel ;  guaranty  of  corporate  bonds §  1 62 

in  cases  of  fraud §  1 03 

of  Federal  Courts  vested  by  Judiciary  Act  of  178'J §  163 

adequate  remedy  at  law §  163 

to  restrain  enforcement  of  ordinance §  164 

adequate  remedy  at  law;  collection  of  taxes;  injunction §  164 

of  Federal  Courts;  parties §  166 

to  remove  cloud  upon  or  to  quiet  title §  167 

of  Federal  Circuit  Courts;  probate  matters;  diverse  citizenship.  .    §  169 

when  none,  of  bill  to  recover  lands  of  railroad  company §  170 

in  behalf  of  creditors  of  dissolved  corporation;  principle  upon 

which  exercised §  170 

suit  by  assignee  of  mortgage  to  set  aside  tax  deeds;  Federal 

Courts §  l'J2 

to  protect  real  estate  from  trespass §  236 

suit  by  policy  holder  against  insurance  company  for  accounting 

and  receivership §  276 

of  Federal  Courts  to  compel  obedience  to  orders  of  Interstate 

Commerce  Commission  as  to  rates §  132 

of  Federal  Circuit  Court  where  State  statute  has  enlarged  equi- 
table action §  102 

when  without  jurisdiction;  generally §  103 

parties ;  generally §  -104 

See  Jurisdiction. 

EQUITY  RULE  94, 

allegation  of  compliance  with ;  jurisdiction §  !S3 

50 


786  INDEX 

EQUITY  RULE  94— Continued: 

when  demand  upon  directors  for  relief  is  and  is  not  condition 
precedent;  stockholders;  right  to  protect  corporation  when 
directory  derelict §  310 

ERROR.     See  Writ  of  Error. 

ESSENTIALS, 

generally,  of  jurisdiction  of  courts §  156 

ESTOPPEL, 

judgments  of  Federal  Courts  possess  every  attribute  of  pertain- 
ing to  courts  of  general  jurisdiction §  82 

to  deny  legal  corporate  existence §§  247,  248 

to  deny  legal  corporate  existence;  de  facto  corporation.  .  .    §§  247,  248 
creditor's  knowledge  and  assent  to  transaction;  transfer  of  stock 
for  land §  402 

EVIDENCE, 

as  to  reasonableness  of  rental  or  similar  charges  against  tele- 
graph, etc.,  companies §  31 

elements  in  fixing  rates §  36 

opinion  as  to  value  of  property  in  fixing  rates §  36 

burden  of  proof  upon  question  whether  rate  is  confiscatory.  ...  §  36 
admission  of  incompetence,  not  a  ground  for  reversal  of  order  of 

railroad  commission  requiring  maintenance  of  depot,  etc. ...    §  120 
Public  Service  Commission  may  rehear  and  redetermine  on  new 

evidence §  121 

court  may  take  further,   on  certiorari  to  review  assessment  of 

special  franchise  tax §  124 

prima  facie;  findings   of   Interstate  Commerce   Commission  are 

§§  131,  132 
burden  of  proof  on  carrier  to  show  court  that  order  of  Interstate 

Commerce  Commission  is  invalid §  132 

not  before  Interstate  Commerce  Commission  may  be  submitted 

in  inquiry  by  court  as  to  orders  of  said  commission §  132 

use  of  process  of  Federal  Circuit  Court  in  aid  of  inquiries  before 

Interstate  Commerce  Commission §  137 

presumption  as  to  citizenship  of  members  of  corporations;  presi- 
dent and  stockholders §  174 

judicial  notice  corporation  incorporated  by  act  of  Congress,  note,  §  211 
waiver  of  failure  to  prove  capacity  of  foreign  corporation  to  sue .  .  §  233 
presumption  as  to  compliance  by  foreign  corporation  with  State 

law §  237 

presumption  as  to  ownership  of  goods  shipped §  243 

to  show  corporation  de  facto;  may  be  necessary §§  247,  248 

suit  by  stockholders  against  directors;  negligence;  maladminis- 
tration     §  264 


INDEX  787 

EVIDENCE— (Continued : 

necessity  of  showing  demand  mikI  iefu;,al;  conditions  precedent 

*o  suit. §5  305,  .306 

presumption  as  to  consideration  for  stock  given  in  payment  of 

property j  2;)4 

of  negligence  as  warehouseman;  when  does  not  warrant  recovery 

for  negligence  of  carrier 5  .3 IS 

proof  of  alleged  trespass  should  connect  defendant  witli  act,  or 

nonsuit  will  be  ordered §  ;j;j(j 

that  factory  operated  as  nuisance §  331 

what  must  be  shown  to  sustain  action  for  fraud  and  deceit §  33'J 

sufficiency  of  showing,  in  mandamus §  3.S1 

sufficiency  of  showing;  quo  warranto, §  ;j!)3 

EX  CONTRACTU, 

whether  stockholders'  hability  arises §  284 

See  Actions  Ex  Contractu;  Election  of  Remedy. 

EX  DELICTO.    See  Actions  Ex  Delicto;  Election  of  Remedy. 

EXECUTION, 

Railroad  Commission  of  North  Carolina  cannot  issue 5140 

returned  unsatisfied  when  and  when  not  condition  precedent  to 
suit;  stockholders'  liabihty §§  307,  30.H 

EXECUTIVE  DEPARTMENT, 

interference  with;  injunction §  428 

EXECUTIVE  OFFICERS, 

may  be  empowered  by  Congress  to  enforce  prescribed  penalties.  §  100 
See  Officers;  Public  Officers. 

EXEMPLARY  DAMAGES, 

against  corporation  for  false  imprisonment §  331 

EXEMPTIONS, 

contract  of,  from  exercising  State's  authority  not  transferable.  .  §  23 

of  agencies  of  Federal  Government  from  taxation §§  65-79 

from  taxation,  effect  of §  68 

of  State  agencies  from  taxation §  69 

of  savings  banks;  taxation  (§  3408,  Rev.  Stat.  U.  S.) note,  §  72 

tax  on  franchises  or  privileges  conferred  by  United  States §  75 

from  taxation;  power  of  State  as  to;  effect  of  consolidation,  etc.  §  79 

from  taxation  does  not  pass  to  purchaser §  79 

under  charter,  inviolate §  79 

from  taxation;  effect  of  consolidation §  79 

bill  in  equity  to  decree  railroad  exempt  from  taxation §  83 

under  charter;  construction  rule  that  what  not  expressly  granted 

is  reserved §  79 

See  Taxation. 


788  INDEX 

EXHAUSTING  REMEDIES.     See  Conditions  Precedent. 

EXPENSES, 

elements  in  fixing  rates §  36 

of  railroad  commission;  taxation  of  railroads  to  pay  same §  76 

EXPRESS  COMPANIES, 

when  definition  of,  does  not  discriminate .      §  21 

rate  rc^gulations §  32 

withiiTi  Hepburn  Act  as  to  publishing  rates §  32 

not  allowed  by  exception  in  Hepburn  Act  to  issue  passes  for  free 

transportation  of  merchandise §  32 

statute  requiring  delivery  to  consignee  free  of  delivery  charges  in 

cities  of  certain  population §  4S 

transportation  of  intoxicating  liquors  into  State;  penalty §  52 

doing  business  in  different  States,  situs  of  tangible  property  for 

purposes  of  taxation §  61 

tax  on  business  done  within  State §  7S 

person  discriminated  against  may  hold  company  liable  in  civil  or 

criminal  action §  314 

fraud  of,  and  of  agent,  inducing  loss  to  shipper §  339 

rate  regulation.     See  Constitutional  Law. 

EXTRATERRITORIAL, 

agreement  violating  Anti-trust  Act;  State  jurisdiction §  455 

effect  of  conspiracy,  etc §  455 

F 

"FACILITIES," 

jurisdiction  of  railway  commissioners  as  to,  of  railway.  .    note,   §  119 
other  facilities §  120 

FACTORY, 

noxious  fumes  from;  injury  to  crops;  nuisance §  334 

FALSE  ARREST, 

liability  for  acts  of  servant note,   §  317 

of  passenger;  when  railroad  company  not  liable  for  act  of  servant.   §  331 

FALSE  IMPRISONMENT, 

liabihty  for  acts  of  servant §  317 

trespass  for,  lies  against  corporation §  331 

when  telegraph  and  telephone  company  liable  for  acts  of  servant.   §  331 

FARM  DRAINAGE  ACT, 

of  Illinois,  when  a  proper  exercise  of  police  power §  24 

FARES.     See  Rates. 


INDEX  789 

FEDERAL  AND  STATE  REGULATIONS, 

as  to  employers  and  employes;  carriers,  etc.;  police  power;  in- 
terstate commerce §  §  26  2i7 

FEDERAL  AGENCIES, 

taxation  of §§  56  e<  .se^. 

or  instrumentalities  of  Federal  Government;  taxation.  .....    §§  65-7!) 

Congress  may  employ  as,  corporations  to  aid  in  execution  of 

powers  to  regulate  commerce §  92 

See  Taxation. 

FEDERAL  CIRCUIT  COURT, 

may  determine  removability  of  cause  and  protect  such  jurisdic- 
tion; injunction §  219 

See  Courts. 

FEDERAL  CIRCUIT  COURT  OF  APPEALS, 

jurisdiction  of,  by  writs  of  error  on  bills  of  exceptiorts.  .  .  .   note,  J  198 

See  Courts. 

FEDERAL  CONSTITUTION.    See  Constitutional  Basis  of  Actions 

and  Defenses. 

FEDERAL  COURT.     See  Courts. 

FEDERAL  GOVERNMENT, 

if  power  of  State  in  conflict  with,  it  must  yield §  2 

and  State  government,  powers  of,  distinguished §  3 

State  governments;  powers  of,  distinguished §  3 

one  of  enumerated  powers §  3 

State  cannot  interfere  with  powers  of §  3 

State  cannot  tax  any  of  the  means  employed  by  former  to  execute 

its  powers §  6!) 

power  to  adopt  quarantine  line §  99 

See  United  States. 

FEDERAL  QUESTION, 

jurisdiction  of  Federal  Court §  S3 

when  exists;  contention  in  State  Court  that  it  has  no  power  to 

grant  relief;  rate  regulation §  133 

when  exists;  jurisdiction notes,  §§  208,  209 

See  Courts;  Jurisdiction  of  Courts. 

FEDERAL  STATUTES.     See  Statutes. 

FEDERAL  SUPREME  COURT, 

action  for  injury  to  brakeman;  review  of  judgment  by.  .  .  .   note,  §  208 

not  controlled  by  decisions  of  State  Court note,   §  219 

See  Courts. 


790  INDEX 

FENCES, 

State  may  require  railroad  companies  to  fence  their  roads §  21 

FERRIES, 

when  State  has  power  to  establish  and  regulate  and  to  fix  tolls .  .  §  33 

when  State  cannot  tax  ferry  franchise §  78 

franchise;  equity  may  prevent  violation  of  right  to  exercise.  ...  §  402 

FIFTH  AMENDMENT.     See  Constitutional  Basis  of  Actions  and 

Defenses. 

FILING, 

answer  and  record;   removal  denied   in  State  Court;  asserting 

affirmative  remedy  and  denial  of  jurisdiction §  218 

See  Certificates. 

FINDINGS, 

of  fact  by  State  Court  conclusive  in  Federal  Supreme  Court §  158 

FINES, 

State  corporation  commission  acts  judicially  as  to §  112 

contempt;  power  of  Interstate  Commerce  Commission §  137 

and  penalties  adjudged  by  North  Carolina  railroad  commission 

cannot  be  enforced  by  it  by  execution §  140 

excessive;  Elkins  Act;  constitutional  law;  liquor  laws;  regulation 

of  carriers §  45g 

See  Criminal  or  Penal  Offenses;  Penalties. 

FIRE, 

communicated  by  locomotive  engines;  statute  may  provide  for 

recovery  of  damages §  30 

loss  by;  action  on  policy  to  recover;  jurisdiction §  83 

damage  to  land  by;  liability  for  acts  of  servant note,  §  317 

FIRE  INSURANCE.     See  Insurance. 

FIRE  INSURANCE  COMPANY, 

articles  defective;  new  company  organized;  liability  of §  255 

See  Insurance. 

FIRE  INSURANCE  POLICY, 

action  on,  by  foreign  corporation;  defense  of  failure  to  obtain 

certificate §  236 

See  Insurance. 

FORCIBLE  ENTRY  AND  DETAINER §  316 

FORECLOSURE, 

foreign   corporations  not  precluded   from  foreclosing  mortgages 

because  of  State  legislation  as  to  doing  business §  20 

of  mortgages &  414 


INDEX  791 

FORECLOSURE— Continued : 

of  liens  or  mortgages;  equity  jurisdiction;  conflicting  claims §  415 

'^fli^ns §§415,410 

of  mortgages;  junior  bondholder;  judgment  creditor;  priorities; 

proceeds  of  sale;  adjustment  of  claim;  accounting §  417 

and  sale  of  railroad  mortgage;  distribution  of  proceeds;  unsecured 

creditors;  bank  as  general  creditor;  prior  mortgagee §  418 

of  railroad  mortgage;  rights  of  purchaser;  title  and  obligations.  .    §  419 
and  sale;  reorganization  agreements  by  purchasers;  exceptiouK 

to  sale;  constitutional  law j  42o 

FOREIGN  ATTACHMENT.     See  Garnishee  Process. 

FOREIGN  CORPORATIONS, 

State  statute  may  put  them  on  same  footing  as  to  service  of 

process   as  domestic  corporation §  14 

returns  to  proper  State  officers  may  be  required §10 

right  of  State  to  prohibit  doing  business  within  its  limits  or  to 

impose  conditions §  IG 

conditions  precedent  imposed  upon §19 

rule  stated  as  to  regulation  and  control  of §  19 

regulation  and  control ;  rule  as  to  power  of  State,  and  limitations 

thereon §  20 

lawfully  doing  business  in  State  not  bound  by  unconstitutional 

statute §  20 

State  tax  may  be  imposed  on §  3 1 

not  bound  by  unconstitutional  law  where  citizen  of  State  not 

bound §  39 

jurisdiction;  suit  for  damages,  etc.,  against §81 

jurisdiction  of  New  York  Municipal  Court note,     §  89 

injunction  lies  to  restrain  revoking  license  of §  128 

when  State  auditor  cannot  be  compelled  to  issue  certificate  to  do 

business note,  §  129 

obtaining  jurisdiction  of §  181 

doing  business  or  having  agent  or  office  in  State ;  service  of  process 

note,  §  181 

right  to  sue note,   §  227 

waiver  of  failure  to  allege  and  prove  capacity  to  sue §  233 

parties §  -^tJ 

suit  by,  in  Federal  Court  in  State  in  which  statute  not  complied 

with §  23G 

presumption  of,  compliance  by,  with  State  law §  237 

FOREIGN  JUDGMENT, 

based  on  void  insurance  contract;  no  defense J  88 

FORFEITURE, 

State  Corporation  Commission  acts  judicially  in  determining  lia- 
bility of  corporation  to  fine  or §11- 


79^  INDEX 

FORFEITURE— Continued : 

of  charter;  effect  of  on  right  to  sue  or  be  sued §§  239,  240 

of  franchise  as  defense §  247 

of  franchises,  right  of  stockholders  to  sue  in  equity  in  Federal 

Court  for  surplus  assets  after  decree  of §  269 

of  charter;  quo  warranto  to  forfeit;  ouster §  3S0 

of  property  under  Anti-trust  Act;  equity  cannot  decree §  403 

of  franchises;  injunction  to  prevent §  429 

FORGERY, 

of  name  on  pension  check;  United  States  as  party  plaintiff  in  suit 

against  bank §  252 

of  payee's  name  on  pension  checks;  right  of  United  States  to  re- 
cover from  bank §  252 

FORM  OF  ACTION, 

effect  of  Code  provisions,  generally >-. §  313 

contract  or  tort;  election  of  remedy §  319 

FOURTEENTH  AMENDMENT.    See  Constitutional  Law. 

FRANCHISES, 

tax  on;  power  of  State  to  impose  as  conditions  precedent  on 

foreign  corporations .  §  16 

as  element  in  fixing  rates §  36 

value  of,  at  time  of  capitalization;  elements  in  fixing  rates §  36 

of  corporation  when  to  be  exercised  in  subordination  of  power  of 

Congress  to  regulate  interstate  commerce §  42 

of  corporations,  when  not  derived  from  United  States  are  subject 

to  State  taxation §  60 

taxation  of;  interstate  commerce §  61 

annual  tax  on  railroads  for  privilege  of  operating §  62 

State  may  tax  at  different  rate  from  tangible  property §  67 

cover  large  proportion  of  valuable  property  and  subject  to  tax- 
ation   §    67 

franchise  tax  in  name,  levied  on  bank  property ;  power  of  State  to 

levy §  71 

tax  on,  of  corporation  for  right  to  do  business §  74 

when  tax  on  savings  societies  constitutes  tax  on §  74 

or  privileges  conferred  by  Congress;  taxation §  75 

taxation  of,  based  upon  capital  stock §  77 

tax  on  when  not  contravention  of  commerce  clause  and  Four- 
teenth Amendment §  78 

tax  on  "  corporate  franchise  " §  78 

special  franchise  tax;  certiorari  to  review §  124 

in  hands  of  receivers;  equity  jurisdiction  to  protect §  167 

effect  of  abandonment  of  in  suit  by  stockholders §  240 

forfeiture  of  as  a  defense §  247 


INDEX  793 

FRANCHISES— Continued : 

suit  by  abutting  ownor  to  enjoin  u  street  railway  company  from 

accepting j  258 

right  of  stockholders  to  sue  in  equity  in  a  Federal  Court  for  sur- 
plus assets  after  decree  of  forfeiture  of §  2«*> 

unlawfully  exercised  quo  warranto  lies §  :},s 'i 

quo  warranto  to  forfeit  or  annul  or  test §  :iH(> 

quo  warranto  to  forfeit  only  unused  franchise  and  leave  corpora- 
tion intact J  3^^7 

right  to  exercise  ferry;  equity  may  prevent  violation  of  right §  402 

contract  for  co-operation  in  procuring;  validity  of;  public  policy; 

equity;  when  remedy  at  law  adequate §  407 

injunction  to  protect  or  to  prevent  forfeiture §  429 

FRANKING.    See  Hepburn  Act. 

FRAUD, 

equity  jurisdiction  in  cases  of §  IG.3 

in  assignment  to  give  jurisdiction §§  194^  i<)5 

in  joinder  of  parties;  removal  of  cause §  215 

on  public;  consolidation  to  prevent  competition;  injunction  re- 
fused      §  234 

when  not  proper  remedy ;  subscription  agreement;  promoters §  259 

subscription   to   stock;   promoters,  fraud,  actual  or  constructive 

not  shown §  259 

on  creditors;  stock  issued  for  property;  stockholders  liable §  296 

new  right  of  action ;  enforcement  of,  by  Federal  Courts §  402 

See  Equity;  Fraud  and  Deceit. 

FRAUD  AND  DECEIT, 

prospectus  to  induce  subscriptions  to  or  sale  of  stock,  etc. .  .note,  §  339 

who  and  who  not  entitled  to  sue §  339 

instances  of J  339 

action  for ;  instances §  339 

essential  elements  of §  339 

statements  in  prospectus  for  sale  of  stock,  etc §  339 

what  must  appear  or  be  shown  to  sustain  action  for note,  §  339 

FRAUDULENT, 

act  of  majority  stockholders;  relief  in  equity  to  minority.  .   note,  §  266 
See  Damages;  Equity;  Fraud;  Pleadings;  Evidence. 

FREIGHT, 

rates;  when  statute  as  to,  in  conflict  with  Interstate  Commerce 

Act §  32 

Hepburn  Act  does  not  allow  express  companies  to  issue  passes  for 

free  transportation  of  merchandise §  32 

business  of  landing  and  receiving  is  inci(l<Mit  to  transportation,  tax_ 

upon  same 5  <>1 


794  INDEX 

FREIGHT— Continued : 

taxation  of  capital  stock  of  corporations  engaged  in  transportation 

of §  62 

what  is  not  a  pooling  of;  agreement  between  initial  and  connecting 

carriers §  104 

FREIGHT  AGENT, 

of  railroad   company  not  in  possession  of  property,  except  as 
agent;  replevin  does  not  lie  against §  341 

FUNDS, 

power  "  to  receive,  hold  and  manage  "  implies  power  to  sue  for . .  .    §  227 

misappropriation  of.  by  directors;  parties  to  action  for §  263 

for  dividends;  suits  by  stockholders  against  trustees  of;  defenses; 

counterclaim  §  270 

"FURTHER  CIVIL  AND  CRIMINAL  JURISDICTION," 

defined  §  89 


G 

GARNISHEE, 

when  judgment  by  default  will  not  protect §  88 

duty  of  to  notify  absent  creditor  of  pendency  of  attachment  pro- 
ceedings       §  88 

GARNISHEE  PROCESS, 

judgment  by  default  when  will  not  protect  garnishee §  88 

GARNISHMENT, 

effect  of  assignee  under  invalid  assignment §  106 

GAS, 

rate  statute  establishing  one  rate  for  city  and  another  for  indi- 
vidual consumers  not  unreasonable;  classification §  14 

rates,  elements  in  fixing §  36 

rates,  regulation  of §  38 

plants;  special  commission  hear  and  adjudicate  when  city  pur- 
chases      §  102 

company;  excessive  rates  may  be  recovered  back §  314 

GOODS, 

in  possession  of  carrier;  action  against  by  consignor §  243 

"GOOD  WILL," 

when  excluded  as  element  in  fixing  rates §  36 

GOVERNMENT, 

powers  of  Federal  and  State  distinguished §  3 


INDEX  795 

GOVERNMENTAL  AGENCIES.    See  Congrese;  Federal  Agoncies; 

Powers. 

GOVERNOR, 

as  party  to  suit  to  establish  railroad  lease |  250 

GRADE  CROSSINGS, 

jurisdiction  of  railroad  commissioners;  apportionment  of  expense 

^^ §121 

See   Railroads. 

GRAIN, 

regulation  for  warehousing  and  inspection 5  57 

See  Warehouses. 

GRAND  JURY, 

statute  for  production  of  books  and  papers  includes note,       §  4 

production  of  books  by  corporation  before;  power  to  compi'i; 
courts;  contempt 5  138 

GRANT, 

State  cannot  grant  away  its  right  to  regulate  rates §  32 

of  power  to  railroad  to  fix  rates  does  not  preclude  State  from  there- 
after fixing  rates 1  §  32 

right  of  State  to  bargain  away  right  to  fix  water  rates §  37 

GRAVE, 

disturbance  of;  trespass  quare  clausum  f regit §  330 

freehold  right  in  soil;  trespass  for  disturbing  grave §  330 

See  Cemetery. 

GUARDIAN, 

citizenship  of  in  suit  against  corporation §  185 

H 

HARBOR  COMMISSIONERS, 

jurisdiction  of  board  of,  and  of  courts  over  them §  125 

HEALTH, 

State  may  establish  quarantine  laws  for  protection  of §  58 

HEARING  AND  NOTICE, 

enforcement   by  Secretary   of  Commerce   and    Labor,   without 
judicial  trial;  of  penalty  on  transportation  company §  100 

HEPBURN  ACT, 

exception  in  does  not  allow  express  companies  to  issue  passes  for 
free  transportation  of  merchandise §  3 


796  INDEX 

HEPBURN   ACT— Continued: 

express  companies  required  by,  to  publish  rates §  32 

relates  to  all  charges  made  by  carrier;  proceedings  against  con- 
necting carriers §  35 

construction  of  commodities  clause  of §  49 

object  or  purpose  of §  49 

moving  commodities  in  interstate  commerce,  when  not  prohibited  §  49 
commodities  clause  is  regulation  of  commerce  within  power  of 

Congress  to  enact §  49 

HEWITT  ACT, 

when  does  not  create  irrevocable  contract;  impairment  of  obliga- 
tion of  contract note,     §  68 

HIDES, 

State  law  as  to  inspection  of §  58 

HIGHWAYS, 

State  may  impose  entire  expense  of  change  of  grade  at  crossing .  .     §  21 
See  Grade  Crossings. 

HORSES, 

frightened;  liability  for  acts  of  servant note,    §  317 


ILLEGALITY, 

of  tax  as  a  defense;  no  injunction : §  164 

See  Taxation. 

IMMIGRANT, 

penalty  against  transportation  company  for  bringing  in  aliens 
with  contagious  diseases §  100 

IMPLIED  CONTRACT, 

assumpsit *  ^•^l 

IMPLIED  POWERS, 

what  are note,  §  223 

of  corporation  include  right  to  sue  and  be  sued §  227 

to  arbitrate  from  power  to  sue  and  be  sued §  231 

IMPRISONMENT, 

contempt;  power  of  Interstate  Commerce  Commission §  137 

INCIDENTAL  POWER, 

of  corjwration,  nature  and  extent  of §  223 

of  corporation  includes  right  to  sue  and  be  sued §  227 


INDEX  797 

INCOME, 

as  element  in  fixing  rates «  oc 

INCORPORATION, 

of  company;  estoi)pcl  to  deny §§  247  248 

INCUMBRANCE, 

upon  property  within  district;  jurisdiction  of  Federal  Circuit  Court 
to  remove 8  1 68 

INDEBITATUS  ASSUMPSIT ' §  32i 

INDICTMENT, 

corporation  may  be  indicted §  44^^ 

of  corporations  for  nuisances §  447 

combinations  and  conspiracies s  44^ 

corporation  cannot  be  guilty  of  manslaughter  under  New  York 

Penal  Code s  45Q 

sufficiency  of. §  457 

INFECTION, 

of  cattle;  action  for  damages  for note,     §  99 

INFRINGEMENT, 

of  patents;  in  what  district  suits  for  should  be  brought- note,  §  161 

INJUNCTION, 

to  restrain  maintenance  of  telegraph  line;  State  statute  granting 
exclusive  right  to,  must  not  conflict  with  Post  Road  Act §  2 

authorized  by  Elkins  Act  for  departure  from  published  rates.  ...     §  32 

against  enforcing  order  of  Interstate  Commerce  Commission  as 
to  terminal  charges note,     §  35 

dismissed  where  suit  brought  before  rate  regulation  took  effect .  .     §  36 

to  restrain  transportation  of  coal ;  commodities  clause  of  Hepburn 
Act §  49 

suit  when  maintainable  under  Hepburn  Act  although  penalty 
provision  exists  which  is  alleged  to  be  unconstitutional §  49 

to  restrain  depositing  tailings  from  mine,  in  river  bed;  definition 
of  jurisdiction  applied §  81 

suit  to  enjoin  certification  of  assessed  value  of  property;  jurisdic- 
tion       §  81 

to  restrain  railroad  commission  from  approving  and  certifying 
assessment  for  taxes §  83 

to  restrain  revenue  agent  from  bringing  or  advisin;  suit  to  be 
brought  against  railroad  company §  83 

against  Interstate  Commerce  Commission note,  §  106 

Interstate  Commerce  Commission  denied  power  of  injunction  note,  §  106 

to  restrain  railroad  commission  from  enforcing  ord(T  to  erect  and 

maintain  railroad  station §  120 

against  collection  of  taxes note,  §  123 


798  INDEX 

IN  JU  NCTION— Continued : 

resolution  of  city  council  requiring  street  railway  to  replace 
tracks,  etc §  126 

may  be  had  to  prevent  superintendent  of  insurance  from  re- 
voking license  of  foreign  insurance  company §  12S 

does  not  lie  against  officer  of  land  department §  129 

to  restrain  enforcement  of  order  of  Interstate  Commerce  Com- 
mission ;  terminal  changes note,  §  132 

to  restrain  railroad  companies  from  putting  into  effect  unlawful 
rate §  134 

against  railroad  commission  not  within  Federal  statutes  against 
injunctions  to  stay  proceedings  in  State  Court §  140 

to  prevent  running  street  railway  cars  at  intervals  of  time  less 
than  schedules §  141 

when  equity  will  enjoin  enforcement  of  ordinance  reducing  fares 
on  street  railroads §  146 

to  restrain  enforcement  of  schedule  of  rates  published  by  railroad 
commissioners §  150 

lies  to  prevent  railroad  commission  from  proceeding  to  fix  rates .  .   §  151 

should  not  be  sought  until  rate  has  been  fixed  by  body  having 
last  word §  151 

court  cannot  restrain  in  advance  the  action  of  railroad  commis- 
sion as  to  rates §  151 

to  restrain  enforcement  of  maximum  rates  by  commission;  when 
constitutional  question  not  decided §  153 

rehef  by  should  not  be  sought  until  rate  has  been  fixed  by  body 
having  last  word §  155 

against  attorney-general  not  suit  against  State note,  §  155 

none  to  restrain  illegal  tax §  164 

to  restrain  collection  of  taxes;  generally §  164 

suit  by  State;  jurisdiction  of  Federal  Supreme  Court §  186 

restraining  collection  of  illegal  tax;  State  statute  as  to  does  not 
govern  Federal  Courts note,  §  198 

taxation  of  railroad  property  Federal  question;  jurisdiction. note,  §  208 

to  restrain  railroad  company  putting  tariff  schedule  into  effect; 
jurisdiction  of  Circuit  Court §  209 

not  granted  by  Federal  Courts  to  stay  proceedings  in  State 
Courts note,  §  219 

by  Circuit  Court  forbidding  further  proceedings  in  State  Court .  .    §  219 

suit  for;  corporation  as  necessary  parties §  229 

to  restrain  furnishing  electric  light;  consolidation  to  prevent  com- 
petition; fraud  on  pubUc §  234 

against  railway  or  electric  line  in  street;  right  of  abutting  owner 
to ". §242 

to  restrain  corporation  from  doing  business  in  State;  should 
be  brought  by  attorney-general §  251 

to  restrain  construction  street  railway;  abutting  owners  and 
attorney-general  as  plaintiffs §  251 


INDEX  709 

INJUNCTION— Continued: 

restraining  corporation  from  acting  as  such;  State  proper  party.   §  2')! 

against  street  railway  to  restrain  acceptance  of  franchise .    §  '25H 

against  trolley  company  illegally  constructing  road;  suit  by  tax- 
payer    §  258 

against  breaking  up  of  street  pavement;  corporation  may  sue.  .  .   §  258 
against  creation  of  new  corporation;  suit  by  minority  Btockholdcra  §  2()7 

suit  of  stockholder  to  prevent  ultra  vires  act §  2«i8 

to  restrain  infringement  tiade-mark;  suit  by  stockholder §  2f)S 

to  restrain  removal  of  ore  from  mine §  404 

to  remove  obstruction  created  by  bridge  in  and  over  navigable 

river §  404 

insurance  company  when  member  of  mutual,  may  invoke  equity 

to  redress  or  prevent  wrong  affecting  corporation §  40-1 

to  restrain  corporation  from  paying  tax;  suit  by  stockholder.  ...    §  404 

generally;  when  Hes;  instances §  421 

jurisdiction §  422 

See  Equity. 

INJURIES, 

territorial  power  to  legislate  concerning §  5 

See  Personal  Injuries 

INSOLVENCY, 

State  statute;  when  does  not  conflict  with  Federal  statute  as  to 

national  banks §66 

of  corporation  does  not  affect  its  corporate  existence §  23i) 

of  corporation;  effect  of §§  239,  240 

insolvent   foreign   corporation;   corporation  necessary  party  in 

suit  against  stockholders §  228 

INSPECTION, 

of  corporation  books;  mandamus;  jurisdiction  defined  and  ap- 
plied     §  83 

of  logs  by  surveyor  general §  93 

of  corporation  books ;  mandamus  to  compel §  362 

right  of,  of  corporation  books;  penalties  for  refusal  to  allow.  ...  §  441 

INSPECTION  REGULATIONS, 

inspection  of  logs  by  surveyor  general §  93 

interstate  commerce;  police  power  as  to §  58 

when  liquors  have  ceased  to  be  articles  of  interstate  commerce.  §  59 

as  applied  to  oil;  interstate  commerce §  59 

INSTRUMENTALITIES  OF  FEDERAL  GOVERNMENT, 

Federal  and  State  control;  national  banks §§  65,  66 

INSURANCE, 

State  may  prohibit  combinations  to  fix  rates §  16 


800  INDEX 

INSURANCE— ContimieJ : 

returns  to  proper  State  officerg  mav  be  required §  16 

companies;  regulation  and  control §  16 

statute   cutting  off  defense  of  false  and   fraudulent   statements 

in  applications;  is  valid §  17 

measure  of  damages  on  fire  policies  may  be  regulated  by  State.  .  §  17 
contract  of;  effect  with  relation  to  statutory  liability  to  em- 
ployes    §  26 

business  is  not  commerce §  55 

stocks  may  be  taxed  on  income  instead  of  value §  71 

police  power;  requiring  returns  from §  78 

action  on  policy  of;  jurisdiction §  83 

action  to  recover  amount  of  fire  loss;  jurisdiction  over  subject- 
matter  defined §  88 

contract  void;  judgment  based  on,  wlicn  no  defense §  88 

delegation  of  power  to  commission  to  draft  standard  form  of  fire 

policy;  unconstitutional §  97 

trust  fund  in  hands  of  State  auditor;  jurisdiction  of  courts §  128 

company;  action  for  debt  for  penalty §  324 

INSURANCE  COMPANIES, 

franchise  subject  to  regulation  by  State;  conditions  precedent.  .     §  16 

foreign  corporation;  obtaining  jiirisdiction  of §  181 

State  statute  as  to  removal  of  suit  by  to  Federal  Court,   effect 

of §  198 

combinations;  conspiracies;  insurance  as  "commodity";   when 

and  when  not  indictable  offenses §  448 

INTERNAL  MANAGEMENT, 

of  corporations;  general  rule  as  to  court  interfering  with §  260 

of  corporations;  general  rule;  stockholders  suit §  260 

INTERNAL  REVENUE.     See  Taxes. 

INTERNAL  REVENUE  TAXES, 

United  States  as  party  plaintiff  in  suit  to  recover §  252 

INTERSTATE  BRIDGES.     See  Bridges. 

INTERSTATE  COMMERCE.  See  various  names  by  which  stat- 
utes relating  to  are  designated.  See  Constitutional  Basis  of 
Actions  and  Defenses;  Stock;  Taxation. 

INTERSTATE  COMMERCE  ACT, 

joint  through  rate;  duty  and  liability  of  connecting  carrier §  35 

embraces  whole  field  of  interstate  commerce §  44 

protects  cars  not  delivered  to  consignee,  though  standing  on 

track §47 

supersedes  State  legislation  on  same  subject §  48 


INDEX  801 

INTERSTATE  COMMERCE  COMMISHION, 

order  of,  as  to  terminal  charges;  injuruition  granted note,     §  35 

findings  of,  that  rate  unreasonable;  errors  of  law;  when  left  open 

for  further  action §  ^q 

nature  and  powers  of «  jqj 

action  of,  not  judicial «  jqIj 

invested  only  with  administrative  powers §  103 

not  a  court 6  ]  O'i 

is  neither  Federal  Court  nor  docs  it  exercise  judicial  powers §  103 

conclusions  of,  do  not  possess  efficacy  of  judicial  proceedings.  .  .    §  103 

has  quasi  judicial  powers note    §  103 

functions  are  those  of  r(>ferees  or  special  commissioners  to  make 

preliminary  investigation  and  report §  103 

has  legal  capacity  to  he  party  plaintiff  or  defendant  in  Federal 

Courts §  103 

is  body  corporate §  103 

hears,  investigates  and  reports  upon  complaints  before  it §  103 

judicial  proceedings  contemplated  as  remedy  for  enforcement  of 

its  orders §  1 03 

when  private  car  company  subject  to  jurisdiction  of;  unlawful 

rates;  rebates §  104 

right  of  initial  carrier  guaranteeing  through  route  to  reserve  right 

to  route  goods  beyond  own  terminal §  104 

instances  of  exercise  of  jurisdiction  by §  105 

may  determine  reasonableness  of  established  rate §  10(5 

no  power  to  prescribe  rates  maximum,  minimum  or  absolute.  ...   §  lOli 
what  factors  it  should  consider  in  passing  upon  rates,  rebates,  etc.  §  10(3 
may  determine  whether  services  rendered  were  like  and  con- 
temporaneous, etc §  106 

jurisdiction  of  courts  in  respect  to;  generally §  131 

findings  of;  force  and  effect  of §§  131,  132 

jurisdiction  of  Federal  Courts  in  respect  to §§  131-130 

practice  and  procedure;  remanding  cause  to §  135 

regulation  of  carriers  as  to  cars;  where  redress  must  first  be 

sought;  jurisdiction  of  courts §  135a 

use  of  process  of  Federal  Court  in  aid  of  inquiries  before;  testi- 
mony;   production    of   books,    etc.;   fine    and    imprisonment; 

contempt;  power  of  commission §  137 

enforcing  order  of;  P^ederal  question;  jurisdiction note.  §  208 

mandamus;  limitation  of  remedy  under  act  to  regulate  commerce.  §  3().S 
injunction  to  restrain  enforcement  of  order  of §  433 

INTERSTATE  RIVER, 

jurisdiction  of  action  for  loss  by  death  from  drowning  in;  juris- 
diction  note,     §  90 

INTERSTATE  TRAINS, 

stopping  same;  jurisdiction  of  railroad  commission §  118 

51 


802  INDEX 

INTER  VENOR, 

when  petition  claiming  lien  insufficient §  88 

right  of  creditor  as  in  suit  by  receiver §  285 

See  Parties. 

INTOXICATING  LIQUORS, 

prohibition  against  bringing  them  into  State;  interstate  commerce     §  51 

State  exclusion  of;  C.  O.  D.  shipments §  52 

exclusion  of,  by  State;  interstate  commerce;  "arrival";  original 

package;  Wilson  Act §§  53,  54 

State  may  control  sale  of,  by  dispensary  system §  54 

pohce  power  to  regulate  sale  or  determine  purity  of §  54 

inspection  regulations  when  liquors  have  ceased  to  be  articles  of 

interstate  commerce §  59 

See  Liquor  Laws. 

INTRASTATE, 

and  interstate  commerce;  when  departmental  orders  as  to,  not 

divisible  .  .    note,     §  99 

IRREPARABLE  INJURY.     See  Equity. 

J 

JOINDER, 

of  suits  in  equity  with  action  at  law  against  directors §  262 

as  defendants  of  company  and  stockholder  owing  for  stock;  action 

on  insurance  policy §  290 

See  Parties 

JOINT  ACTIONS, 

removal  of §§  213,  214,  215,  216 

torts;  separable  controversy;  removal  of  suits §  214 

fraudulent  joinder;  removal  of  suits;  separable  controversy.  .  .  .    §215 

non-removal  of;  fraudulent  joinder;  separable  controversy §  215 

separable  controversy;  removal  of  suits;  what  record  must  show.  §  216 

JOINT  STOCK  COMPANY, 

when  not  a  party  for  jurisdictional  purposes §  175 

in  England  may  maintain  action  for  libel  against  shareholder .  .   §  335 

JUDGES, 

cannot  be  compelled  when  acting  judicially  to  exercise  legislative 
powers,  when §  5 

JUDGMENT, 

cannot  be  rendered  curing  constitutional  defect  in  eminent  do- 
main statute §  5 

of  Federal  Courts  possess  every  attribute  of  finality §  82 


INDEX  803 

JUDGMENT— Continued : 

iia  bar  to  action;  definition  r)f  jiirisdietion  applied  §82 

when  cannot  be  collaterally  inipeached  on  certiorari §83 

res  adjudicala;  defense  of,  not  available  on   motion  to  diHniiBH 

appeal §  S3 

by  default,  when  will  not  protect  garnishee §  88 

based  on  void  insurance  contract,  when  no  defense §  88 

rendered  without  jurisdiction;  foreign  judgment § 88 

of  board  of  equalization;  conclusiveness  of  orders §§  122,  123 

extent  of  review  of,  by  Federal  Supreme  Court §  l.W 

suit  by  assignee  of;  jurisdiction  of  Federal  Courts §  ISO 

in  State  Court;  when  a  final  one §  204 

of  State  Court  denying  defense;  review  by  Federal  Supreme 

Court §  208 

and  execution  returned  unsatisfied;  conditions  precedent  to  suit; 

stockholders'  liability §§  307,  308 

in  mandamus §  38 1 

or  sentence;  effect  of;  prohibition §  390 

See  Default. 

JUDGMENT  CREDITORS, 

stockholders'  liability  to,  for  unpaid  stock;  parties §  290 

right  to  sue;  parties;  conditions  precedent §  311 

rights  of;  foreclosure  of  mortgages §  417 

JUDICIAL  NOTICE, 

court  would  take,  of  fact  that  cattle  run  at  large  in  the  west.  ...     §  58 
corporation  incorporated  by  act  of  Congress note,  §  21 1 

JUDICIAL  POWERS.     See  Powers. 

JUDICIARY  ACT, 

of  March  3,  ISOl;  what  is  jurisdiction  referred  to  in §  157 

of  1801  as  to  appeals  taken  to  Federal  Sui)r('uie  Court §  150 

of  1S88;  original  jurisdiction  of  Federal  Circuit  Courts  under.  ...  §  101 

of  !870;  vested  equity  jurisdiction  in  Federal  Courts §  163 

of  1887-1888  did  not  repeal  §  S  of  the  act  of  1875 §  168 

of  1888;  jurisdiction  of  Federal  Circuit  Courts  under;  removal 

of  suits §  205 

JUNIOR  BONDHOLDERS, 

rights  of  on  foreclosure §  417 

JURISDICTION, 

state  cannot  pa.ss  laws  having  force  or  effect  over  i)(>rsons  beyond .       §  •! 

no  State  or  Territory  can  pass  laws  having  force  or  effect  o\(>r  per- 
sons or  property  beyond §  1 

of  taxing  officers  not  taken  away  by  lack  of  provision  in  tax  law 
for  notice S  "07 


804  INDEX 

JURISDICTION— Continued: 

averment  as  to  "jurisdiction  of  the  case"  held  sufficient §  82 

commencement  of  action §  83 

of  person  acquired  if  actually  served  with  summons,   though 

service  irregular §  83 

suit  against  State  though  nominally  against  individual §  83 

acquired  though  writ  defective,  or  service  of  summons  defective.  .  §  83 

may  be  acquired  though  pleading  defective §  83 

over  person  when  not  essential  to  action  at  law §  83 

of  subject-matter;  when  acquired §  83 

over  person  or  subject-matter;  essentials §  83 

of  action  for  loss  by  death  from  drowning  in  interstate  river. note,  §  90 

as  applied  to  a  State  or  to  City  Council §  90 

See  Jurisdiction  of  Courts. 

JURISDICTION  AND  VENUE;  DEFINITIONS, 

definition  of  jurisdiction §  80 

definition  of  jurisdiction  continued;  nature  of  corporation  cases  in 

which  given  or  apphed;  instances §§  81,  82,  83 

"general  jurisdiction  in  law  and  equity"  defined §  84 

"full  jurisdiction  in  all  matters  of  equity"  defined §  85 

concurrent  jurisdiction  defined §§  82,  86 

jurisdiction  in  "special  cases"  defined  and  construed §  87 

subject-matter  and  jurisdiction  over  it  defined §  88 

definitions;   "civil"  and  "criminal"  jurisdiction;  "further  civil 

and  criminal  jurisdiction." §  89 

jurisdiction  as  applied  to  a  State  or  to  city  council §  90 

venue  defined §  91 

JURISDICTION  OF  COURTS  OVER  CORPORATIONS, 

essential  or  prerequisites  of; §  156 

action  on  fire  insurance  policy §  83 

when  acquired;  action  for  penalty  for  failure  to  signal  at  railroad 

crossing §  83 

in  "special  cases"  defined  and  construed §  87 

of  New  York  Municipal  Court note,     §  89 

jurisdiction  of  Court  of  Claims  of  New  York ;  negligence  causing 

death;  nonresidents  as  parties;  State  as  common  carrier §  171 

subject-matter  of  fixed  character  in  different  districts  of  same 

State note,  §  168 

of  mandamus  proceedings §  374 

of  quo  warranto  proceedings §  389 

prohibition   to   court  without  jurisdiction  or  where  it  exceeds 

jurisdiction §  399 

of  State  over  violation  of  antitrust  law;  where  agreement  made 

out  of  State;  extraterritorial  effect  of  conspiracy,  etc §  455 

equity  jurisdiction;  generally §  162 

equity  jurisdiction;  adequate  remedy  at  law §  163 


INDEX  805 

JURISDICTION    OF    COURTS    OVi^R    CORPORATIONS-Con- 

timied: 

equity  jurisdiction;  adequate  remedy  at  law;  colleetion  of  taxes; 

injunction n  jj. . 

equity  jurisdiction;  waiver  of  defense  of  remedy  at  law §  Kirj 

equity  jurisdiction  to  remove  cloud  upon  or  to  quiet  title §  IC.Z 

when  equity  has  no  jurisdiction  of  bill  to  recover  laiidH  of  railrotul 

company ^  ,-,, 

of  equity;  election  of  corporation  directors §  102 

when  equity  without;  .s^cnerally §  .}()•; 

in  equity;  generally;  parties §  .jOj 

of  equity  to  protect  pn.perty  rights  of  corporation  at  suit  of 

member  of  mutual  insurance  company §  404 

injunction §  422 

of  Federal  Courts  a  delicate  matter  to  deal  with note,  §  1")5 

of  Federal  Courts  limited §  ><2 

Federal  Courts  are  not  inferior  courts §  j^2 

essentials  of,  of  FeJeral  Courts §  s;i 

jurisdictional  amount;  Federal  Courts §  SH 

Federal  Courts;  absence  from  records  of  jurisdictional  facts  is 

immaterial §  SO 

whether  corporation   subject   to  adjudication   as  bankrupt   not 

jurisdictional  question §  S2 

failure  to  allege  compliance  with  Equity  Rule  94 §  s;} 

equity  jurisdiction  of  Federal  Courts;  generally §  lt;2 

equity  jurisdiction  of  Federal  Courts;  parties §  l(j(» 

to  enjoin   prosecuting  action  in  another  Slate;    jurisdiction  of 

Federal  Court;  injvuiction  from  to  State  C'ourt §  423 

of  Federal  Court;  right  of  corporation  to  proceed  against  bridge 

as  nuisance §  402 

Federal  Supreme  Court;  questions  arising  under  Federal  Con- 
stitution and  laws §  83 

Federal  Supreme  Court;  appeal  and  error;  fundamental  question 

is  jurisdiction §  1.57 

Federal  Supreme  Court;  question  of  arising  on  face  of  record  ....   §  157 
jurisdiction  of  Federal  Supreme  Court;  Federal   question;  pre- 
sentment by  record;  special  allegation   §  158 

findings  of  fact  of  State  Court  conclusive  in  Federal  Supreme 

Court §  158 

jurisdiction;  appeals  taken  after  1891  to  Federal  Supreme  Court.   §  159 
original,  of  Federal  Supreme  Court  to  grant  injunction  in  case  of 

bridge  constituting  obstruction  to  navigation §  404 

jurisdiction  of  Federal  Circuit  Court  of  Appeals;  when  invoked; 

diverse  citizenship §  1*>0 

in  what  district  suits  for  infringement  of  patents  should   be 

brought  "ote,  §  IGl 

original  jurisdiction  of  Federal  Circuit  Courts  under  Judiciary 

Act  of  1888 §  1<51 


806  INDEX 

JURISDICTION  OF   COURTS  OVER  CORPORATIONS— Con- 
tinued : 
jurisdiction  of  Federal  Circuit  Court  to  remove  incumbrance  or 
lien  or  cloud  upon  title  to  property  within  district;  absent  de- 
fendants; process;  service;  publication §  168 

of  Federal  Circuit  Court  over  bill  to  quiet  title  and  remove 

cloud §  402 

equity  jurisdiction  of  Federal  Circuit  Courts;  probate  matters; 

diverse  citizenship §  169 

what  constitutes  controversy  or  dispute  between  parties;  juris- 

'liction  of  Federal  Circuit  Court;  citizenship §  172 

when  corporation  is  and  is  not  a  citizen;  pleadings §  173 

prosamption  as  to  citizenship  of  members  uf  corporation;  presi- 
dent and  stockholders §  174 

citizenship;  joint-stock  company  not  a  corporation  for  jurisdic- 
tional purposes §  175 

citizenship;  limited  partnership  not  a  corporation  for  jurisdictional 

purposes §  176 

citizenship;  board  of  trustees  not  a  corporation  for  jurisdictional 

purposes §  177 

citizenship  of  corporation  of  two  or  more  States;  ancillary  or 

permissive  charters  or  license §  178 

removal  of  causes  to  Federal  Courts;  corporation  of  two  or  more 

States §  179 

citizenship;  consolidated  corporations §  180 

when  Federal  Court  has  jurisdiction;  corporation;  doing  business; 

process;   service §  181 

over  foreign  corporation;  doing  business  or  having  agent  or  office 

in  State;  service  of  process note,  §  181 

obtaining  jurisdiction  over  foreign  corporations §  181 

jurisdiction  of  justice  of  the  peace;  condemnation  proceedings.  .     §  81 
when  Federal  Court  no  jurisdiction;  corporation;  doing  business.  §  182 

where  plaintiffs  citizens  of  different  States §  183 

citizenship;  territory  divided  into  two  States §  184 

jurisdiction  of   Circuit   Court;   citizenship  of  guardian  in  suit 

against  corporation §  185 

citizenship  of  State;  diverse  citizenship §  186 

suit  by  State  for  injunction §  186 

jurisdiction;  where  "found";  suit  to  restrain  enforcement  un- 
reasonable rates  by  railroad  corporation §  187 

jurisdiction;  transitory  action  of  trespass;  parties  residents  of 

other  States  than  that  of  suit §  188 

when  Federal  Courts  no  jurisdiction  of  suit  by  assignee  of  chose 

in  action;  assignment  of  jutlgment §  189 

jurisdiction  of  Federal  Courts;  suit  by  assignee;  inquiry  relates 

to  time  when  suit  is  brought §  190 

jurisdiction  of  Federal  Courts;  suits  by  assignee  of  promissory 
note  or  chose  in  action;  exception  to  statutory  prohibition.  .   §  191 


INDEX  807 

JURISDICTION  OF  COURTS  OVER  CORPORATIONS-Con- 

tinued: 

when  Federal  Courts  have  jurisdiction  of  suits  by  assignee §  192 

when  Federal  Court  no  jurisdiction  of  suit  by  assignee;  contract 

to  convey  land k  jy^ 

selection  of  administrator  to  obtain note    5  194 

when  transfer  by  partncrsliip  not  a  sham  to  oust  court  of.  .   note,  §  llH 

when  purpose  of  corporation  to  invoke note,  §  194 

motive  for  bringing  suit  or  in  obtaining  citizenship;  collusive 

assignment  or  transfer  or  fraud  to  give  jurisdiction §  194 

same  subject;  when  jurisdiction  defeated §  195 

jurisdiction;  rearrangement  of  parties;  diverse  citizenship §196 

of  Federal  Courts  over  crimes note,  §  197 

nature  of  jurisdiction  of  national   courts;  extent  of  resort  to 

common  law §  1 97 

Federal  jurisdiction;  effect  of  State  statutes;  rights  and  remedies.  §  198 
power  of  State  to  limit  jurisdiction  of  its  courts;  power  to  ad- 
minister cummon  law §  199 

of  Circuit  Court  of  Appeals  by  writs  of  error  on  bills  of  excep- 
tions  note,  §  198 

of  Federal  Courts  as  affected  by  noncompliance  with  State  Jaws 

note,  §  198 

of  Federal  Courts  as  affected  by  State  laws note,  §  198 

Federal  Courts  where  a  maritime  lien  exists note,  §  198 

power  of  State  to  limit  jurisdiction  of  its  courts;  power  to  ad- 
minister common  law §  199 

jurisdiction;  consent  of  parties §  2(X) 

jurisdiction;  appearance;  consent;  waiver §  201 

effect  on,  of  appearance note,  §  201 

waiver  of  jurisdictional  defect  as  to  particular  district §  202 

subsequent   change   in   conditions   after  jurisdiction   of   Circuit 

Court  has  attached §  203 

where  case  goes  more  than  once  to  highest  State  Court;  final 

judgment;  writ  of  error §  204 

jurisdiction  of  Federal  Circuit  Courts  under  Judiciary  Act  of 

1888;  removal  of  suits §  205 

removal  of  suits;  what  record  must  show §  200 

no  cause  removable  unless  it  is  one  of  which  Circuit  Courts  given 

original  jurisdiction §  207 

Federal  question  or  right;  when  court  has  jurisdiction;  instances.  §  208 
Federal  question  or  right;  when  court  no  jurisdiction;  instances.  .   §  209 

presentment  of  Federal  question;  record §  210 

removal  of  suits;  corporation  created  by  Congress;  Constitution 

and  laws  of  United  States;  separable  controversy §  211 

removal  of  suits;  corporations  created  by  Congress;  national  banks.  §  212 

removal  of  suits;  separable  controversy;  joint  action §  213 

removal   of   suits;   separable   controversy;   joint   action;    torts; 
diversity  of  citizenship §  214 


808  INDEX 

JURISDICTION  OF  COURTS  OVER  CORPORATIONS— Con- 
tinued : 

removal  of  suits;  separable  controversy;  joint  action;  fraudulent 
joinder §  215 

removal  of  suits;  separable  controversy;  joint  action;  what  record 

must  show §  2 1 T) 

denial  of  petition  for  removal;  petitioners'  right  to  elect  remedy.  §  217 

removal  of  suit  denied  in  State  Court;  filing  answer  and  record; 

asserting  affirmative  remedy  and  denial  of  jurisdiction §  21S 

Federal  Circuit  Court  may  determine  removability  of  cause  and 
protect  such  jurisdiction;  injunction §  219 

effect  upon  jurisdiction  of  State  Court  of  removal  of  cause §  220 

jurisdiction  of  Federal  Supreme  Court  after  removal  ordered  by 

Circuit  Court §  221 

See  Equity  Jurisdiction. 

JURISDICTION  OF  COURTS  OVER  CORPORATION  SUPER- 
VISORY COMMISSIONS  OR  BODIES, 

jurisdiction  of  boards  of  equalization;  conclusiveness  of  decisions 
of;  review  by  courts §  123 

jurisdiction  of  courts;  certiorari  to  review  assessment;  special 
franchise  tax;  requirements  as  to  return  by  tax  commissioners.  §  124 

board  of  harbor  commissioners;  jurisdiction  of  courts §  125 

resolution  of  city  council  and  direction  to  city  solicitor  to  enforce 
same  against  street  railway;  obligation  of  contract;  jurisdic- 
tion of  Federal  Circuit  Court;  injunction §  12(5 

condemnation  proceedings;  commissioners;  State  crossing  board; 

jurisdiction  of  courts;  waiver §  127 

jurisdiction  of  courts;  insurance;  State  auditor;  superintendent 

of  insurance §  128 

jurisdiction  of  officers  of  Land  Department;  control  and  super- 
vision of,  by  courts;  mandamus;  injunction §  129 

same  subject;  railroads;  right  of  way §  130 

jurisdiction  of  courts  in  respect  to  Interstate  Commerce  Com- 
mission; generally §  131 

jurisdiction  of  Federal  Courts  in  respect  to  Interstate  Commerce 
Commission ;  rates §§  132,  133 

same  subject;  injunction;  where  redress  must  first  be  sought.  .  .    §  134 

same   subject;    compensation    of   carrier;    services    rendered   at 

shipper's  request;  practice  and  procedure;  remanding  case.  ...   §  135 

jurisdiction  of  Federal  Courts  in  respect  to  Interstate  Commerce 
Commission;  regulation  of  carriers  as  to  cars;  where  redress 
must  first  be  sought §  135a 

jurisdiction  of  Federal  Courts  in  respect  to  Interstate  Commerce 
Commission;  shipper's  indebtedness  for  demurrage;  refusal  of 
carriers  to  receive  goods §  130 

use  of  process  of  Federal  Circuit  Court  in  aid  of  inquiries  before 
Interstate  Commerce  Commission;  testimony;  production  of 


INDEX  809 

JURISDICTION  OF  COURTS  OVER  CORPORATION  SUPER- 
VISORY COMMISSIONS  OR  BODIES— Corn iimcd: 
books,  etc.;  fine  and  imprisonment;  cf)ntempt;  power  of  com- 
mission    *  22y 

judicial  functions  of  nonjudicial  bodies;  power  to  compel  cor- 
porations to  produce  books,  etc.;  notice;  courts;  due  process 
and  equal  protection;  contempt;  compensation  to  witness..  . .   §  138 

jurisdiction  of  courts  in  respect  to  railroad  conuui.xsioiis;  jieiierallv 

§§  VM,  140,  141 

jurisdiction   of   courts;   railroad   commis.sioner.s;    Publicr   Service 

Commission;  certificate  of  public  couvenicncc  aiul  necessity.  .    §  142 

jurisdiction  of  courts  over  rate  rcKulations;  generally.  ...      §§  14;i,  144 

legislative  and  judiitial  functions  as  to  rate  rejrulation;  distinc- 
tions      §  145 

equity  jurisdiction;  railroad.s,  etc.,  rates;  obligation  of  contracts; 
injunction;  discrimination §  14G 

extent  of  judicial  interference  as  to  rate  regulations §  147 

jurisdiction  of  courts  before  rate  legislation  eoes  into  effect.  ...    §  148 

jurisdiction  of  courts  in  respect  to  railroad  commissions;  rates 

§§  149, 150 

same  subject;  where  resort  must  first  be  had §  151 

same  subject;  appeal  to  State  Supreme  Court  lief  ore  suing  in 

Federal  Circuit  Court §  152 

jurisdiction  of  courts  in  respect  to  railroad  commissions;  rates; 
when  constitutional  question  not  decided §  153 

Public  Service  Commi.ssion;  right  to  appeal;  certiorari;  nature 
of  powers §  1 54 

jurisdiction  of  courts;  suit  against  railroad  commissioners; 
whether  suit  agaiast  State §  155 

JURISDICTION  OR  POWER  OF  CORPORATION  SUPER- 
VISORY COMMISSIONS  OR  BODIES, 

jurisdiction  or  power  of  supervisory  bodies  or  agencies;  delega- 
tion of  power;  generally §  92 

jurisdiction  of  power  of  supervisory  bodies  or  agencies;  delega- 
tion of  power;  general  instances §  93 

jurisdiction  of  powers  of  assessment  board;  railroads;  due  process 
of  law ;  interstate  commerce §  94 

jurisdiction  of  power  of  supervisors,  aldermen  or  other  legislative 
bodies  of  cities,  towns,  etc.,  as  to  water  rates;  mandamus.  ...     §  95 

power  of  commission  as  to  standard  fire  jiolicy §  97 

jurisdiction  or  power  of  court  of  visitation;  telegraph  and  railroatl 

lines §  ^^ 

powers  of  Secretary  of  Agriculture;  regulation  of  commerce; 
quarantine  regulations §  99 

Secretary  of  Commerce  and  Labor;  enforcement  by,  without 
judicial  trial,  of  penalty  of  transportation  company;  notice 
and  hearing;  civil  and  criminal  action §  100 


810  INDEX 

JURISDICTION    OR    POWER    OF    CORPORATION    SUPER- 
VISORY COMMISSIONS  OR  BODIES— Continued: 

power  of  Secretary  of  State ;  reinsurance  contract §     H 

special  tribunal;  "s]jecial  commission"  to  hear  and  adjudicate, 

not  a  "court";  gas  and  electric  plant §  102 

jurisdiction    of    Interstate    Commerce    Commission;    nature    of 

powers  of §  103 

jurisdiction  of  Interstate  Commerce  Commission;  rates;  rebates; 

discrimination §§  104,   105 

jurisdiction  of  Interstate  Commerce  Commission;  rates;  pro- 
mulgation of  general  orders §  lOG 

jurisdiction  of  Interstate  Commerce  Commission;  carriers'  dis- 
criminatory regulations;  railroad  equipment;  coal  car  distribu- 
tion      §  106a 

power  of  State  as  to  railroad  and  like  commissions §§  107,  lOS 

same  subject;  power  to  remove  or  suspend  commissions §  109 

jurisdiction  and  power  of  railroad  and  like  commissions;  generally 

§§  no,  111 

nature  of  jurisdiction  and  power  of  railroad  commissions §  112 

jurisdiction  of  railroad  commissions;  rates §§  113,  114 

when  railroad  commission  is  without  jurisdiction;  rates §  115 

jurisdiction  of  railroad  commission;  increase  of  capital  stock  of 

corporations §  116 

jurisdiction  of  Public  Service  Commission;  issue  of  stocks  and 

bonds  by  corporation §  117 

jurisdiction  of  railroad  commission;  stopping  interstate  trains.  .    §  118 
jurisdiction  of  railroad   commission;  interstate  commerce;  de- 
livery of  cars;  train  connections §  119 

jurisdiction    of    railroad    commissions;    railroad    station;    other 

facilities;  obligation  of  contract;  due  process  of  law §  120 

jurisdiction  of  railroad  commissions;  railroad  or  grade  crossings; 

apportionment  of  expense  of §  121 

jurisdiction  of  railroad  commissions;  telegraph  companies;  in- 
stalling telephone §  122 

See  Corporation  Commission ;  Railroad  and  Warehouse  Commis- 
sion; Railroad  Commission;  Railroad  Companies;  Railway 
Commission. 

JUSTICE  OF  THE  PEACE, 

jurisdiction;  condemnation  proceedings §  81 

K 

"KITING," 

checks §  339 

L 

LABOR, 

regulation  and  control  of  hours  of §  18 


LABOR— Continued: 

Congress;  powor  of,  to  regulate  hours  of 


INDEX  gji 
§  2() 


on  public  works;  regulation  of  hours  of §27 

regulation  of  hours  of Z    ' 

„  §  J7 

bee  Secretary  of  Commerce  and  Labor 

LABOR  ORGANIZATION, 

act  of  Congress  as  to  discharge  of  employe'  because  member  of .  .     §  20 

LAND, 

damages  to  by  overflow  of  canal;  jurisdiction;  "special  cases".  .  .   §  87 

in  different  districts  of  same  State;  jurisdiction note,  §  lOS 

of  railroad  company;  when  equity  has  no  jurisdiction  of  bill  U, 

recover s  1 70 

stock  issued  in  payment  of §§  29;^  29 1 

entry  upon  and  injury  to;  trespass  quure  clmisum  f regit §  3;jo 

trespassed  upon;  description  of  land  in  quare  duusum /regit §  Sm 

prospectus  of  promoter  as  to  value  of note,  §  339 

LAND  COMMISSIONERS, 

State  Board  of  Jurisdiction §  129 

LAND  DEPARTMENT, 

officers  of;  control  and  supervision  of  by  courts;  mandamus; 

injunction §  I29 

courts  cannot  interfere  with  decisions  of §§129,  130 

LANDOWNER, 

when  cannot  maintain  ejectment  against  railroad  company  but 

restricted  to  action  for  damages §  315 

when  precluded  from  maintaining  ejectment  for  portion  of  right 

of  way  of  railroad &  315 

» 

LAW, 

and  Constitution  of  United  States  supreme  law  of  land §  2 

"general  jurisdiction  in  law  and  equity"  defined §  84 

adequate  remedy  at  equity;  jurisdiction §§  1C3,  104 

corporation  has  remedy  at,  to  redress  wrongs  of  promoters §  259 

LAW,  ACTIONS  AT, 

form  of  action;  effect  of  Code  provisions,  generally §  313 

form  or  effect  of  New  York  Code  provisions,  generally §§2(51,  204 

actions  under  statutes,  generally §  314 

ejectment §  315 

forcible  entry  and  detainer §  310 

liability  of  corporations  to  third  persons  for  negligent,  willful, 

wanton  or  malicious  acts  of  corporations,  generally §  317 


812  INDEX 

LAW,  ACTIONS  AT— Continued : 

negligent  acts  of  corporations,  generally §318 

liability  of  corporation  in  action  at  law  for  personal  injuries  sus- 
tained by  passenger;  negligence §  318 

election;  form  of  action  contract  or  tort;  waiver §  319 

for  damages  by  pledgor  where  pledgee  wrongfully  parts  with  prop- 
erty      §  341 

See  Actions  Ex  Conlraclu;  Actions  Ex  Lcliclo;  see  names  of  various 

actions 

LEASE, 

suit  to  set  aside  by  minority  stockholders §  2GG 

action   to  redeem   leased   premises;   jurisdiction   of   New  York 

municipal  court note,     §  89 

suit  by  owner  of  railroad  stock  to  cancel §  IGS 

of  railroad;  suit  to  establish  State  ofl;ccrs  as  parties §  250 

fixing  rates;  when  party  no  such  interest  in  as  to  invoke  aid  of 

equity §  404 

suit  by  stockholder  in  equity  to  require  lessee  to  account,  etc. ...   §  404 

LEGAL  CURRENCY, 

may  be  subject  of  action  of  trover §  340 

LEGISLATION, 

of  State  must  not  conflict  with  Federal  Constitution  and  laws.  .  .  §  2 
powers  of  State  as  to,  with  reference  to  Federal  Constitution 

and  laws §  3 

Federal  Court  does  not  forbid,  to  exercise  judicial  powers §  4 

court's  duty  to  see  that  no  right  impaired  or  destroyed  by §  4 

legislative  proceedings  not  proceedings  in  court  within  meaning 

of  Revised  Statutee,  §  720 §  5 

See  Powers. 

LEGISLATIVE  DISCRETION, 

exi,ent  of;  judicial  i)owers §  4 

LEGISLATIVE  POWERS.     See  Powers;  States. 

LEGISLATURE, 

when  act  of  is  challenged,  court 's  inquiry  limited  to  question  of 

power §  4 

presumption  is  that  it  will  not  assume  judicial  functions  to  it.self .  .  §  4 
when  act  of  challenged  in  court  presumption  is  that  legislature 

never  intends  to  interfere  with  action  of  courts §  4 

of  territory,  Congress  h.as  revisory  power  over  legislation §  5 

may  sui)ject  corporations  to  reasonable  regulations  from  time  to 

time §  0 


INDEX  813 

LEGISLATURE— Cent  inucd : 

may  regulate  and   control  public  employment  ami  j)roperty  in 

connection  then!with s  (j 

may  prescribe  reasonable  regulations  of  corfwrations §  (5 

discretion;  exercise  of  police-  power §10 

power  to  alter  or  amend  charter  of  Public  Service  Corporations .  .  §  22 

cannot  grant  away  right  of  State  to  regulate  rates §  ;52 

power  of  to  cure  defective  organization;  corporation  dc  faclo.  ...  §  21<j 
See  Constitutional  Basis  of  Actions  and  Defenses;  Police  Power. 

LESSEE, 

of  property  of  railroad  as  plaintiflf  to  bill  in  equity  where  rail- 
road sought  to  be  taxed §  33 

Buit  by  stockholder  to  compel  successor  in  interest  of  to  pay  rental 
guaranteed  by  dividends §  271 

suit  by  stockholders  to  compel  successors  in  interest  of,  to  pay 
rent  reserved §  27 1 

suit  in  equity  to  compel  lessee  of  corporation  to  account,  etc. ...   §  404 

LETTER, 

action  for  writing  libelous,  to  protective  trade  association §  335 

LEVEE  BOARDS, 

may  sue  and  be  sued §  2ni'^ 

whether  pubhc  or  private  corporations  may  sue  and  be  sued ....    §  2.")(» 
where  ejectment  for  land  appropriated  by  does  not  lie §  •j15 

LEVEE  DISTRICT, 

when  is  a  public  corporation §  256 

or  levee  boards  whether  public  or  private;  corporations  may  sue 

and  be  sued §  256 

may  sue  and  be  sued §  256 

LIABILITY, 

hmitations  of;  liberty  to  contract §  12 

of  corporations  for  acts  of  promoters,  generally §  259 

individual,  of  officers  and  directors  to  creditors  where  capital 
stock  not  subscribed;  suit  in  equity  by  creditors  against  ili- 

rectors §  265 

generally,  of  officers  or  directors  of  corporations;  parties §  261 

of  nonresident  stockholder §  2S)) 

of  stockholders;  pleading;  what  must  be  shown;  generally §  2S7 

of  stockholders  to  creditors;  unpaid  sul)script  ions  or  stock. .  .  §§  2SS,  2S<) 

of  stockholders;  unpaid  subscriptions;  parties §  2<K) 

of  stockholders  to  creditors  where  stock  receivovl  without  con- 
sideration or  for  less  than  its  value;  "bonus  stock." §  291 

of  corporations  to  third  persons  for  negligent,  willful,  wanton, 

or  malicious  acts  of  servants §  317 


814  INDEX 

LIBEL, 

liability  for  acts  of  servant note,  §  317 

and  slander §  335 

action  for  lies  aganist  corporation §  335 

what  does  not  constitute note,  §  335 

LIBERTY  TO  CONTRACT.     See  Contract. 

LICENSE, 

of  foreign  insurance  company;  injunction  to  prevent  revoking.  .   §  128 

LICENSE  FEE, 

charge  for  filing  articles  of  consolidation  of  corporations §  60 

of  foreign  corporation;  waiver  of  objection  of  failure  to  pay.  ...    §  233 
of  foreign  corporation ;  pleading  defense  of  failure  to  pay .  .   note,  §  230 

LICENSE  TAX, 

power  of  State  to  impose  on  foreign  corporations §  16 

LIEN, 

for  wages  of  corporation  employes  may  be  given  by  statute.  ...     §  27 
in  maritime  cases;  State  statute  declaring,  does  not  oust  Federal 

jurisdiction  of  maritime  liens note,  §  198 

attachment,  may  be  protected  in  equity §  402 

enforcement  of;  foreclosure;  parties §§  415,  416 

See  P'oreclosuro;  Mechanic's  Lien. 

LIFE  INSURANCE.     See  Insurance. 

LIFE  INSURANCE  COMPANY, 

suit  against,  effect  of  dissolution  on §  239 

suit  by  policy  holder  against,  for  accounting  and  receivership .  .    §  276 

LIMITATION  OF  LIABILITY, 

of  carriers;  right  of  State  to  augment  or  limit §  29 

injury;  interstate  transportation;  effect  of §  47 

LIMITATIONS, 

on  police  power;  general  principles  as  to  extent  of §  8 

of  time  for  adjustment  of  claims  against  them  by  railroads §  30 

as  to  reasonableness  of  rates §  34 

as  to  rates;  terminal  charges  by  carrier;  proceedings  against 

connecting  carrier;  discrimination;  joint  through  rate §35 

insurance  policy  limitation  as  to  time  of  bringing  suit;  when  not 

a  bar §  83 

of  remedy  under  act  to  regulate  commerce;  Interstate  Commerce 

Commission ;    mandamus §  367 

See  Liability;  Statute  Limitations. 


INDEX  815 

LIMITED  PARTNE1?HHIP, 

not  a  corporation  for  jurisdictional  jjurporfCB §  176 

LIQUOR  LAWS, 

regulation  of  carriers;  Elkins  Act;  constitutional  law;  excessive 

fines §  456 

See  Intoxicating  Liquors 

LIVE  STOCK, 

Federal  statute  to  insure  humane  treatment  of,  by  carriers §  28 

State  may  provide  for  damages  against  railroads  for  killing.  .  .        §  30 
killed  by  train ;  action  for §  242 

LOAN, 

to  de  facto  corporation ;  action  to  recover §  245 

LOCOMOTIVE  ENGINEERS, 

examination  and  licensing  of §  27 

LOGS, 

illegally  obtained  cannot  be  replevied  by  boom  company §  341 

inspection  of,  running  out  of  boom §  59 

inspection  of,  by  survejor  general . §  93 

LONG  AND  SHORT  HAULS, 

rate  regulation §§40,  41 

application  to  railroad  commission note,  §  115 

Federal  Circuit  Court  may  revic-w  findings  of  Interstate  Com- 
merce Commission §  132 

relief  in  "special  cases"  by  railroad  commissioners;  refusal  not 
reviewable  by  courts §  150 

M 

MACHINE  SHOP, 

corporation  organized  to  operate  may  sue  for  work  done §  227 

MALADMINISTRATION, 

negligence;   suit   by  stockholders  against  directors;   averments 

necessary;  what  must  be  shown §  264 

of  directors.     See  Directors. 

MALICE, 

corporation  may  act  maliciously note,  §  335 

corporation  liable  for  malicious  acts §  36 

MALICIOUS  ABUSE  OF  PROCESS, 

civil  or  criminal;  action  for  damages  lies §  331 


816  INDEX 

MALICIOUS  PROSECUTION, 

jurisdiction  of  New  York  municipal  court note,     §  89 

liability  for  acts  of  servant note,  §  317 

action  for,  lies  against  corporation §  336 

MANDAMUS, 

transportation  of  coal;  commodities  clause  of  Hepburn  Act.  ...     §  49 
to  inspect  corporation  books;  jurisdiction  defined  and  applied.  .     §83 
when  does  not  lie  to  control  discretion  of  commissioner  of  water- 
works as  to  "lowest  and  best"  bidder §  95 

to  railroad  commission;  increase  of  capital  stock note,  §  116 

does  not  lie  against  officer  of  Land  Department §  129 

defense  by  railroad  company  that  rates  are  unreasonable §  139 

when  properly  brought  in  name  of  State §  251 

defined  §  342 

nature  of  mandamus §  343 

nature  of,  continued ;  is  a  discretionary  writ §  344 

when  mandamus  lies,  generally §  345 

to  control  judicial  discretion §  346 

will  not  be  granted  when  fruitless  and  unavailing §  347 

does  not  lie  where  there  is  a  plain  and  adequate  remedy §  348 

statutory  remedies;  when  and  when  not  exclusive  of  mandamus.  §  349 
when  is  the  proper  remedy  although  there  is  another  remedy; 

action  for  dam.age ;  equity §  350 

when  remedy  is  by  action  at  law  and  not  by  mandamus §  351 

when  proper  remedy  is  quo  warranto  and  not  mandamus §  352 

when  remedy  to  forfeit  franchise,  and  not  mandamus,  is  proper.  §  353 
when  remedy  in  equity  and  not  by  mandamus;  injunction;  manda- 
tory injunction §  354 

enforcement  of  private  or  personal  rights;  contractual  relations.  .   §  355 

when  writ  lies  to  enforce  discretionary  or  ministerial  duties §  356 

when  writ  does  not  lie  to  enforce  discretionary  duties §  357 

when  lies  and  does  not  lie  to  compel  filing  articles  of  incorporation 

and  certification;  issuance  of  certificates §  358 

when  lies;  election  of  corporate  officers §  359 

when  lies  to  compel  order  revoking  charter  to  be  vacated §  360 

when  lies  to  reinstate  member §  361 

lies  to  enforce  right  of  inspection  of  books  of  corporation §  362 

lies  to  compel  surrender  of  corporation's  books,  seal  and  papers.  §  363 

to  compel  transfer  of  certificates  of  stock;  lost  certificates §  364 

to  control  rates,  charges  and  fares;  discrimination §  365 

when  lies  against  common  carrier,  generally §  366 

limitation  of  remedy  under  act  to  regulate  commerce;  Interstate 

Commerce    Commission §  367 

when  lies  and  does  not  lie  against  railroad  company §  368 

when  lies  and  does  not  lie  against  street  railroad  company §  369 

when  street  railway  company  is  and  is  not  entitled  to  mandamus.  §  370 
when  lies  and  does  not  lie  against  telephone  companies §  371 


INDEX 


817 


MANDAMUS— Continued: 

when  lies  and  does  not  lie  against  telegraph  companies §  37-> 

where  hes  and  does  not  lie  against  water  companiea §  373 

jurisdiction  of  mandamus  proceedings 5  374 

proper  or  necessary  parties,  generally .........  ^675 

parties  plaintiff;  private  persons S  37J3 

parties;  attorney-general «  ..-,y 

parties;  defendants 


necessity  of  demand  upon  or  notice  to  party  before  bringing 


378 


mandamus ^  ..-.^ 

defenses  available,  generally i  -^^q 

pleadings;  sufficiency  of  showing;  demurrer;  judgment;  ajjpeal  .   §  381 

MANSLAUGHTER, 

liability  of  corporation  for  acts  of  servant note,  §  317 

corporation  cannot  be  guilty  of,  under  New  York  Penal  Code.  .'  §  450 

MARGINS.     See  Sales. 

MARITIME  LAW, 

where  lien  under  exists;  jurisdiction  of  Federal  Courts note,  §  198 

State  legislature  cannot  change  or  modify note,  §  198 

MARITIME  LIEN, 

jurisdiction  of  Federal  Courts  as  to note,  §  198 

MASTER  AND  SERVANT, 

State  has  power  to  change  or  modify  relations  of §  26 

Federal  and  State  regulations  as  to §  26 

acts  of  Congress  relating  to  employes  of  carriers,  as  to  liability 

of  latter  and  hours  of  labor §  26 

Employers'  Liability  Act  of  Congress §  26 

statute  making  railway  companies  liable  for  negligence  of  fellow 

servants  §  26 

contracts  of  insurance  or  for  relief  of  employ <5;  effect  of  statute 

making  corporation  liable  for  negligence §  26 

discrimination;  fellow  servants  and  different  classes  of  employes 

note,     §  26 
criminal  offense;  discharge  of  employ 6  when  member  of  labor 

organization ;  act  of  Congress §  26 

State  may  provide  for  protection  of  railroad  employes §  27 

State  regulation  as  to  payment  monthly  of  employes §  27 

right  of  recovery  by  employes  of  railroad §  29 

liabiHty  of  corporation  for  negligent,  willful  and  malicious  acts 

of  servant §317 

trespass  on  case  and  not  trespass  is  the  proper  form  of  action  for 

injuries  by  negligence  of  servant  of  coriioration §  328 

See  Locomotive  Engineers. 

52 


818  INDEX 

MEASURE  OF  DAMAGES.     See  Damages. 

MECHANICS.     See  Labor;  Master  and  Servant. 

MECHANICS'  LIENS, 

liberty  of  contract  when  not  interfered  with §  12 

action  to  enforce;  jurisdiction §  81 

subject-matter  of  jurisdiction  held  not  the  particular  mining  lode 

but  the  lien  upon  that  lode §  88 

action  to  enforce;  subject-matter  and  jurisdiction  over  it  defined.  §  88 

MEMBERS, 

of  corporation;  presumption  as  to  citizenship  of §  174 

mandamus  to  reinstate §  360 

of  mutual  insurance  company;  when  may  invoke  equity  jurisdic- 
tion to  redress  or  prevent  wrongs  affecting  corporation §  404 

MERGER, 

not  by  fact  of  stockholders  in  different  corporations  being  same.  §  226 

MILEAGE  TICKETS, 

powers  of  railroad  commission  as  to note,  §  113 

MINES  AND  MINING, 

regulation  and  control  of §  18 

regulation  of  hours  of  labor  of  miners §  27 

when  corporation  chartered  principally  for,  is  a  railroad  company 

under  Hepburn  Act §  49 

action  to  enforce  mechanic's  lion  against;  jurisdiction §  81 

injunction    to    restrain   depositing  tailings,   etc.,   in  river  bed; 

definition  of  jurisdiction  applied §  81 

action  to  enforce  mechanic's  lien;  subject-matter  and  jurisdiction 

over  it  defined §  88 

petition  to  enforce  lien  when  insufficient  to  be  subject  of  order 

or  decree §  88 

when  assumpsit  does  and  does  not  lie  to  recover  value  of  oil 

mined §  321 

trespass  for  mesne  profits  lies  to  recover  value  of  oil  mined §  329 

false  statements  in  prospectus;  when  action  for  fraud  lies §  339 

person  liable  for  conversion  of  ores,  not  to  be  credited  with  cost  of 

mining  said  ores  §  340 

right  of  person  in  possession  of  surface  of  mining  claim  to  sue  in 

equity  to  quiet  title     §  404 

MINING  CLAIM, 

quieting  title  to;  Federal  question;  jurisdiction note,  §  208 

MINING  CORPORATION, 

suit  to  remove  cloud  on  shares  to;  parties;  Federal  Circuit  Court.    §  168 


INDEX  819 

MINORITY  STOCKHOLDER,     See  Stockholder. 
MINORS, 

employment  of  children  under  certain  age;  ofTenaca;  penalties.  . .   §  449 

MISREPRESENTATIONS, 

defense  by  life  insurance  companies  as  to  cutting  olT  statute;  valid.     §  1 7 

in  prospectus c  ...,„ 

action  for  fraud  and  deceit §  -i-m 

MONEY, 

belonging  to  charitable  institutions;  ta.xation;  banks §  71 

no  equity  jurisdiction  to  restore  to  corporations §162 

received  by  directors;  liability  for  after  dissolution §  261 

as  subject  of  action  of  trover j  34q 

had  and  received.    See  Assumpsit. 

MONOPOLIES, 

act  of  Congress  of  1890  against note,     §  11 

MORTGAGEE, 

prior  mortgagee,  rights  of.    See  Foreclosure, 
remedy  where  plant  on  which  mortgage  is,  is  sold  by  order  of  court 
to  city §  102 

MORTGAGES, 

held  by  foreign  corporations;  State  cannot  preclude  foreclosure 

for  noncompliance  with  tax  laws  as  to  doing  business §  20 

bondholder  as  party  plaintiff  in  equity  where  railroad  sought  to  be 

taxed §  83 

sale  of  gas  and  electric  plant  to  city  subject  to;  city's  obhgation 

as  to  the  bonds  and  interest §  102 

jurisdiction  of  Federal  Courts  of  by  assignee  of §  192 

enforcement  of;  foreclosure;  rights  and  remedies;  parties..    §414,415 
foreclosure  and  sale  of  railroad  mortgage;  distribution  of  pro- 
ceeds;   unsecured   creditors;   bank   as  general  creditor;   prior 

mortgagee §418 

See  Foreclosure. 

MOTION, 

to  dismiss  appeal;  defense  of  res  adjudicata  not  available  on .    .   .     §  83 

to  dismiss  for  want  of  jurisdiction;  "special  cases" §  87 

to  quash  certiorari  to  review  determination  of  commission  may 

be  made  in  Appellate  Division  of  New  York  Su|)renie  Court       §  lo4 
to  dismiss  not  proper  to  raise  defense  that  suit  against  commis- 
sion is  suit  against  State §  l'^"' 

for  bringing  suit  or  in  obtaining  citizenship;  jurisdiction.  .  .§§  194,  195 

MULTIFARIOUSNESS, 

what  necessary  to  sustain  objection  of §  229 


820  INDEX 

MULTIPLICITY  OF  SUITS, 

as  result  of  enforcement  illegal  tax;  equity  jurisdiction §  167 

Sec  Equity. 

MUNICIPAL  COUNCILS, 

courts  may  restrain  unlawful  exercise  of  legislative  or  administra- 
tive powers §  5 

See  City  Council. 

MUNICIPAL  COURTS.     See  Courts. 

MUNICIPALITIES, 

may  make  reasonable  regulations  as  to  use  of  street  by  street 

railroad  companies §  21 

legislation  by,  void  if  it  impairs  obligation  of  contract §  22 

agreements  between;  and  railroad  companies  as  to  viaducts  over 

crossings;  power  of  State  to  supervise  and  control §  24 

apportionment  by  State  of  expense  of  grade  crossings  may  be 

made  through §  24 

power  of  to  (;ompel  city  to  repair  viaduct §  25 

power  of  to  compel  railroad  companies  to  remove  or  lower  tunnels 

under  navigable  river  at  company's  expense §  2ii 

delegation  to  of  power  to  regulate  charges  of  common  carriers ...  §  93 
joint  control  with  railroad  commissions  as  to  use  of  streets  by 

street  railways;  when  may  act  alone §  96 

purchase  of  gas  or  electric  light  plant  by;  "special  commission  "  to 

hear  and  adjudicate §  102 

jurisdiction  of  Circuit  Court;  validity  of  contract  between  water 

company  an(  1 §  208 

as  party  to  suit;  obstruction  in  street §  251 

suit  by  in  respect  to  acts  of §  258 

N 

NATIONAL  BANKS, 

Federal  agencies;  State  control  of §  65 

usury  by ;  effect  of §  66 

as  agencies  of  Federal  Government §§  65,  66 

State  statutes  as  to  preferences   by   insolvents;    when   does   not 

conflict  with  Federal  statutes §  66 

taxation  §  71 

investments  by;  taxation §  71 

difference  in  methods  of  assessment  of  and  of  State  banks;  when 

not  discrimination §  71 

limitation  of  doctrine  governing  taxation  of,  applies  to  tax  on 

shares  of  stock §  77 

residence  of note,  §  181 

statute  assessing  shares  of;  judgment  as  to;  Federal  Supreme 

Court  no  power  to  review §  209 


INDEX  821 

NATIONAL  BANKS— Continued: 

removal  of  suit  by §  212 

State  bank  converted  into;  right  to  sue  in  former  name §  2:i2 

liability  of  for  promise  of  promoter §  259 

holder  of  shares  of  as  shareholder §  277 

liability  of  stockholders  of  conditional §  282 

may  maintain  assumpsit §  ;i2U 

NATIONAL  COURTS.    See  Courts. 

NATIONAL  GOVERNMENT.     See  Federal  Government;  Consti- 
tutional Law;  States. 

NAVIGABLE  WATERS, 

power  of  State  over  bridges  over note,  §  2 

when  State  cannot  tax  ferry  franchise §  78 

taxation  of  railroad  bridge  company  operating  bridge  over §  78 

NAVIGATION, 

ordinance  requiring  construction  of  tunnels  under  river;  when 

does  not  amount  to  a  contract  under  con.stitution §  22 

right  of  railroad"  companies  to  maintain  tunnels  under  navigable 

river  subject  to  right  of  public §  25 

control  of  navigable  waters  by  Congress §  56 

what  navigable  waters  of  United  States  include §  56 

bridge  as  nuisance;  jurisdiction §  402 

See  Navigable  Waters. 

NEGLIGENCE, 

of  fellow  servants;  statute  making  railway  companies  liable  for.  .     §  26 

causing  death;  action  for;  definition  of  jurisdiction  applied §  82 

joint  action  for;  removal  of  suit §  214 

joint  action;  separable  controversy;  removal  of  suits §  214 

action  for  injury  caused  by;  effect  of  di.s.solution  of  corporation.  .   §  240 

action  by  consignor  for. §  244 

maladministration;  suit  by  stockholders  against  directors;  aver- 
ments necessary;  what  must  be  shown §  264 

liability  of  corporations  for,  generally §  318 

liability  of  corporation  to  third  persons  for  negligent,  willful  or 

malicious  acts  of  servants §  317 

as  warehouseman,  when  does  not  warrant  recovery  for  negligence 

of  carrier. §  318 

action  against  water  company  for  damages  resulting  from §  327 

NEW  YORK  CODE  CIVIL  PROCEDURE, 

parties  defendant  under  to  suits  in  -equity §  229 

provision  of  as  to  action  against  directors  of  corporation  con- 
strued  ; §  261 

action  under  against  directors  for  nedigent  waste;  pleading  §  264 


822  INDEX 

NONRESIDENT  STOCKHOLDER, 

liability  of §  286 

NONRESIDENTS, 

owners  of  corporate  stock;  tax  on  transfers  of  stock §  68 

as  parties  in  Court  of  Claims  in  New  York §  171 

NONSUIT, 

when  granted;  trespass  for  injury,  etc.,  to  trees  and  timber §  330 

NOTES, 

bank  notes,  obligations,  securities,  etc.,  of  United  States;  savings 
banks;  taxation §§  72,  73 

NOTICE, 

lack  of  provision  in  tax  law  as  to  does  not  take  away  jurisdiction 

of  taxing  officer §  67 

of  proposed  assessment  of  property §  68 

duty  of  garnishee  to  notify  absent  defendant  of  pendency  of 

attachment  proceedings §  88 

and  hearing;  enforcement  by  Secretary  of  Commerce  and  Labor 
of  penahy,  without  judicial  trial,  on  trans^iortation  company.  .    §  100 

to  corporation  produce  books  before  grant!  jur>';  contempt §  138 

statute  directing  manner  of  service  of  notice  upon  carrier  when 
proceeded  against  by  railroad  commission  is  not  unconstitu- 
tional     §  139 

necessity  of  to  party  before  bringing  mandamus §  379 

NUISANCES, 

corporations  liable  in  damages  for  maintenance  of §  334 

action  at  law  for  damages  for  maintaining;  lies §  334 

action   to  prevent  or  abate  when   not    "special   case"   within 

jurisdiction  of  such  cases §  87 

party  to  suit  to  abate §  229 

by  electric  line  in  street;  right  of  abutting  owner §  242 

maintained  by  servants  of  corporation;  latter  liable  in  damages.  .    §  334 

bridge  as;  jurisdiction  of  Federal  Supreme  Court §  402 

injunction §§  431,  432 

injunction;    parties;    State    or    attorney -general;    corporations; 

joinders §  432 

indictment  of  corporations  for §  447 

See  Bridges. 

o 

OBLIGATION    OF    CONTRACT.     See  Contract;   Constitutional 
Basis  of  Actions  and  Defenses. 

OFFENSES, 

State  law  as  to  inspection  of  hides , §  58 


INDEX  823 

OFFENSES— Continued : 

against  United  States s  443 

single  continuous  offense;  criminal  law;  place  of  trial;  Eikins 

Act;  discrimination  in  rebates s  453 

See  Criminal  or  Penal  Offenses. 

OFFICERS, 

courts  may  restrain  exercise  unlawfully  of  legislative  or  adminis- 
trative powers  by  executive  officers §  5 

and  agents  of  banks;  criminal  offenses;  power  of  State  as  to §  (JO 

of  State  as  indisensable  or  necessary  ])arties  defendant  in  suits  by 

corporation §  250 

of  State  as  parties  plaintiff  in  suits  against  corporation §  251 

or  directors;  duties  and  liabilities  of,  generally;  parties §  201 

of  corporations;  duties  and  liabilities  of,  generally;  parties §  201 

action  by  corporations  against;  damages;  accounting §  262 

of  corporation;  suits  against  by  stockholders;  corporation  as  party.  §  203 
or  directors,  suit  by  stockholders  against;  corporation  as  party.  .   §  203 
and  directors,  individual  liability  of  to  creditors  where  capital 
stock  not  subscribed;  suit  in  equity  by  creditors  against  direct- 
ors     §  205 

of  corporation;  suit  against  for  mismanagement  should  be  by  cor- 
poration    §  274 

election  of  corporate ;  mandamus §  359 

by-laws  increasing  power  of;  stockholders  entitled  to  protection 

in  equity §  402 

injunction  against §  124 

See  Conditions  Precedent;  Departmental  Officers;  Public  Officers. 

OFFICERS  OF  LAND  DEPARTMENT, 

control  and  supervision  of  courts;  mandamus;  injunction §  129 

OIL, 

stored  in  State;  how  far  affected  by  inspection  r^'gulations §  59 

State  statute  as  to  inspection  of;  interstate  commerce §  59 

mined;  when  assumpsit  does  not  lie  to  recover §  321 

mined;  trespass  for  mesne  profits  lies  to  recover §  329 

OIL  CORPORATION, 

a  foreign  corporation;  party  defendant;  suit  for  damages. . .  .note,  §  228 

ORDERS, 

of  Interstate  Commerce  Commission;  promulgation  of  general 

orders ; ;    ;^  ^§  '^' 

of  board  of  equalization:  conclusiveness  of §§  1--.  '-•^ 

of  Interstate  Commerce  Commission;  jurisdiction  of  courts  over. 

generally .    ' 

for  service  by  publication:  averment  of  residence  as  basis  for  note.  §  173 


824  INDEX 

ORDERS— Continued : 

of  court  requiring  remedies  to  be  exhausted;  statute  limitations.  .    §  312 

mandamus  to  vacate  order  revoking  charter §  360 

of   Interstate    Commerce   Commission;    injunction    to    restrain 

enforcement  of §  433 

See  Constitutional  Basis  of  Actions  and  Defenses. 

ORDINANCE, 

power  of  city  to  enact  ordinance    regulating    and   controlling 

corporations §  25 

equity  jurisdiction  to  restrain  enforcement  of §  164 

rates  charged  by  gas  company  in  excess  of  those  prescribed  may 

be  recovered  back §  314 

See  Municipalities. 

ORES, 

conversion  of;  person  liable  not  to  be  credited  with  cost  of  mining 
ores §  340 

OUSTER, 

quo  warranto •  . .  .   §  386 

OVERVALUATION, 

of  property;  stock  issued  for;  liability  of  stockholders  to  creditors 

§§  295,  297 

P 

PAPERS, 

mandamus  to  compel  surrender  of  papers  of  corporation §  363 

PARALLEL, 

and  competing  railroads;  whether  may  consolidate;  State  may 
determine §  107 

PARTIES, 

preliminary  statement §  222 

intervenors;  action  to  enforce  mechanic's  lien;  jurisdiction §  81 

to  bill  in  equity;  plaintitf  as  lessee  of  property  and  creditor  and 
mortgage  bondholder  of  defendant  railroad  whose  property  was 
taxed §  83 

jurisdiction  of  suit  against  State  though  nominally  against  in- 
dividual        §  83 

Interstate  Commerce  Commission  has  legal  capacity  to  be 
plaintiff  or  defendant  in  Federal  Courts §  103 

railroad  companies  should  be  parties  defendant  in  suit  in  court 
after  proceedings  before  railroad  commissioners §  141 

whether  suit  against  railroad,  etc.,  commissioners  is  suit  against 
State §  155 


INDEX  825 

PARTIES— Continued. 

Attorney-General  of  State  is  proper   f)arty  defendant  to  auit  to 

prevent  enforcement  of  unconstitutional  statute §155 

presence  of  as  esseni ial  to  juristliction s  i5(j 

jurisdi(;tion  of  Federal  Courts  not-  dependent  <ni  relative  situa- 
tion of J  J57 

persons  interested  should  be;  equity  jurisdiction;  Federal  Courts.   §  100 

service  on  by  publication;  Federal  Circuit  Court §  i»;s 

to  suit  to  remove  cloud  on  shares  to  mininf;  stock;  Federal  Circuit 

^''"'■t §108 

nonresidents  as  in  Court  of  Claims  in  New  York §  171 

jurisdi(;tion  of  Fed(>ral  Circuit  Court;  what  constitutes  dispute 

or  controversy  between;  citizenship §  172 

when  corporation  is  and  is  not  a  citizen §  173 

presumption  as  to  citizenship  of  members  of  corporation;  president 

and  stockholder §  174 

joint-stock  company  not  a  corporation  for  juri.sdictional  purposes  §  175 
limited  partnership  not  a  corporation  for  juri.sdictioiial  purposes.  §  170 
board  of  trustees  not  a  corporation  for  jurisdicttional  purposes.  .  .    §  177 

citizenship  of  corporation  of  two  or  more  States §  178 

consolidated  corporations §  180 

obtaining  jurisdiction  of  foreign  corporations §§  181,  182 

plaintiffs  citizens  of  different  States §  ih3 

where  territory  divided  into  two  States §  184 

citizenship  of  guardian  in  suit  against  corporation §  185 

State  not  a  citizen;  diverse  citizenship §  180 

State  not  a  citizen §  iso 

suit  by  State  for  injunction §  180 

assignee  of  chose  in  action;  when  Federal  Courts  no  jurisdiction .  .  §  189 
assignee  of  chose  in  action ;  jurisdiction  Federal  Court.s  relates  to 

time  when  suit  is  brought §  190 

assignee  of  promissory  note  a  chose  in  action;  jurisdiction  Federal 

Courts;  exceptions  to  statutory  prohibition §  191 

when  Federal  Courts  have  jurisdiction  of  suits  by  a.ssignee §  192 

assignee  of  contract   to  convey  land,  when   P'ederal   Court  no 

jurisdiction §  193 

collusive  assignment  to  give  juri.sdict  ion §§  194,  195 

arrangement  between  to  give  jurisdiction;  diverse  citizenship.  ...   §  190 

consent  of  as  conferring  jurisdiction §§  200,  201 

appearance  of  as  waiver  of  objection  to  jurisdiction §  201 

joinder  of;  separable  controversy;  removal  of  suits. §§  213,  214,  215,  210 

corporation  as  entity §  224 

corporation  asserting  title  to,  regarded  as  distinct   from  stock- 
holders     §  224 

how  stockholders  regarded  in  corporate  proceeding  in  equity.  ...   §  224 

corporation  as  entity;  equity §  225 

directors  of  one  corporation,  directors  of  another  does  not  |>revent 

suit  against;  merger §  --'» 


826  INDEX 

PARTIES— Continued : 

corporations  may  sue  and  be  sued §  227 

college  established  by  church;  right  to  sue note,  §  227 

corporation  must  assert  right  in  corporate  name §  227 

corporations  as  necessary  or  indispensable  parties §  228 

corporation  necessary  in  suit  against  stockholders  of  insolvent 

foreign  corporation §  228 

corporations  as  necessary  or  indispensable  parties;  equity §  229 

dismissal  of  bill  in  chancery  for  want  of  proper  parties §  229 

distinction  between  necessary  and  proper  parties  defendant  in 

equity §  229 

suit  by  shareholder  to  enforce  corporate  right;  corporation  neces- 
sary party §  229 

corporation  necessary  where  relief  requires  personal  judgment .  .    §  229 

to  suit  for  injunction;  corporation  as  necessary §  229 

in  suit  to  abate  a  public  nuisance §  229 

defendant  in  suits  in  equity  under  New  York  Code  Civil  Procedure  §  229 

corporation  as  salvors  may  maintain  suit  for  salvage §  230 

power  of  corporation  to  sue  and  be  sued  includes  power  to  arbi- 
trate     §  231 

State  bank  converted  into  national  bank;  right  to  sue  in  former 

name §  232 

corporation's  right  to  sue;  waiver;  foreign  corporation §  233 

mode  of  objecting  to  corporate  capacity  to  sue §  233 

when  corporation  not  entitled  to  equitable  consideration  of  courts; 

consolidation  to  prevent  competition;  fraud  on  public §  234 

consolidation;  successor  of  corporation;  rights  of §  235 

foreign  corporation ;  parties §  23G 

foreign  corporation  plaintiff;    defense  of  failure  to  comply  with 

State  law §  236 

foreign  corporation;  parties;  presumptions §  237 

right  of  corporation  to  sue  as  affected  by  dissolution .  .  .  §§  238,  239,  240 

effect  of  forfeiture  of  charter  on  right  to  sue §  239 

suit  by  receiver  in  own  name;  statute §  239 

injuries  to  persons  in  execution  of  public  trust;  rule  as  to  when  not 

applicable  to  private  corporations §  241 

injuries  to  property,  generally §  242 

right  of  consignor  to  sue  corporation §  243 

suits  by  and  against  consignee §  244 

corporation  de  facto  may  sue  and  be  sued §  245 

what   constitutes   a   corporation  de  facto,  generally;   legislative 

power  to  cure  defective  organization §  246 

right  to  sue  railroad  corporation  not  dependent  on  compliance  by 

it  with  statute §  246 

collateral  attack;  de  facto  corporation;  estoppel  to  deny  legal 

corporate  existence §§  247,  248 

collateral  attack;  State  or  public  officials  as  parties;  de  facto 
corporal  ion ;  instances §  249 


INDEX  827 

PARTIES— Continued: 

State  or  State  officers  as  indispensable  or  proper  parties  defendant 
in  suits  by  corporation s  ^rn 

State  or  State  officers  as  parties  plaintiff  in  suits  against  corpora- 
tion   ){   O-l 

§  zol 

in  behalf  of  people  to  quiet  title  to  land §  251 

suit  to  restrain  corporation  from  tloing  business  in  State §  251 

State  proper  in  suit  to  enjoin  corporation  acting  as  such §  251 

action  by  State  to  recover  taxes 5  251 

municipality  as;  obstruction  in  street s  251 

intent  of  Congress  requiring  attorney-general  to  sue  in  equity  in 

name  of  llnited  States  the  Union  Pacific;  Uailroad  Cm ....    §  252 

United  States  as  plaintiff;  pension  checks;  forgery;  recovery  from 

bank j  252 

United  States  as  plaintiflf  suit  to  collect  taxes §  252 

United  States  as  plaintiff;  action  against  railroads §  252 

reorganized  or  successor  corporation §§  253,  254,  255 

defendant;  reorganization  of  corporation  into  foreign  one §  253 

levee  districts  or  levee  boards  whether  public  or  private  corpora- 
tions may  sue  and  be  sued §  25»; 

banks  as  parties,  generally §  257 

suit  by  corporation  as  taxpayer §  25.S 

suit  by  taxpayer  against  corporation §  25S 

promoters'  duties;  remedy  against  them;  corporate  lialiility  for 

acts  of,  generally §  25!  i 

corporation  must  institute  equitable  suits  to  redress  wrongs  by 

promoters  on  directors §  25!) 

internal  management  of  corporation;  general  rule §  2()i) 

officers  or  directors;  duties  and  habilities  of §  2(ii 

action  against  trustees  for  an  accounting §  2ti  I 

suit  by  corporation  against  officers  or  directors;  damages;  account- 
ing     §  2«t2 

suit  by  stockholders  against  officers  or  directors;  corporation 

as  party §  2(13 

suit  by  stockholders  against  directors;  negligence;  maladministra- 
tion; averments  necessary;  what  must  be  shown §  2(>t 

individual  liability  of  officers  and  trustees  to  cretlitors  where 

capital  stock  not  subscribed §  2(»5 

suit  in  equity  by  creditors  against  directors §  205 

suits  by  and  rights  of  minority  stockholders;  when  corporation 

should  be  made  party §  '-titi 

suits  by  and  rights  of  minority  stockholders;  creating  new  corpora- 
tion; consoHdation  agreement §  2«57 

when  stockholder  may  and  may  not  sue  in  equity §  2t»S 

right  of  stockholders  to  sue  in  equity  in  a  Federal  Court  for  surplus 

assets  after  decree  of  forfeiture  of  franchises §  200 

suit  by  stockholder  against  trustee  of  funds  for  dividenils;  defense; 
counterclaim §  2< D 


828  INDEX 

PARTIES— Continued : 

suit  by  stockholder  to  compel  successor  in  interest  of  lessee  to  pay 

rent  reserved §  271 

rights  of  subsequent  stockholders  to  sue §  272 

when  corporation  and  not  stockholders  should  sue  under  Sher- 
man Anti-trust  Act §  273 

when  corporation  should  sue  or  be  made  party  to  suit  by  stock- 
holder    §  274 

when  stockholder  may  be  made  party  defendant  by  court §  275 

refusal  of  court  to  permit  stockholders  to  defend §  275 

stockholders  as  necessary  parties  in  suit  by  policy  holder  against 
insurance  company  for  accounting  and  receivership;  equity 

jurisdiction §  276 

transfers   of   stock;    pledge   for   collateral   security;   liability   of 

pledgee  as  stockholder;  national  banks;  bailment §  277 

suits  by  creditors;  parties,  generally §  278 

"Trust  Fund"  doctrine;  capital  stock;  unpaid  subscriptions.  ...    §  279 
when  unpaid  subscriptions  or  unpaid  stock  are  and  are  not  assets .   §  280 

stockholders'  liability  to  creditors,  generally §§  281,  282 

subscriptions  to  aid  organization;  fictitious  and  colorable  subscrip- 
tions; defense  of  illegality  of  corporate  scheme §  283 

whether  stockholders'  liability  contractual,  statutory  or  penal ...    §  284 

right  of  action  by  stockholder  after  receiver  appointed §  285 

receiver  should  sue  to  recover  corporate  property §  285 

who  should  sue  to  enforce  individual  liability  of  stockholders  of 

bank §  285 

liability  of  nonresident  stockholder §  286 

liability  of  stockholder;  pleading;  what  must  be  shown §  287 

liability  of  stockholders   to   creditors;   unpaid  subscriptions  or 

stock §  288 

same  subject §  289 

liability  of  stockholders;  unpaid  subscriptions;  parties §  290 

liability  of  stockholders  to  creditors  where  stock  received  without 

con.sideration  or  for  less  than  its  value;  "bonus  stock".  .  .§§  291,  292 
consideration  for  issue  of  stock;  property,  etc.;  when  payment  in 

stock  to  contractor  is  not  a  stock  subscription §  293 

consideration  for  issue  of  stocks;  property,  etc.,  when  payment  in 

stock  to  contractor  not  a  stock  subscription §  293 

stock  issued  for  property;  valuation  should  be  fair  and  just;  neces- 
sity of  good  faith  in  transaction §  294 

stock  issued  for  property;  material  overvaluation;  stockhoklers 

not  necessarily  liable  to  creditors  therefor;  good  faith §  295 

stock  issued  for  property;  shareholder  may  be  liable  where  over- 
valuation shows  fraud  upon  creditors  though  none  intended ...    §  296 
stock  issued  for  property;  valueless  property;  material  overvalua- 
tion     §  297 

stock  issued  for  property  which  subsequently  becomes  valueless 
or  consideration  fails §  298 


INDEX  829 

PARTIES— Continued : 

judgment  creditors;  stockholders'  liability  to,  for  unpaid  stock; 
parties §  299 

judgment  creditors;  stockholders'  liability  to,  for  uni)aid  slock,  .   §299 

amount  of  creditor's  recovery  on  stock  may  ije  limited  by  his 
knowledge  of  agreement  under  which  shares  issued §  300 

creditor  or  stockholder  may  sue  after  demand  upon  and  refusal  of 
corporate  authorities  to  act;  stockholder  may  defend §  301 

when  demand  upon  corporate  authorities  and  their  refusal  a  condi- 
tion precedent  to  suit §  302 

when  demand  upon  and  refusal  of  corporate  authorities  not  a  con- 
dition precedent  to  suit §  303 

demand  upon  and  refusal  of  corporate  authorities;  necessity  of 
alleging  and  showing  same §§  305,  306 

effect  of  demand  and  refusal  dependent  upon  circumstances;  dis- 
cretion of  directors ;  simulated  demand §  304 

enforcing  stockholders'  liability;  exhausting  remedies  against 
corporation;  when  judgment  and  execution  unsatisfied  are  con- 
ditions precedent §  307 

enforcing  stockholders'  liability;  exhausting  remedies  against  cor- 
poration; when  judgment  and  execution  unsatisfied  are  not  con- 
ditions precedent §  308 

stockholders'  liability;'  dissolution  as  condition  precedent  to 
enforcing  same §  309 

effect  of  Equity  Rule  94;  when  demand  upon  directors  for  relief 
is  and  is  not  condition  precedent;  stockholders;  right  to  protect 
corporation  when  directory  derelict §  310 

creditors'  right  to  sue;  parties;  conditions  precedent §  31 1 

judgment  creditors'  right  to  sue;  conditions  precedent §  311 

order  of  court  requiring  remedies  to  be  exhausted;  statute  limita- 
tions     §  •■^1- 

railroad  company  may  be  sued  in  trespass  quare  dausum  frcgil ...   §  '.iW 

trespass  quare  dausum  fregit  lies  against  anyone  unlawfully  dis- 
turbing grave s  ^-i" 

when  trespass  quare  dausum  fregit  lies  against  company  entering 

land  and  cutting  timber §  '•^•^^ 

joinder  of  plaintiffs;  action  to  prevent  nuisance §  334 

who  and  who  not  entitled  to  sue;  action  for  fraud  and  deceit.  ...   §  339 

shipper;  when  may  recover  of  express  company  for  fraud  causing 

loss §:«^ 

proper  and  necessary  to  mandamus  proceedmgs,  gen(>rally  §  3/.> 

plaintiff  in  mandamus;  private  persons §  376 

plaintiff;  private  persons §  •>7o 

State;  attorney-general S  j^^ 

to  mandamus;  attorney-general §  j^y 

to  mandamus;  defendants »  **' 

quo  warranto;  State;  attorney-general §390 

plaintiff;  quo  warranto § 


830  INDEX 

PARTIES— Continued : 

defendant ;  quo  warranto §  391 

plaintiffs;  defendants;  joinder. §  391 

generally;  prohibition §  401 

equity  jurisdiction;  generally §  404 

when  railroad  no  sufficient  interest  as  to  obtain  injunction  against 

street  railroad §  404 

reformation  of  contract  of  pledge  may  be  decreed  against  bank- 
rupt and  assignee §  404 

policy  holder  and  payee  as  parties  in  equity  for  reformation  of 

insurance  policy §  404 

to  reformation  of  contract  of  pledge;  equity §  404 

suit  by  stockholder  for  accounting,  setting  aside  lease,  etc §  404 

when  member  of  mutual  insurance  company  may  have  aid  of 

equity  to  protect  property  rights  of  corporation §  404 

when  party  not  sufficient  interest  to  invoke  and  of  equity  to 

compel  compliance  with  rates  fixed  by  lease §  404 

right  of  stockholder  to  bring  suit  in  equity  nominally  against 

corporation  but  really  for  its  benefit §  404 

when  may  sue  in  equity  to  quiet  title  and  remove  cloud §  404 

to  foreclosure  of  liens  or  mortgages §§  414,  415,  416 

rights  of  upon  foreclosure  of  liens  or  mortgages §§  414,  417 

joinder;  injunction;  nuisances : §  432 

State  or  attorney-general;  corporations;  joinder;  injunction;  nui- 
sances    §  432 

when  carrier  liable  as  party  to  joint  rate;  rebates;  Elkins  Act. . .  §  452 

PARTNERS, 

stockholders'  and  members'  liability §  282 

PARTNERSHIP, 

when  transfer  by  not  a  sham  to  oust  court  of  jurisdiction..  .  .note,  §  194 
limited  not  a  corporation  for  jurisdictional  purposes §  176 

PASSENGERS, 

regulation  and  control  of  ship  passenger  laws §  18 

right  of  recovery  for  injuries,  of  pcnson  not  passenger §  29 

business  of  receiving  and  landing  is  incident  to  transportation; 

tax  upon  same §  61 

taxation  upon  capital  stock  of  corporations  engaged  in  transporta- 
tion of §  62 

action  by  for  injury;  jurisdiction  of  New  York  City  Court.  .  .  .note,  §  89 
ejection  from   train;   fiabiUty  of  corporation  for  acts  of  .serv- 
ant  note,  §  317 

corporation  hable  for  personal  injuries;  negligence;  action  at  law.    §  318 
when  action  ex  delicto  lies  against  railroad  company  for  ejection 

from  train §  327 

when  railroad  company  not  Hable  for  act  of  servant  in  causing 
arrest  of §  331 


INDEX  832 

PASSES, 

right  to  issue.     See  Hepburn  Act. 

PATENTS, 

regulation  and  control  of  patent  righlB 5  1^ 

in  what  district  suits  for  infringement  of  should  be  brought,  .note,  §  161 

PAVING, 

street;  assumpsit  to  recover  cost  of  from  street  railroad  company.   §  321 

PAYMENT, 

by  stockholder  for  stock  must  be  actual  and  bona  fide §  2«9 

in  stock  to  contractor;  not  a  stock  .subscription §  293 

for  property;  stock  given  in;  pre.suniption  as  to §  294 

by  fire  insurance  company  for  loss  of  property;  when  may  be 

recovered  back §  318 

PENAL, 

whether  stockholders'  liability  is §  284 

PENAL  CODE, 

of  New  York;  corporation  cannot  be  guilty  of  manslaughter  under.  §  450 

PENALTIES, 

State  may  prohibit  trusts,  etc.,  under note,     §  1 1 

right  of  State  to  classify  corporations  and  impose  penalty §  13 

may  be  provided  for  not  making  reports  by  masters  of  vessels.  .  .  §  18 
for  nonadjustment  of  claims  by  carriers  within  time  limited  ....  §  30 
for  nonadjustment  by  carrier  of  claims;  effect  of  amount  of  claim 

being  small note,     §  30 

may  be  imposed  by  State  for  noncompliance  with  statute  requir- 
ing diligence,  etc.,  in  transmission  of  telegrams §  31 

failure  of  railroad  company  to  post  its  rates  in  depots  or  stations.     §  32 
clause  of  statute  separable  from  other  provisions;  will  not  be  con- 
sidered in  suit  to  enjoin  carriers  from  violating  regulations 

where  no  penaltj'  provided §  49 

transportation  of  coal ;  commodities  clause  of  Hepburn  Act §  49 

for  refusal  to  stop  trains  at  certain  stations §  50 

C.  O.  D.  shipments  of  intoxicating  liquors;  State  exclusion  of.  .     §52 

for  transportation  of  intoxicating  liquors  into  State §  52 

for  procuring  insurance  by  company  not  conforming  with  con- 
ditions precedent  to  doing  business §  55 

action  for;  when  jurisdiction  acquired §  83 

action  for,  for  refusing  transfer  on  street  railroad;  jurisdiction  of 

New  York  Municipal  Court note,     §  89 

enforcement  of,  on  transportation  company  without  judicial  trial; 

by  Secretary  of  Commerce  and  Labor §  100 

against  transportation  company  for  bringing  aliens  with  con- 
tagious disease  is  civil  and  not  criminal  offense §  100 


832  INDEX 

PENALTIES— Continued : 

transportation  company;  bringing  in  alien  immigrants  with  con- 
tagious diseases §  100 

Congress  may  provide  for,  and  empower  executive  officers  to  en- 
force     §  100 

shipper  may  sue  for,  in  case  of  excessive  charges  and  is  not  obli- 
gated to  apply  to  commission §  151 

statute  as  to;  judgment  of  State  Court;  review  by  Federal  Su- 
preme Court §  208 

stockholders'  liability;  whether  in  nature  of §  284 

action  of  debt  for;  against  insurance  company §  324 

employment  of  children  under  certain  age §  449 

See  Criminal  and  Penal  Offenses;  Fines. 

PENSION  CHECKS, 

forgery  of  payee's  name  on;  right  of  United  States  to  recover 
from  bank §  252 

PEOPLE, 

what  powers  are  reserved  to,  of  States note,       §  3 

PERSON, 

corporatidn  regarded  as,  for  civil  purposes note,  §  227 

PERSONAL  INJURIES, 

when  noncompliance  by  plaintifT  employe  cannot  be  pleaded  in 

bar  to  action  for §  26 

right  of  recovery  for,  of  person  not  passenger §  29 

jurisdiction  of  New  York  municipal  court note,     §  89 

of  wife  and  suit  for  loss  of  services;  jurisdiction  of  New  York 

municipal  court note,     §  89 

liability  of  corporation  for  acts  of  servant note,  §  317 

negligence;  corporation  liable  in  action  at  law  for  damages §  318 

when  complaint  states  cause  of  action  in  trespass;  negligence  of 

railroad  company §  328 

trespass  not  proper  form  of  action  for,  caused  by  negligence  of 

servants  of  corporation §  328 

See  Assault;  Battery. 

PETITION, 

by  railroad  company  for  appointment  of  commissioners  of  ap- 
praisal      §  81 

in  action  to  enforce  lien  on  mining  lode;  when  insufficient  to  be 

subject  of  order  or  decree §  88 

for  removal  of  cause  insufficient;  not  showing  diversity  of  citizen- 
ship   note,  §  207 

for  removal  of  suit;  denial  of,  petitioner's  right  to  elect  remedy.  .    §  217 

for  removal  wrongfully  denied  in  State  Court §  218 

See  Complaint;  Pleading. 


INDEX  833 

PIPE  LINE  COMPANY, 

when  liable  in  trespass  for  removing  buried  pipes §  32« 

PLAINTIFFS, 

citizens  of  different  States r  jgg 

See  Parties. 

PLANT, 

value  of;  elements  in  fixing  rates §  3(3 

PLEADING, 

noncompliance  by  plaintiff  employ^  when  cannot  be  pleaded  as 

bar  to  action  for  personal  injuries §  26 

"jurisdiction  of  the  case";  plea  in  abatement;  avonncnt  suffi- 

Z^""^. §82 

allegation  of  comphance  with  Equity  Kule  94;  juri.sdiction §83 

jurisdiction  may  be  acquired  though  pleading  defective §  83 

averment  as  to  residence  of  foreign  corporation;  jurisdiction  of 

New  York  municipal  court note,     §  89 

defense  that  suit  against  commission  is  suit  against  State §  155 

as  to  averments  of  citizenship note    §  173 

as  to  citizenship  of  corporation  in  suit  in  equity;  Federal  Courts. .   §  173 

effect  of  averment  as  to  citizenship  of  joint-stock  company §  175 

sufficiency  of  averment  of  citizenship  of  corporation §181 

petition  for  removal  of  cause  held  insufficient note,  §  207 

petition  for  removal;  denial  of;  petitioner's  right  to  elect  remedy.  §  217 
of  failure  of  foreign  corporation  to  comply  with  statute;  time  of.  §  236 

rule  of,  in  equity §  253 

suit  by  stockholders  against  directors;  negligence;  maladministra- 
tion; averments  necessary;  what  must  be  done §  264 

suit  by  minority  stockholders;  mismanagement;  dismissal  of  bill.   §  266 

bill  for  accounting  and  appointment  of  receiver §  268 

in  actions  against  stockholders;  what  must  be  shown §  287 

demand  and  refusal;  conditions  precedent  to  suit §§  305,  306 

mahcious,  etc.,  acts  of  servant note,  §  317 

when  complaint  states  action  of  trespass  for  damages  for  personal 

injuries §  328 

trespass  quare  clausum  f regit §  330 

defense  that  acts  of  trespass  were  done  under  charter  must  be 

pleaded §  330 

description  of  premises  in  action  quare  clausum  f regit §  330 

in  action  against  nuisance §  334 

in  action  for,  for  malicious  prosecution §  336 

what  must  appear  or  be  shown  to  sustain  action  for  fraud  and 

deceit note,  §  339 

when  averments  sufficient  to  show  fraud  in  causing  plaintiff  to 

part  with  stock §  339 

to  sustain  action  of  fraud  and  deceit;  misrepresentations §  339 

53 


834  INDEX 

PLEADING— Continued : 

sufficiency  of  showing;  demurrer;  judgment;  appeal §  381 

in  mandamus;  sufficiency  of  showing;  demurrer §  381 

sufficiency  of  showing;  quo  warranto §  393 

PLEDGE, 

reformation  of  contract  of;  parties;  bankrupt  and  assignee; 
pledgor §  404 

PLEDGEE, 

liability  for  corporate  debts §  277 

PLEDGOR, 

where  property  wrongfully  pledged  may  sue  at  law  for  damages; 

maintain  claim  and  delivery  or  demand  equitable  relief §  341 

as  party  to  reformation  of  contract  of  pledge §  404 

POLES  AND  WIRES, 

of  telegraph,  etc.,  companies  in  street;  rental,  etc.,  charges  for.  .     §31 
ejectment,  when  lies  to  compel  removal  of  telegraph  poles §  315 

POLICE  POWER, 

State  exercise  of,  cannot  directly  regulate  interstate  commerce .  .  §  2 

is  one  reserved  to  States  and  no  grant  to  Congress  in  Constitution.  §  7 

difficult  to  define;  general  principle  stated §  7 

may  not  trespass  on  rights  and  powers  vested  in  National  Gov- 
ernment   §  8 

when  must  yield  to  Congress §  8 

limitations  on §  8 

limitations  on ;  Federal  Constitution §  9 

may  be  delegated  to  municipal  corporations  or  other  agencies.  .  §  10 

private  interest  subservient  to §  10 

when  beyond  reach  of  judicial  inquiry §  10 

legislature  is  vested  with  a  large  discretion  in  exertion  of §  10 

to  define  and  prohibit  trusts §11 

liberty  to  contract §§  11»  12 

statute  under  exercise  of  for  criminal  proceedings  against  resi- 
dents and  civil  proceedings  against  nonresidents  held  consti- 
tutional    §  14 

regulation  of  slaughter  houses  and  stock  yards §  15 

to  require  reports  from  masters  of  vessels §  18 

may  regulate  hours  of  labor §  18 

extinction  of  grade  crossings  as  proper  exercise  of §  24 

Farm  Drainage  Act  of  State;  when  a  proper  exercise  of §  24 

of  State  to  change  or  modify  relations  of  employer  and  employe.  §  26 

to  regulate  hours  of  labor §  27 

rate  regulations §  32 

regulation  of  railroad  rates §  32 


INDEX  836 

POLICE  POWER— Contin nod: 

must  yield  when  in  conflict  with  exclusive  powers  of  ConKress.  .  §  42 
proper  regulation  not  unconstitutional  when  indirectly  affects 

interstate  commerce §  42 

when  cannot  compel  absolute  delivery  of  cars  on  certain  day.  ...  §  47 

when  State  may  prohibit  running  freight  trains  on  Sunday §  4)S 

prohibition  against  bringing  intoxicating  licjuors  into  State;  inter- 
state commerce |  51 

regulation  of  sale  of  liquor  is  exercise  of §  54 

to  fix  rates  and  charges  for  elevating,  etc.,  grain §  57 

as  to  quarantine  and  inspection  regulations;  interstate  commerce.  §  5K 

requiring  certain  returns  from  insurance  companies §  7s 

State  may  designate  agent-ies  to  carry  out  polic(>  regulations §  92 

of  States;  crimes  and  penalties §  440 

See  Constitutional  Basis  of  Actions  and  Defenses;  Powers. 

POLICY.     See  Insurance 

POLICY  HOLDER, 

suit  by,  against  insurance  company  for  accounting  and  receiver- 
ship    §  270 

POOLING, 

of   freights;    when    agreement    between   initial   and    connecting 
carriers  is  not • §  104 

POSSESSION, 

and  title  as  basis  of  ejectment note,  §  315 

POSTAL  CLERKS, 

of  railways;  classification  of,  with  employes  of  railroads §  20 

POSTMASTER, 

injunction  against §  42S 

POST  ROADS, 

bridges;  as  extent  of  right  conferred  on  bridges  by §  56 

POST  ROADS  ACT, 

State  statute  must  not  conflict  with;  telegraph  line §  2 

interstate  commerce  not  affected  by §  8 

POWERS, 

of  Federal  and  State  governments  distinguished §  3 

implied  and  express;  Federal  Constitution §  3 

of  Federal  and  State  governments  distinguished;  Territories.  ...  §  3 

of  legislation  may  be  taken  away  by  implication §  3 

nature  of  powers  delegated  to  Congress §  3 

of  Federal  Government;  first  eight  articles  of  Federal  Constitu- 
tion have  reference  to §  "^ 


836  INDEX 

POWERS— Continued : 

Federal  Government  one  of  enumerated §  3 

revisory,  of  Congress  over  Territories §  3 

Constitutions  of  States  are  limitations  of §  3 

what  powers  are  reserved  to  the  States note,       §  3 

judicial  and  legislative §  4 

legislative  and  judicial,  may  be  united  in  same  body §  4 

Federal  Constitution  does  not  forbid  State  legislature  to  exercise 

jurisdiction §  4 

to  regulate  laws  is  legislative  in  character §  5 

of  courts  to  restrain  unlawful  exercise  of  legislative  or  adminis- 
trative powers   by   executive   officers,    municipal   councils  or 

administrative  boards §  5 

of  State  as  to  apportionment  of  expense  of  grade  crossings §  24 

of  Congress  to  regulate  hours  of  labor §  26 

State  tax  may  be  enforced  against  foreign  telegraph  company.  .  §  31 
of  legislation  and  of  taxation  operates  on  all  persons  and  property.  §  67 
Congress  may  employ  corporations  as  instrumentalities  to  execute 

powers  to  regulate  commerce §  92 

of  corporation  supervisory  bodies §§  92-122 

administrative  duties  and  legislative  powers  distinguished §  92 

when  agreement  between  certain  city  officials,  etc.,  with  corpora- 
tions to  abide  result  of  test  suits  is  void §  93 

municipality;  railroad  commission  and  borough  president;  laying 

electric  lines;  repaving  by  street  railroad §  96 

of  commission  as  to  standard  fire  poUcy §  97 

of  Secretary  of  Agriculture;  regulation  of  commerce;  quarantine 

regulations §  99 

of  Secretary  of  State;  reinsurance  contract §  101 

of  State  as  to  railroad  and  hke  commissions §§  107,  108 

to  remove  or  suspend  commission §§  107,  108,  109 

of  corporations,  generally §  223 

of  corporation  to  sue  and  be  sued  include  power  to  arbitrate §  231 

legislative,  to  cure  defective  organization §  246 

of  corporation  unlawfully  exercised;  quo  warranto  lies §  385 

See  Congress;  Constitutional  Law;  Constitutional  Basis  of 
Actions  and  Defenses;  Delegation  of  Power;  Legislature; 
Police  Powers;  State. 

PRACTICE, 

and  procedure;  remanding  cause  to  Interstate  Commerce  Com- 
mission    §  135 

PRECIPE, 

filed ;  commencement  of  suit §  83 

PRESIDENT, 

of  corporation;  presumption  as  to  citizenship  of §  174 


INDEX  837 

PRESUMPTION, 

as  to  citizenship  of  members  of  corporation;  president  and  stock- 
holders   J  J7^ 

as  to  compliance  by  foreign  corporation  with  State  law §  237 

as  to  ownership  of  goods  shipped §  243 

as  to  consideration  for  stock  given  in  payment  of  property §  2'M 

PRINCIPAL  AND  AGENT, 

prospectus  issued  by  agent;  false  statements  in §  3;{<j 

to  solicit  subscriptions;  failure  of  agent  to  notify  principal  of 
withdrawal  of  subscriber §  3:^9 

PRIORITIES, 

on  foreclosure  of  mortgage §  417 

See  Equity;  Foreclosure;  Sale. 

PRIVATE  CAR  COMPANY, 

when  it  violates  statute  as  to  rebates §  104 

is  subject  to  jurisdiction  of  Interstate  Commerce  Commission; 
rebates s  104 

PRIVATE  PERSONS, 

as  parties.     See  Parties. 

PRIVILEGES.     See  Franchises. 

PROBATE  MATTERS, 

equity  jurisdiction  of  Federal  Circuit  Courts;  diverse  citizenship.    §  109 

PROCEDURE, 

and  practice;  remanding  cause  to  Interstate  Commerce  Commis- 
sion    §  135 

PROCESS, 

when  appeal  does  not  constitute  to  invoke  judicial  power §  5 

service  of;  foreign  corporations  may  be  put  on  same  footing  and 

state  as  domestic  corporations §  14 

statute  describing  mode  of  serving,  upon  corporations  different 

from  charter  provision §  22 

issued  after  expiration  of  time  limit  for  suing  under  terms  of 

insurance  policy §  S3 

service  of  upon  defendant;  juristliction  of  Federal  Court §  83 

service  of  summons  on  person  defective;  jurisdiction  acquired.  .  .     §  83 

proper  service  of  as  essential  of  jurisdiction §  83 

service  of  as  essential  to  jurisdiction §  88 

of  Federal  Court;  use  of  in  aid  of  inquiries  before  Interstate 

Commerce  Commission;  testimony;  production  of  books,  etc.; 

fine  and  imprisonment;  contempt;  power  of  commission §  137 

corporation  commission  of  North  Carolina  no  power  to  enforce 

its  orders  by  final  process §  1^" 

obtaining  jurisdiction  of  foreign  corporation §  1"^! 


838  INDEX 

PROCESS— Continued : 

service  of  on  foreign  corporation  doing  business  or  having  agent 

or  office  in  State note,  §  181 

action  lies  for  malicious  abuse  of,  civil  or  criminal §  331 

See  Garnishee  Process 

PROFITS, 

elements  in  fixing  rates §  36 

false  statements  in  prospectus  as  to §  339 

PROHIBITION, 

jurisdiction §  81 

nature  of,  generally §  395 

nature  of  continued;  is  a  discretionary  writ;  effect  of  judgment 

or  sentence §  396 

does  not  lie  where  there  is  a  plain  and  adequate  remed}';  ex- 
hausting remedies §  397 

where  act  sought  to  be  prohibited  has  been  done §  398 

to  court  without  jurisdiction  or  where  it  exceeds  jurisdiction.  ...   §  399 

to  admiralty  court §  400 

See  Parties  Generally. 

PROMISSORY  NOTE, 

suit  by  assignee  of  judgment  on;  jurisdiction  Federal  Courts §  189 

suits  by  assignee  of;  jurisdiction  Federal  Courts;  exceptions  to 
statutory  prohibition §  191 

PROMOTERS, 

duties  of;  remedy  against;  corporate  liability  for  acts  of,  gen- 
erally     §  259 

contracts  made  by  before  incorporation  not  binding  on  corpora- 
tion     §  259 

duties;   remedy   against    them;    corporate   liability    for  acts  of, 

generally §  259 

wrongs  of;  corporation  has  remedy  at  law  to  redress  same §  259 

equitable  suits  to  redress  wrongs  of  must  be  instituted  by  cor- 
poration     §  259 

false  and  fraudulent  prospectus , §  339 

PROOF.     See  Evidence. 

PROPER  OR  NECESSARY  PARTIES, 

generally §  375 

See  Parties. 

PROPERTY, 

loss  by  fire  from  locomotive  engines;  State  may  provide  for 

recovery  of  damages §  30 

value  of  should  be  fixed  at  time  inquiry  made §  36 


INDEX  839 

PROPERTY— Continued : 

value  of  as  element  in  fixing  rates §  3(; 

corporation  asserting  title  to  regarded  as  persons  separate  from 

§224 


stockholders. 


injuries  to,  generally;  parties §  242 

stock  issued  in  payment  of s  293 

stock  issued  for;  valuation  shoukl  be  fair  and   just;   necessity  (jf 

good  faith §  294 

stock    issued    for;    material    overvaluation;    liability    of    stock- 
holders  §§  295,  297 

stock  issued  for;  fraud  on  creditors;  stockholder  liable §  296 

materially    overvalued;    stock    issued    for;   extent  stockholder's 

liability §  297 

valueless ;  stock  issued  for §  297 , 

given  for  stock;  valuation  placed  on  by  stockholder  does  not 

bind  court §  297 

stock  issued  for;  subsequently  becoming  valueless  or  considera- 
tion fails §  298 

loss  of  or  injury  to;  liability  for  acts  of  servant note,  §  317 

See  Assets. 

PROSPECTUS, 

to  induce  subscriptions  to  or  sale  of  bonds,  etc.;  deceit note,  §  339 

false  statements  in  to  induce  sale  of  stock,  etc.,  action  for  fraud 

and  deceit §  339 

to  obtain  increase  of  capital  stock;  fraud  and  deceit note,  §  339 

See  Damages;  Frautl  and  Deceit. 

PROTECTIVE  TRADE  ASSOCIATION, 

writing  libelous  letter  to;  action  for §  335 

PUBLICATION, 

order  for  service  by;  averment  of  residence  as  basis  for note,  §  173 

PUBLIC  CORPORATIONS, 

powers  of  not  coextensive  with  those  of  individuals §  223 

when  levee  district  is  a §  256 

PUBLIC  NUISANCE, 

parties  to  suit  to  abate §  229 

by  electric  line  in  street;  right  of  abutting  owner §  242 

PUBLIC  OFFICERS, 

as  parties;  collateral  attack §  249 

as  indispensable  or  proper  parties  defendant  in  suite  by  corpora- 
tions    §  --'^O 

as  parties  plaintiff  in  suits  against  corporations §  251 

PUBLIC  OFFICIALS, 

designation  of  by  govern  nent  to  carry  out  regulations  of §  92 


840  INDEX 

PUBLIC  POLICY, 

contract  for  co-operation  in  procuring  franchise §  407 

PUBLIC  SERVICE  COMMISSION, 

jurisdiction  and  power  of §  117 

jurisdiction  of;  issue  of  stocks  and  bonds  by  corporation §  117 

may  rehear  and  redetermine  on  new  evidence §  121 

jurisdiction  as  to  grade  crossings §  121 

jurisdiction  of  courts;  certificate  of  pubhc  convenience  and  ne- 
cessity    §  142 

certiorari  to  review  determination  of §  154 

nature  of  powers §  154 

right  of  appeal  by  from  court  order  annulhng  its  decision §  154 

PUBLIC  SERVICE  CORPORATIONS, 

power  of  State  to  amend  charter  of §  22 

issue  by  of  stocks  and  bonds;  jurisdiction  of  pubhc  service  com- 
mission    §  117 

See  Names  of  Various  Kinds  of;  Constitutional  Basis  of  Actions 
and  Defenses. 

PUBLIC  TRUST, 

injuries  to  persons  in  execution  of;  rule  as  to  when  not  applicable 
to  private  corporations §  241 

PUBLIC  USE, 

owner  of  property  devoted  to,  subject  to  have  use,  etc.,  regulated       §  6 
owner  of  property  devoted  to,  must  submit  to  have  that  use  and 

employment  regulated  by  public  authority §  6 

water  for  sale,  rental,  etc.,  may  be  declared  to  be  a §  95 

PUBLIC  WAREHOUSES.     See  Warehouses. 

PUBLIC  WORKS, 

regulation  of  hours  of  labor  on §  27 

PUNITIVE  DAMAGES, 

against  corporation;  false  imprisonment §  331 

against  corporation  for  libelous  letter §  335 

PURCHASER.     See  Foreclosure;  Vendee. 

Q 

QUANTUM  MERUIT, 

assumpsit §  321 

QUARANTINE, 

line;  intrastate  commerce;  power  of  Secretary  of  Agriculture  to 
fix  under  cattle  contagious  disease  act §  99 


INDEX  841 

QUARANTINE  REGULATIONS, 

for  protection  of  health 5  co 

interstate  commerce;  police  power §  co 

Federal  authorities  may  adopt  (juarantine  line  fixed  hy  .State.  ' .  .  §  59 

QUIETING  TITLE, 

equity  jurisdiction  as  to ^  ,^.^ 

mining  claim;  Federal  (juestion;  jurisdiction noVc,  §  208 

suit  by  attorney-general  for §  251 

See  Equity;  Title 

QUO  WARRANTO, 

corporation  adjudged  no  legal  existence;  effect  on  rights  of  prop- 

^•"^y §  239 

nature  of c  oj,., 

abolished  in  certain  States §s  3}^2    385 

when  not  exclusive  remedy;  when  proper  n  rucdy §  383 

when  proper  remedy  is  quo  warranto  and  not  mandamus §  352 

when  special  or  statutory  actions  or  proceedings  exclusive §  384 

lies  in  case  of  unlawful  exercise  of  corporate  power  or  franchises .  .  §  385 

to  forfeit  or  annul  or  test  franchises  of  corporation;  ouster §  38G 

to  forfeit  only  misused  franchise  and  leav(>  corporation  intact ...  §  387 

to  control  rates  and  charges §  ;isjS 

jurisdiction  of  quo  warranto  proceedings §  ;J89 

parties;  State;  attorney-general §  390 

parties;  plaintiffs;  defentlants;  joinder §  391 

seeking  other  relief  as  condition  precedent  to  granting  quo  war- 
ranto   s  392 

pleadings;  sufficiency  of  showing §  393 

defenses  available,  generally §  394 

R 

RAILROAD  AND  WAREHOUSE  COMMISSION, 

jurisdiction  as  to  rates §  113 

when  without  jurisdiction;  rates §  1 15 

jurisdiction  as  to  increase  of  capital  stock §  1  Ui 

jurisdiction  as  to  erection  of  depots  by  railroads §  120 

rates;  jurisdiction  of  courts §  139 

RAILROAD  BRIDGES.     See  Bridges. 

RAILROAD  COMMISSIONS, 

power  of  State  to  impose  salaries  and  expenses  of  upon  public 

service  corporation §  21 

order  of,  that  railroad  trains  stop  at  certain  stations §  50 

powers  of,  over  railroads  organizcnl  under  laws  of  I'liiled  States.  .  §  75 

expenses  of;  taxation  of  railroads  to  pay  same §  70 


842  INDEX 

RAILROAD  COMMISSIONS— Continued : 

injunction  to  restrain,  from  approving  and  certifying  assessment 

of  taxes  against  railroad §  83 

joint  control  with  municipality  as  to  use  of  streets  by  street  rail- 
ways       §  96 

power  of  State  as  to §§  107,  108 

power  to  remove  or  suspend  commission §§  107,  108,  109 

jurisdiction  and  powers  of §§  108-116 

nature  and  extent  of  powers  and  jurisdiction  of §§  108-116 

and  like  commissions;  power  to  remove  or  suspend  them §  109 

jurisdiction  as  to  rates §  113 

application  to;  long  and  short  hauls note,  §  115 

jurisdiction  as  to  traffic note,  §  119 

jurisdiction  of;  delivery  of  cars;  train  connections §  119 

refusal  or  consent  of,  to  abandonment  of  railroad  stations §  120 

jurisdiction  as  to  grade  crossings;  apportionment  of  expense  of .  .   §  121 

jurisdiction  of;  telegraph  companies §  122 

jurisdiction  to  require  telegraph  companies  to  establish  offices.  .  .    §  122 

jurisdiction  of,  over  telegraph  companies,  generally §  122 

jurisdiction  of  courts  in  respect  to §§  139-142 

of  North  Carolina  is  court  of  record §  140 

proceedings  before  as  conditions  precedent  to  suit  in  court §  141 

decision  as  to  issuance  of  certificate  of  public  convenience  and 

necessity  not  subject  to  judicial  revision §  142 

certificate  of  public  convenience  and  necessity;  jurisdiction  of 

courts §  l'^2 

jurisdiction  of  courts  in  respect  to;  rates §§  149-151 

relief  where  it  acts  without  jurisdiction  in  ordering  excessive  rates 

refunded §  150 

relief  by,  when  not  reviewable  by  courts;  long  and  short  hauls.  .   §  150 
refusal  to  grant  relief  in  "special  cases"  not  reviewable  by  courts.  §  150 
injunction  to  restrain  enforcement  of  rates  under  schedule  pub- 
lished by §  150 

action  of  as  to  rates  cannot  be  controlled  in  advance  by  injunction  §  151 

may  be  enjoined  from  proceeding  to  fix  rates §  151 

whether  suits  against,  are  suits  against  State §  155 

bill  lies  in  equity  to  revise  ruling  of §  434 

See  Railway  Commissioners. 

RAILROAD  COMPANIES, 

power  to  regulate  is  legislative  in  character §  5 

contract  of,  with  elevator  company  when  not  an  interference 

with  power  of  Congress  to  regulate  commerce §11 

charter  of,  is  taken  subject  to  power  of  State  to  regulate  and 

control §  21 

subject  to  regulate  and  control  to  protect  public  against  danger, 

injustice  and  oppression §  21 

State  may  require  companies  to  fence  their  roads §  21 


INDEX  843 

RAILROAD  COMPANIES— Continued : 

State  may  regulate  scihedule  for  running  trains {21 

State  may  regulate  operations  of §  21 

extent  of  power  of  State  to  compel  railroad  stations  to  be  estab- 
lished      K  21 

ordinance  giving  iK'rmi.ssion  to  construct  tunnels  under  luivigable 
water,  when  does  not  amount  to  contract  under  the  Constitu- 
tion       §  22 

statute  describing  mode  of  serving  ijrocess  upon;  when  not  un- 
constitutional       5  22 

obligation  of  contract;  due  process  of  law §  22 

obligation  of  contra(!t;  exemption  and  transfer  thereof;  due 
process  of  law §  23 

taxation;  exemptions  and  due  process  of  law note,     §  23 

police  power  to  direct  extinction  of  grade  crossings  is  properly 

exercised J  24 

power  of  State  to  apportion  expense  of  viaducts  over  sevc^ral 

crossings §  24 

viaducts  over  grade  crossings;  power  of  State  to  control,  etc §  24 

right  of,  to  a  bridge  over  water  course  crossing  to  right  of  way; 

right  of  public  to  use  such  water  course §  24 

method  of  eliminating  grade  crossings;  when  not  a  matter  of 
judicial  determination §  24 

when  statute  giving  appeal  from  action  eliminating  grade  cross- 
ings is  unconstitutional §  24 

right  of,  to  maintain  tunnels  under  navigable  river  subject  to 
right  of  public §  25 

acquiring  vested  property  rights;  statute  requiring  payment  of 

expense  of  crossings;  reserve  power  to  alter  or  amend  charter.  .      §  25 

statute   providing  for  presentation  and   adjustment    of   claims 

against  railroads §  30 

statutes  providing  for  recovery  of  attorney's  fees  against §  30 

locomotives;  State  may  provide  for  recovery  of  damages  for  loss 
by  fire  from §  30 

company  subject  to  penalty  for  failure  to  post  rates  in  stations 
or  depots §  -"^^ 

penalty  for  charging  higher  rates  than  those  in  schedule  posted .  .      §  32 

statute  as  to  charging  rates  when  in  conflict  with  Interstate  Com- 
merce Act §  32 

rate  regulations §  "^- 

incorporated  by  act  of  Congress;  power  of  States  to  establish 

rates  for. §  "^- 

may  be  compelled  by  State  to  perform  certain  duties,  though  i)er- 

formance  may  entail  loss §  -^  ^ 

statute  as  to  certain  safety  appliances,  when  valid §  47 

statute  as  to  heating  passenger  cars;  validity  of §  47 

when  company  not  exempt  from  State  privilege  tax  on  cab  service 
on  ground  of  interstate  commerce §  "^7 


844  INDEX 

RAILROAD  COMPANIES— Continued: 

statute  requiring  certain  number  of  cars  to  be  furnished  on  certain 

day;  when  unconstitutional §  47 

hmitation  of  liability;  injury;  interstate  shipment §  47 

interstate  transportation  of  cars  not  delivered  to  consignee  still 

protected  by  Interstate  Commerce  Act §  47 

right  of,  to  adopt  provisions  for  through  traffic §  47 

power  of  Congress  to  regulate §  47 

when  State  may  prohibit  running  of  freight  trains  on  Sunday .  .  §  48 

discrimination;  terminal  charges note,  §  49 

effect  of  ownership  of  stock  by,  in  producing  corporation  under 

commodities  clause  of  Hepburn  Act §  49 

when  company  is  railroad  company  although  originally  chartered 

principally  for  mining;  Hepburn  Act §  49 

commodities  clause  of  Hepburn  Act §  49 

transportation  of  commodity  mined,  manufactured  or  produced; 

effect  of  Hepburn  Act §  49 

State  requirement  that  interstate  and  other  trains  stop  at  specified 

stations §  50 

"  adequate  or  reasonable  facilities  " ;  State  requirement  that  trains 

stop  at  certain  stations note,  §  50 

interstate  commerce;  transportation  of  intoxicating  liquors  into 

State §§51,  52 

interstate  shipment;  when  complete;  delivery §  52 

inspection  of  hides;  interstate  commerce §  58 

mode  of  taxation  of §  61 

State  tax  upon  gross  receipts  of §  61 

corporation  organized  under  laws  of  United  States;  effect  as  to 

exemption  from  taxation §  75 

situs  of  personal  property  for  taxation §  76 

taxation  of,  to  meet  expenses  of  railroad  commissions §  76 

charter  stipulation  that  percentage  of  gross  receipts  be  paid  State 

is  constitutional §  76 

powers  of  State  to  tax §  76 

powers  of  State  as  to,  and  over §  76 

incorporated  in  other  States ;  tax  on  stock  of §  77 

suit  to  enjoin  certification  of  assessed  value  of  property;  jurisdic- 
tion   §  81 

company;  petition  for  apportionment  of  commissioners  of  ap- 
praisal; jurisdiction §  81 

condemnation  proceedings;  jurisdiction §  81 

action  against,  for  negligence  causing  death;  definition  of  juris- 
diction applied §  82 

bill  in  equity  to  decree  railroad  company  exempt  from  taxation .  .  §  83 
injunction  to  restrain  commission  from  approving  and  certifying 

assessment  of  taxes  against §  83 

failure   to  signal  at  crossing;   when  jurisdiction   of  action   for 

penalty  acquired §  83 


INDEX  g45 

RAILROAD  COMPANIES— Continued: 

viaduct  crossing;  apjjortionincnt,  of  ropairw  by  city  council §  «>;{ 

valuation  of  property;  duty  and  power  of  lusHcssinciit  boards  ...  §  !M 
action  against,  to  recover  damages  for  infection  of  cattle,  note,  § '.MJ 
equipment  of  interstate  railroad  subject  to  coiitrf)!  of  Interstate' 

Commerce  Commission k  ^^^•^^ 

routes  of  State  corporations;  State  may  determine §  107 

jurisdiction  of  railroad  and  like  commissions §107 

order  of  commission  to  compel  receiving  loaded  cars  and  to  haul 
same  to  connecting  line  without  compensation  for  loss,  etc., 

when  beyond  own  control note'   j  1 1 1 

delay  in  transportation  of  goods note,  §  11 1 

jurisdiction  of  railroad  commissioners;  stopping  interstate  trains.  §  lis 
delivery  of  cars;  train  connections;  jurisdiction  of  railroad  com- 
missioners    6  11') 

railroad  "facilities" note,   §§  1 1'j,    12»j 

condemnation  proceedings  for  terminal   branch;  jurisdiction  of 

State  Crossing  Board ij  1  "-7 

right  of  way;  decision  of  Secretary  of  Interior;  final  determinalifjn  §  i;j(j 
rate  regulation;  appeal  on  question  of  to  State  Supreme  Court 

before  suit  in  Federal  Court §  l.")2 

suit  by  owners  of  stock  of,  to  cancel  deeds  and  leases §  168 

when  equity  has  no  jurisdiction  of  bill  to  recover  lands  of §  170 

where  State  engages  in  business  of  common  carrier §  171 

presumption  as  to  citizenship  of  members  of §  174 

hne  in  two  or  more  States;  citizenship  of §§  17S,  170 

citizenship  of  where  two  or  more  consoliflated §  IMJ 

suit  to  restrain  unreasonable  rates bj^;  jurisdiction ;  where  "found  "  §  1S7 
suit  by,  in  State  Court,  to  condemn  land;  jurisdiction  of  Circuit 

Court §  207 

taxation  of  property  of;  injunction;  I'ederal  question;  jurisdiction 

note,  8  JOS 
resumption  of  land  granted  to;  Federal  question;  jurisdiction 

note,  §  -JOS 
suit  to  enjoin  putting  schedule  into  effect;  jurisdiction  of  Circuit 

Court §  2(K) 

sued  jointly  with  servant  for  negligence;  removal  to  Federal 

Court §214 

nature  and  extent  of  rights,  powers  or  properties note,  §  223 

action  by,  for  injury  to  property §  2 12 

right  to  bring  suit  against  not  dependent  on  comi)liance  with  stat- 
ute     §^»'' 

de  facto;  collateral  attack ;  estoppel §  24S 

cannot  question  right  of  another  corporation  to  exercise  powers.     §  2I".» 

lease  by;  suit  to  establish;  propc^r  parties §  2'>() 

when  State  necessary  party  to  suit  to  foreclose r2')0 

mandamus  in  name  of  State  to  compel  performance  by,  of  duty       §  2.*)1 
mandamus  to  compel  to  build  station note,  §  251 


846  INDEX 

RAILROAD  COMPANIES— Continued: 

United  States  as  r-^rty  plaintiff  in  suit  against §  252 

intent  of  Congress  in  authorizing  attorney-general  to  sue  in  equity 

the  Union  Pacific  Railroad  Co §  252 

reorganization;  suit  against  committee  for  breach  of  trust §  253 

not  liable  for  torts  or  contracts  of  predecessor §  254 

payment  by,  in  stock  to  contractor;  not  a  stock  subscription.  ...    §  293 

when  can  and  cannot  maintain  ejectment §  315 

action  for  ejectment  against §  315 

hability  for  acts  of  servant note,  §  317 

when  company  liable  on  account  stated;  assumpsit §  322 

action  by  passenger  for  ejectment  from  train;  when  ex  delicto.  ...  §  327 
action  ex  delicto  against,  for  damages  caused  by  delay  in  shipment  §  327 
trespass  quare  clausum  fregit  lies  against  railroad  corporation ....   §  330 

when  liable  in  trespass  quare  clausum  fregit §  330 

when  company  not  liable  for  acts  of  servant  causing  arrest  of 

passenger §  331 

embankment  when  nuisance;  causing  backwater §  334 

company  not  responsible  for  libel  of  employe  by  its  superintend- 
ent    §  335 

liable   for   malicious  prosecution   instituted   through   malice  of 

officers  of §  336 

action  against  company,  with  others,   for  conspiracy  to  expel 

plaintiff  from  brotherhood  of  locomotive  engineers §  338 

when  equity  will  not  compel  contract  with  third  person  to  carry 

on  public  warehouse §  403 

when  no  interest  as  party  to  restrain  construction  or  extension 

of  street  railroad §  404 

injunction  by  and  against §  426 

See  Bridges;  Common  Carriers;  Constitutional  Basis  of  Actions 

and  Defenses  (III,  IV);  Foreclosure;  Limitation  of  Liability; 

Master  and  Servant;  Navigable  Waters. 

RAILROAD  CROSSINGS, 

State  may  impose  entire  expense  of  change  of  grade  at §  21 

statute  requiring  expense  of,  to  be  charged  against  railroads; 

reserve  power  to  alter  or  amend  charter §  25 

failure  to  signal  at;  when  jurisdiction  of  action  for  penalty  ac- 
quired      §  83 

See  Grade  Crossings. 

RAILROAD  STATIONS, 

abandonment  of;  refusal  or  consent  of  railroad  commissioners.  .  .  §  120 
erection  and  maintenance  of  depots;  jurisdiction  of  railroad  and 

warehouse  commission §  120 

RAILWAY  COMMISSION.    See  Railroad  Commission. 


INDEX  847 

RAILWAY  COMMISSIOXKI^S, 

jurisdiction  of,  under  Knglislidccisions note,  §  I  l.'l 

jurisdiction  when  sittinji  as  arnitnitors '  §  141 

jurisdiction  of  Enfi,lisli  Higli  Court  of  Justice  in  respect  to §  141 

RATE  REGULATION.      See  Constitutioiuii  Ba-sis  of  Actions  and 

Defenses  (IV). 

REAL  ESTATE, 

value  of;  elements  in  fixing  rates §  ;ifi 

equity  jurisdiction  to  remove  cloud  upon  or  to  (luiet  title.  .    §§  107,  HiK 

equity  has  jurisdiction  to  i)ro1("ct  from  trespass §  23G 

REBATES, 

connecting  carriers;  right  of  initial  carrier §  104 

joint  through  routes;  right  of  initial  carrier  to  reserve  in  published 

notice  right  to  route  goods  b(\yond  its  own  terminal §  104 

by  private  car  company  when  a  violation  of  statute §  104 

accepting;  Elkins  Act;  carrier  liable  to  prosecution  joint  rate.  .  .  .§  452 

accepting;  when  carrier  liable  as  party  to  joint  rate;  Elkins  Act.  .  §  452 

construction  of  Elkins  Act;  criminal  intent §  452 

construction  of  Elkins  Act;  "device"  to  obtain  rebates §  453 

discrimination  in  rates;  Elkins  Act;  criminal  law;  single  con- 
tinuous offense;  place  of  trial §  458 

See  Constitutional  Basis  of  Actions  and  Defenses  (IV,  V); 
Criminal  and  Penal  Offenses;  Jurisdiction  of  Corporation 
Supervisory  Bodies. 

RECEIVERS, 

franchises  in  hands  of;  equity  juri.sdi(;tion  to  protect §  \(\7 

of  national  bank;  removal  of  suit  by §  21- 

appointment  of  docs  not  affect  corporate  existence §  239 

suit  by  in  own  name;  statute §  239 

effects  of  decree  appointing  on  suits §§  239,  240 

appointment  of  in  suit  by  minority §  2(U) 

suit  by  policy  holder  against  insurance  company  for §  27t» 

merger  in  decree  for,  of  rights  to  sue  stoc^kholder §  278 

right  of  creditor  to  intervene  in  suit  by §  2S5 

right  of  action  by  stockholder  after  appointment  of §  285 

should  sue  to  recover  corporate  property §  285 

enforcing  liability  of  stockholder  through  bill  by §  290 

action  at  law  against,  and  against  corporation  for  damages  for 

personal  injuries §  318 

RECORDS, 

of  Federal  Courts;  absence  from  all  of  jurisdictional  facts  is  im- 
material   §  ^2 


848  INDEX 

RECORDS— Continued : 

question  of  jurisdiction  of  Federal  Supreme  Court  arising  on 

face  of §  157 

what  should  be  shown  by ;  removal  of  suits §  206 

presentment  of  P^ederal  question §  210 

what  must  be  shown  by;  removal  of  suits;  separable  controversy; 

joint  action §  216 

REGULATION  AND  CONTROL.      See    Constitutional    Basis    of 
Actions  and  Defenses  (III). 

REFORMATION, 

of  insurance  policy;  policy  holder  and  payee  as  parties §  404 

of,  or  relief  from,  written  instruments  or  contracts §  412 

REINSURANCE, 

contract;  power  of  Secretary  of  State  to  approve §  101 

REMANDING  CAUSE, 

to  Interstate  Commerce  Commission §  135 

REMEDIES, 

petitioner's  right  to  elect  on  denial  of  petition  for  removal §  217 

against  promoters §  259 

exhausting  remedies  against  corporations  as  conditions  precedent 

to  suit;  stockholder's  liability §§  307,  308 

when  remedy  is  by  action  at  law  and  not  by  mandamus §  351 

when  remedy  to  forfeit  franchise  and  not  mandamus  is  proper.  .    §  353 
when  remedy  in  equity  and  not  by  mandamus;  injunction;  manda- 
tory injunction §  354 

See  Actions  Ex  Contractu;  Actions  Ex  Delicto;  Conditions  Prec- 
edent; Equity;  Actions  at  Law. 

REMOVAL  OF  SUITS, 

condemnation  proceedings  taken  to  State  Court  may  be  removed 

to  Federal  Court §  127 

to  Federal  Courts;  corporation  of  two  or  more  States §  179 

to  Federal  Court;  effect  of  statute  as  to;  jurisdiction §  198 

under  Judiciary  Act  of  1888 §  205 

what  record  must  show §  206 

petition   for   insufficient,  as  to  showing  diversity  of  citizenship 

note,  §207 
not  removable  unless  it  is  one  of  which  Circuit  Courts  given 

original  jurisdiction §  207 

corporation    created    by    Congress;    Constitution    and    laws    of 

United  States;  separable  controversy §  211 

corporations  created  by  Congress;  national  banks §  212 

separable  controversy;  joint  action §  213 


INDEX  g4Q 

REMOVAL  OF  SUITS-Continuod: 

separable  controversy;  joint  action;  torts;  divereity  of  citizen- 
separable  controversy;  joint  action;  fraudulent  joinder IVil 

separable  controversy;  joint  action;  what  recor.l  rnu«t  show"  '  '  l-m 
denial  of  petition  for;  petitioner's  right  to  elect  remedy  "  "  8  217 
denied  in  State  Court;  filing  answer  to  record;  asserting  affirma- ' 

tive  remedy;  denial  of  jurisdiction c  ^ju 

Federal  Circuit  Court  may  determine  removability  of  cause  and 

protect  such  jurisdiction;  injunction g  .,,0 

effect  upon  jurisdiction  of  State  Court  of §  220 

when  petitioner  entitled  to !  .,.,,^ 

ordered  by  Circuit  Court;  jurisdiction  of  Federal  Supreme  Court.  §  221 
See  Courts. 
RENT, 

suits  by  stockholders  to  compel  successors  in  interest  of  lessee  to 
pay  rent  reserved c  271 

RENTAL 

charge  for  use  of  streets;  Constitution  and  laws  of  State  may 
impose ^  ... 

charges;  taxes;  imposed  upon  telegraph,  etc.,  companies;  reason- 
ableness of c  ., . 

REORGANIZATION, 

of  corporation;  effect  of;  parties §  253 

of  corporation  into  a  foreign  one;  parties  defendant §  253 

committee;  suit  against  for  waste  and  misapplication §  253 

of  corporation;  extent  of  hability  of  new  corporation;  of  duties  of 

note,  §  254 

agreements  by  purchasers;  foreclosure  and  sale  of  mortgage §  420 

of  corporation.     See  Successor  Corporation. 

REORGANIZED  CORPORATION, 

as  party §§  2.53,  254,  255 

reorganized  or  successor  corporation §§  253,  254,  255 

REPLEVIN, 

of  property  by  cashier;  bank  not  necessary  party §  257 

claim  and  delivery §  341 

boom  company  cannot  replevy  logs  illegally  obtained §  341 

does  not  lie  against  agent  of  corporation  who  holds  possession 
only  as  agent §  341 

RES  ADJUDICATA, 

defense  of  not  available  on  motion  to  dismiss  appeal §  s;} 

when  agreement  to  abide  result  of  test  suits  void §  U3 

See  Judgments. 

54 


850  INDEX 

RESCISSION, 

of  sale  of  stock;  right  of  corporation §  259 

of  sale  of  stock;  voidable  for  fraud §  259 

of  sale  of  stock;  when  subscribers  not  entitled  to §  256 

See  Equity. 

RESIDENCE.     See  Citizenship. 

RESOLUTION, 

of  city  council.     See  City  Council. 

RESPONDENT.     See  Parties. 

REVENUE, 

public.     See  Ta.xation. 

REVENUE  AGENT, 

bill  to  enjoin  him  from  beginning  or  advising  suit  to  be  brought 

against  railroad  company §  83 

REVISED    STATUTES   OF   UNITED  STATE.3.      See   Statutes; 
United  States  Revised  Statutes. 

REVISORY  POWER.     See  Powers. 

RIGHT  OF  WAY, 

railroads;  conclusiveness  of  decision  of  Secretary  of  Interior.  ...    §  130 

of  railroad  when  ejectment  by  landowner  does  not  lie §  315 

See  Ways. 

RIPARIAN  RIGHTS, 

determination  of,  in  equity §  402 

ROUTES, 

of  railroads  created  by  State;  State  may  determine §  107 

s 

SAFETY  APPLIANCES.     See  Railroads. 

SALARIES, 

of  railroad  commissions;  power  of  State  to  impose  same  Ujwn 

public  service  corporations §  21 

and  expenses  of  board  of  commissioners  of  electrical  subways  may 
be  assessed  on  company §  31 

SALES, 

on  margins;  liberty  to  contract §  12 


INDEX  851 

SALES — ('onlintind: 

ordor  of,  in  iicfion  to  onforce  mcchanif'.s  lien;  Hultjccl-rimKcr  and 

jurisdiction  over  it  defined k  ^ 

compulsory,  of  gas  or  electric  light  plant  to  city;  "Hpecial  com- 
mission," to  hear  and  adjudicate §  102 

of  stock,  etc.;   prospectus  to  induce  fraud  and  decent §  .T^o 

on  foreclosuH!  of  mortgage;  priorities;  rights  of  parties §  417 

proceeds  of,  on  foreclosure  of  mortgage;  rights  of  parties;  a<ljust- 

ment  of  claims;  accounting §  417 

of  corporate  stock,  cancellation  or  rescission  on  setting  aside.  ...    §  l.'Jfi 

contract  of,  of  corporate  stock;  specific;  performance §  439 

See  Foreclosure. 

SALESMAN.     See  Traveling  Salesman. 

SALVAGE, 

corporation  as  salvors  may  maintain  suit  for §  230 

SALVORS, 

corporations  as,  may  maintain  suit  for  salvage §  230 

SAVINGS  BANKS, 

State  tax  law  as  to,  may  not  violate  obligation  of  contract  clause 
of  Constitution §  68 

taxation;  obligations,  securities,  bonds,  stocks  notes,  etc.,  of 
United  States §§  72,  73,  74 

action  against  by  transferees  of  account;  jurisdiction  of  New  York 
municipal   court note,     §  89 

SAVINGS  SOCIETIES, 

when  tax  on  is  franchise  tax §  74 

SCHEDULES, 

of  published  rates;  publication  of §  i{2 

of  rates;  publication  of §  H>5 

of  rates  furnish  only  lawful  rates  until  changed  by  Interstate 

Commerce  Commission §  I'Wj 

for  running  trains;  power  to  regulate §111 

interference  of  equity  to  enjoin  enforcing  schedule  of  rates §  ]'A) 

See  Constitutional  Basis  of  Actions  and  Defenses  (111,  IV). 

SEAL, 

mandamus  to  compel  surrender  of  corporate  seal §  363 

SECRETARY  OF  AGRICULTURE, 

no  power  to  regulate  interstate  commerce,  under  Cattle  Conta- 
gious Disease  Act s  '-^J 


852  INDEX 

SECRETARY  OF  COMMERCE  AND  LABOR, 

enforcement  by,  without  judicial  trial,  of  penalty;  fifth  amend- 
ment; due  process  of  law §  100 

enforcement  by,  without  judicial  trial  of  penalty  on  transportation 

company;  notice  and  hearing;  civil  and  criminal  action §  100 

SECRETARY  OF  INTERIOR, 

jurisdiction  of  courts  over §  129 

decision  as  to  railroad  right  of  way;  conclusiveness  of §  130 

SECRETARY  OF  STATE, 

power  of  to  approve  reinsurance  contracts §  101 

suit  against   by   foreign    corporation   to   prevent   revocation   of 
authority  to  do  business §  250 

SECRETARY  OF  WAR, 

power  of  as  to  bridges  over  navigable  waters §  56 

SECURITIES, 

of  United  States;  taxation  of  savings  banks §§  72,  73,  74 

of  United  States;  deposits  of  savings  societies  invested  in;  taxation     §  74 

SELLER.     See  Vendor. 

SEPARABLE  CONTROVERSY, 

removal   of  suits §§211,  213,  214,  215,  216 

removal  of  suits;  joinder  of  parties §§  213,  214,  215,  216 

joint  action;  torts;  removal  of  suits §  214 

fraudulent  joinder;  removal  of  suits §  215 

joint  action;  removal  of  suits;  what  record  must  show §  216 

SERVANT.     See  Master  and  Servant. 

SERVICE, 

by  publication;  averment  of  residence  as  basis  of  order  for.  .note,  §  173 

of  proces8-,on  foreign  corporation §  181 

of  process  on  foreign  corporation  doing  business  or  having  agent 

or  office  in  State note,  §  181 

See  Notice;  Process;  Summons. 

SHAREHOLDERS.     See  Stockholders. 

SHARES.     See  Capital  Stock;  Stock. 

SHERMAN  ANTI-TRUST  ACT, 

when  corporation  and  not  stockholders  should  sue  under §  273 

See  Criminal  or  Penal  Offenses. 


INDEX  853 

SHIPMENTS, 

requirement  that  certain  number  of  cara  be  deliveretj  on  spec- 
ified day.  when  unconstitutional 1 47 

of  tank-oil;  jurisdiction  of  Interstate  Commerce  CommiBsiou  an 
to  charges;  discrimination {  IO5 

SHIP  PASSENGER  LAWS, 

regulation  and  (-(jntrol  as  to 5  Ig 

SHIPPER, 

proceeding  by,  where  aggregate  charges  excessive,  though  tcnninal 
charge  reasonable §3.'; 

where  must  first  resort  for  relief  in  case  of  rate  regulation;  Uj 
courts  or  to  commission §§  i:{4,  1,01 

indebtedness  for  demurrage;  jurisiliction  of   Federal   C-ourts   to 

detennine  same  in  tiie  first  instance §  I'M 

action  by  against  carrier §  243 

SHOOTING, 

person;  liability  for  acts  of  servant  note,  §  317 

SLANDER, 

corporation  may  be  liable  for  slandering  business .  .  .  , §  335 

SLAUGHTER  HOUSES, 

of  corporations;  regulation  and  control §  15 

SMELTERS, 

regulation  and  control  of  hours  of  labor  in §  18 

SOLICITOR.     See  City  Solicitor. 

SPECIAL  ACTIONS, 

or  proceedings  exclusive  of  quo  warranto §  383 

"SPECIAL  CASES," 

jurisdiction  in,  defined  and  construed 5  87 

rehef  in  by  railroad   commissioners;  refu.sal  of  not  reviewable 

by  courts •    5  '•>'' 

"SPECIAL  COMMISSION," 

to  hear  and  adjudicate,  not  a  "court" §  HJ"^ 

SPECIAL  FRANCHISE  TAX, 

5  I'M 

certiorari  to  review .   »  i-i 

SPECIAL  TRIBUNAL, 

"Special  Commission"  to  hear  anil  adjudicafc.  not  a  "court"; 
gas  and  electric  plant ^  '''- 


854  INDEX 

SPECIPIC  PERFORMANCE.     See  Equity. 

STAMP  TAX, 

law  of  State  when  not  protected  by  commerce  clause  of  Federal 
Constitution §  60 

STANDARD  FIRE  POLICY, 

delegation  to  commissioners  to  draft  form  of;  unconstitutional.  .     §  97 

STATE  AGENCIES.     See  Taxation. 

STATE  AUDITOR, 

when  cannot  be  compelled  to  issue  certificate  to  foreign  insurance 

company  to  do  business note,  §  128 

courts  will  take  jurisdiction  of,  as  to  control  and  disposition  of 

insurance  trust  fund §  128 

See  Auditor. 

STATE  BANK, 

converted  into  national  bank;  right  to  sue  in  former  name §  232 

STATE  BOARD  OF  CONTROL, 

jurisdiction  to  adjudicate  water  rights §  93 

is  administrative  body §  93 

STATE  BOARD  OF  LAND  COMMISSIONERS, 

jurisdiction  of §  129 

STATE  COMPTROLLER, 

suit  to  enjoin  certification  of  assessment  to;  jurisdiction §  81 

STATE  CORPORATION  COMMISSION, 

jurisdiction  and  powers  of §  108 

may  declare  statute  imposing  fine  or  forfeiture  unconstitutional.  §  112 
acts  judicially  in  determining  corporation's  liability  for  fine  or 
forfeiture §  1 12 

STATE  CROSSING  BOARD, 

jurisdiction  in  condemnation  proceedings  to  condemn  land  for 
railroad §  127 

STATE  GOVERNMENT, 

if  powers  of,  in  conflict  with  Federal  Government  former  must 

yield §  2 

Federal  and  State  Governments;  powers  of,  distinguished §  3 

STATES, 

when  not  impowered  to  retard,  etc.,  constitutional  laws §  2 


INDEX  855 

STATES— Continued: 

power  of  over  bridges  over  navigable  waters note,       {  2 

legislative  powei-s  of,  sovereign  in  all  matters  not  forbidden  by 

Federal  Constitution j  3 

what  powers  are  reserved  to note        (  3 

cannot  interfere  with  powers  of  national  government §  3 

Constitutions  of,  are  limitations  and  not  grants  of  power §  .*{ 

governmental  powers  and  powers  of  Federal  Covemraent  dis- 
tinguished         5 ;{ 

cannot  pass  laws   having  force  or  effect  over  [mtsoiih  beyond 

jurisdiction j  4 

cannot  pass  laws  having  force  or  effect  over  persons  or  property 

beyond  jurisdiction §  4 

to  what  extent  sovereign  and  independent 54 

legislature  not  prohibited  by  Federal  Ccjnstitution  from  exercis- 
ing judicial  powers §  4 

may  confer  upon  nonjudicial  bodies  certain  functions  that  may  be 

called  judicial (4 

power  of,  to  prescribe  conditions  for  doing  public  work §  0 

poHce  power  inherent  in  and   not  affected  by  Interstate  Com- 
merce Commission  or  post  roads §  8 

may  impose  conditions  precedent  to  doing  business  upon  foreign 

corporations §  19 

power  of  to  amend  charter  of  public  service  corporation §  22 

statutes;  railroad  bridges;  expense  of  change  of  grade  or  removal; 

police  power;  nonjudicial  question §  24 

statutes;   railroad   tunnels,   viaducts  and   crossings;  expense  of 

removal  or  repairs;  vested  rights §  25 

may  provide  for  protection  of  employes  of  railroad §  27 

right  of  to  augment  or  limit  carrier's  liability §  29 

power  to  establish  railroad  rates 5  32 

cannot  grant  away  its  right  to  limit  charges  of  common  carriers, 

except,  etc 5  32 

power  to   establish   rates  for  railroad   incorporated  by  Act  of 

Congress §  32 

grant  of  power  to  railroad  to  fix  rates  does  not  preclude  State 

from  fixing  rates  for §  32 

power  of  to  regulate  and  prevent  discrimination  in  rales  is  sub- 
ject to  constitutional  limitations §  33 

may  compel  performance  by  railroads  of  certain  duties  though 

loss  may  be  entailed »  34 

right  of  to  bargain  away  right  to  fix  water  rates 5  37 

requirement  that  interstate  and  other  trains  stop  at  specific! 

stations ^/f] 

power  of  to  obstruct  navigable  waters  by  bridges J  •'><» 

cannot  compel  corporations  to  pay  for  privilege  of  engaging  in 

interstate  commerce »  '"" 

control  of  Federal  agencies;  national  banks 5  t>5 


856  INDEX 


I«<^ 


STATES— Continued: 

no  power  to  tax  Federal  agencies §§  65-79 

cannot  tax  any  of  the  means  employed  by  P'ederal  Government 

to  execute  its  powers §  69 

power  of,  as  to  taxation ;  generally §  67 

may  tax  corporation  as  entity §  67 

State  agencies;  exemption  of  from  taxation §  69 

cannot  exclude  from  its  limits  corporation  engaged  in  interstate 

commerce §  75 

extent  to  which  cannot  tax  franchises  or  privileges  conferred  by 

United  States §  75 

powers  of,  as  to  and  over  railroads §  76 

powers  of,  as  to  exemptions  from  taxation §  79 

suit  against,  though  nominally  against  an  individual §  83 

jurisdiction  as  applied  to,  defined §  90 

may  designate  agencies  to  carry  out  police  regulations §  92 

power  of,  to  remove  or  suspend  railroad  and  Hke  commissions 

§§  107,  108,  109 

may  regulate  and  control  use  of  water,  rates,  etc §  95 

power  of,  as  to  railroad,  State  corporation,  public  service  and  like 

commissions §§  107-122 

nothing   in    Federal   Constitution    prevents    conferring    judicial 

power  on  nonjudicial  bodies §  138 

cannot  impart  immunity  to  its  attorney-general  from  responsi- 
bility to  United  States §  155 

whether  suits  against  railroad,  etc.,  commissions  are  suits  against 

State §  155 

parties  in  suit  against,  in  Court  of  Claims  in  New  York §  171 

where  engaged  as  a  common  carrier §  171 

suit  by,  for  injunction;  jurisdiction  of  Federal  Supreme  Court.  .   §  186 

not  a  citizen;  jurisdictional  purposes §  186 

statute  as  to  removal  by  insurance  company  of  action  to  Federal 

Court;  effect  of;  jurisdiction §  198 

legislature  cannot  change  or  modify  maritime  law note,  §  198 

laws  as  affecting  Federal  jurisdiction note,  §  198 

power  of,  to  limit  jurisdiction  of  its  courts;  power  to  administer 

common  law §  199 

only  can  test  corporate  authority §  249 

as  party;  collateral  attack §  249 

or  State  officers  as  indispensable  or  proper  parties  defendant  in 

suits  by  corporation §  250 

as  indispensable  or  proper  parties  defendant  in  suits  by  corpora- 
tions     §  250 

or  State  officers  as  parties  plaintiff  in  suits  against  corporation .  .    §  251 
as  party  for  injunction  to  remove  obstruction  created  by  bridge 

structure  in  and  over  navigable  river §  404 

as  party;  injunction;  nuisances §  432 

as  party;  quo  warranto §  390 


455 


INDEX  ^  H57 

STATES -Continued: 

jurisdiction  over  violation  of  Anti-trust  Act  where  aKreeraent 

made  out  of  State 

See  Constitutional  l^isis  of  Aclicjiis  and  Defenses;  Criiuina!  and 

Penal  Offenses;  Legislation;  I'artiea;  l'olic(!  I'owc.th;  Powem; 

Statutes. 

STATION, 

mandamus  to  compel  railroad  eomjjany  to  build note,  §  2r,l 

STATUTES, 

State  statute  must  give  way  to  Federal  statute  if  in  conflict.  ...       §  2 
production   of   Looks   antl   pa|)ers   hy   corijoralion   iuchulf   what 

ntite,        §  4 

territorial  legislation,  revisory  power  of  Congress  over §  5 

Revised  Statutes,  §  720,  legislative  |>roceeilings  are  not  proceed- 
ings in  courts  within  meaning  of §  .-, 

when  construed  as  not  authorizing  purcha.se  of  other  or  parallel 

railroad  lines note,     §  10 

act  of  Congress  of  1890  to  protect  trade  and  against  unlawful 

restraints  and  monopolies  construed  and  applied note,     §  11 

liberty  to  contract §§11    12 

classi(i(!ation  statutes;  Fourteenth  Amendment §  i:i 

classification  as  to  business  or  corporations  or  persons  must  not 

be  arbitrary §  i;} 

classification  as  to  corporations;  constitutional  law §  i:{ 

discrimination  as  to  railroads;  when  not  unconstitutional §  1  1 

cla.ssification,  need  not  be  logically  and  scientifically  accurate.  .     §  It 
regulation  and  control  of  foreign  corporations  and  limitations 

thereon §  20 

describing  a  mode  of  serving  process  upon  railroad  companies 

when  not  unconstitutional §  22 

Employers'  Liability  Act  of  Congress  and  effect  of  decision  in 

Employers'  Liability  Cases §  2(5 

intent  and  purpose  of  Knif)loyers'  Liability  Act §  20 

Employers'  Liability  Act  of  Congress  supersedes  prior  territorial 

legislation §  20 

act  of  Congress  as  to  discharge  of  emploj'd  when  member  of  labor 

organization;  criminal  offenses §  20 

act  of  Congress  regulating  hours  of  labor  of  employes  of  carriers.       20 
act  of  Congress  imposing  liability  upon  carriers  in  favor  of  em- 
ployes, when  invalid §  20 

act  of  Congress  and  Stat(>  law  when  former,  as  to  hours  of  labor, 

gO(\s  into  effect  with  relation  to  State  law §  20 

imposing  liability  for  negligence  of  fellow  servant;  effect  as  to 

contracts  for  insurance  or  relief §  20 

may  give  lien  for  wages  of  employees  of  corporations §  27 

may  proviile  for  automatic  couplers 5-7 


858  INDEX 

STATUTES— Continued : 

regulation  as  to  monthly  payment  of  employes §  27 

may  provide  for  examination  and  licensing  of  locomotive  engineers.     §  27 
requiring  railroad  employes  to  distinguish  color  signals;  examina- 
tion of  employes §  27 

Federal  statute  to  insure  humane  treatment  of  live  stock  by 

carriers §  28 

classification  with  railroad   employes  of  all  persons,   including 

railway  postal  clerks,  not  carriers §  29 

State;  and  acts  of  Congress  providing  for  damages §  30 

may  provide  for  damages  for  killing  live  stock §  30 

providing  for  presentation  and  adjustment  of  claims §  30 

limiting  time  for  adjustment  of  damage  claims §  30 

may  provide  for  recovery  of  damages  against  railroads  for  loss  by 

fire  from  engines §  30 

may  impose  penalty  upon  carriers  for  nonadjustment  of  claims  in 

time  limited §  30 

providing  for  attorneys'  fees  in  suits  against  railroads §  30 

as  to  penalties ;  railroads §  30 

may  provide  for  occupation  of  streets  by  telegraph  and  other 

electrical  companies §  31 

unconstitutional,  does  not  bind  foreign  corporation  where  citizen 

of  State  not  bound §  39 

construction  of  commodities  clause  of  Hepburn  Act §  49 

§  3408,  Rev.  Stat.  U.  S.;  savings  banks;  taxation §  72 

requiring  production,  by  corporation,  of  books  before  grand  jury.  §  138 
validity  of,  as  ground  of  jurisdiction  of  Federal  Supreme  Court .  .  §  158 
of  State  as  to  removal  of  suit  by  insurance  company  to  Federal 

Court;  effect  of §  198 

as  affecting  Federal  jurisdiction note,  §  198 

imposing  penalty;  judgment  of  State  Court;  review  by  Federal 

Supreme  Court §  208 

assessing    national    bank    shares;    judgment;    Federal    Supreme 

Court  no  power  to  review §  209 

defense  of  noncompliance  by  foreign  corporation  with §  236 

presumption  as  to  compliance  by  foreign  corporation  with  State 

law §  237 

as  to  suits  by  or  against  dissolved  corporations §§  238,  239 

as  to  liability  of  stockholders  to  creditors §  281 

in  New  York  as  to  consideration  for  issue  of  stock  and  bonds 

note,  §293 
of  State  enlarging  equitable  remedies;  jurisdiction  of  Federal 

Circuit  Court §  402 

retroactive  effect  of  penal  statute;  liability  under  of  party  carry- 
ing out  illegal  agreement  executed  prior  to  its  passage §  454 

See  names  by  which  various  statutes  designated.  See  Constitu- 
tional Basis  of  Actions  and  Defenses;  Police  Power;  I'rans- 
portation  Law. 


INDEX  859 

STATUTORY  ACTIONS, 

double  damages  for  loss  of  baggage 5  314 

when  and  when  remedies  not  exclusive  of  mandamus §  349 

or  proceedings  when  (exclusive  of  quo  warranto 5  3g4 

when  remedy  adequate;  equity x  408 

STEAMBOAT  OWNERS, 

liability  for  acts  of  servant note,  §  ;M7 

STEEL  RAILS, 

rates  on;  orders  of  Interstate  Commerce  Commission  as  to  §  wr, 

STOCK, 

charter  of  bank  may  limit  amount  of  tax  on  shares  of §  OS 

tax  on  transfers  of 5  gj^ 

nonresident  stockholders;  tax  on  transfers  of  stock 5  fiS 

of  national  bank;  tax  upon j  71 

insurance  stock  may  be  taxed  on  income  instead  of  value §  71 

notes,  etc.,  of  Unit(d  States;  savings  banks;  taxation §§72,  73 

issued  for  loans  to  United  States;  taxation §  73 

of  railroads  incorporated  in  other  States;  tax  on §  77 

and  bonds;  issue  of;  jurisdiction  of  Public  Service  Commission.     §  117 

suit  by  owner  of,  to  cancel  railroad  deeds  and  leases §  168 

unpaid  subscriptions  to  constitute  a  trust  fund §  279 

where  issued  in  payment  of  property,  gooils  or  accounts §  293 

statute  in  New  York  as  to  consideration  for  issue  of note,  §  293 

issued  for  property;  valuation  should  be  fair  and  just;  necessity 

of  good  faith  in  transaction §  294 

issued  for  property;  material  overvaluation §§  29'),  297 

issued   for  property;  material  overvaluation;  stockhoklers  not 

necessarily  liable  to  creditors  therefor;  good  faith §  295 

issued  for  property;  shareholder  may  be  liable  where  overvalua- 
tion shows  fraud  upon  creditors  though  none  intended §  29<) 

issued  for  property;  valueless  property;  material  overvaluation.  .   §  297 
issued   for  property  which  subsequently   becomes  valueless  or 

consideration  fails §  -iW 

contract  to  take;  assumpsit note,  §  321 

refusal  to  pay  wit  hdrawal  value  of;  assumpsit §  321 

action  for  fraud  and  deceit;  misrepresentations  to  induce  sale  of; 

prospectus §  -^'^Q 

title  necessary  to  maintain  action  for  conversion  of §  340 

when  wrongful  refusal  to  transfer  on  books  amounts  to  conver- 
sion    §  ;«0 

trover  lies  for  wrongful  conversion  of §  340 

setting  aside  sale  of;  cancellation  or  rescission §  430 

pretended  purchase-  of;  remedy  in  equity §  4''W 

contract  to  sell;  specific  performance S  439 

See  "Bonus  Stock";  Capital  Stock;  Certificates;  Subscriptimi.-* 


8G0  INDEX 

STOCKHOLDERS, 

effect  of  ownership  of  stock  by  railway  company  in  producing 

corporation  under  commodities  clause  of  Hepburn  Act §  49 

nonresident;  tax  on  transfers  of  stock §  68 

bank  charter  may  limit  tax  on  stock  in  hands  of §  68 

tax  on  shares  of  stock  in  national  banks §  71 

when  tax  on  shares  is  tax  on  corporation  itself §  77 

shares  of  stock  in  hands  of,  and  capital  stock  of  corporation  may 

both  be  taxed §  77 

bills  by;  failure  to  aver  compliance  with  Equity  Rule  94,  does  not 

raise  question  of  jurisdiction  but  of  plaintiff's  right  to  sue §  83 

presumption  as  to  citizenship  of §  174 

as  to  corporation  being  entity  distinct  from note,  §  224 

law  regarded  in  corporate  proceeding  in  equity §  224 

same  in  different  corporations;  contracts  between;  suits §  226 

suit  by  to  enforce  corporate  right;  corporation  necessary  party.  .  §  229 
cannot  release  themselves  from  liability  by  transfer  to  new  cor- 
poration   §  253 

suit  by  affecting  internal  management  corporation §  260 

relation  of  managing  officers  to §  261 

suit  by  or  against  officers  or  directors;  corporation  as  party §  263 

suit  by,  against  directors;  negligence;   maladministration;  aver- 
ments necessary;  what  must  be  shown §  264 

appointment  of  receiver  at  suit  of  minority §  266 

relief  in  equity  to  minority  where  act  of  majority  fraudulent  note.  §  266 

rights  of  minority §  266 

suits  by  and  right  of  minority;  when  corporation  should  be  made  a 

party §  266 

suits  by  and  right  of  minority  creating  new  corporation;  consolida- 
tion agreement §  267 

when  may  and  may  not  sue  in  equity §  268 

sale  by  to  corporation  at  advance  on  market  price §  268 

suit  by  to  set  aside  sale  at  public  auction §  268 

suit  by  to  restrain  infringement  of  trade  mark §  268 

right  of  to  sue  in  equity  iu  a  Federal  Court  for  surplus  assets  after 

a  decree  of  forfeiture  of  franchises §  269 

suits  by  or  against  trustees  of  funds  for  dividends;  defenses; 

counterclaim §  270 

suits  by,  to  compel  successors  in  interest  of  lessee  to  pay  rent 

reserved §  271 

right  of  subsequent  stockholders  to  sue §  272 

when  corporation  and  not  stockholders  should  sue  under  Sherman 

Anti-trust  Act §  273 

when  corporation  should  sue  or  be  made  party  to  suit  by §  274 

when  may  be  made  party  defendant  by  court §  275 

refusal  of  court  to  permit  to  defend §  275 

as  necessary  parties  in  suit  by  poHcy  holder  against  insurance  com- 
pany for  accounting  and  receivership;  equity  jurisdiction §  276 


INDEX  801 

STOCKHOLDERS-Continued : 

liat)ility  to  creditors;  generally «  278 

liability  to  creditor  on  dissolution c  278 

right  to  sue  merged  in  decree  for  receiver §  278 

liability  to  creditors;  generally .  .  §§  li-M,  282 

liability  to  creditors  lus  afTected  by  statute 5  28^ 

and  members;  liability  as  partners k  282 

effect  of  sale  by  of  stock  on  liability 5  282 

constitutional  provisions  as  to  liability  of &  282 

of  national  bank;  liability  conditional §  2s2 

whether  liability  contractual,  stat  utory  or  penal §  281 

liability  for  debts  on  dissolution  is  rx  conlnidu {  28} 

nature  of  liability  under  Stock  Cori)oration  ].aw  of  New  York.  . .   $  284 

of  banks;  who  should  sue  to  enforce  individual  liability  of {  28."} 

right  of  action  after  receiver  appointed §  28.'j 

liability  of  nonresident g  28ti 

liability  of;  pleading  what  must  be  shown §  287 

liabihty  under  General  Manufacturing  Act  of  1848  in  New  York.   §  287 

liabihty  to  creditor's  unpaid  subscriptions  or  storks §§  288,  289 

payment  by  for  stock  must  be  actual  and  in  good  faith §  298 

liability  of  for  unpaid  subscriptions;  parties §  2tK» 

enforcing  liability  of  through  bill  by  receiver §  2'J) 

liabihty  of  to  creditors;  stock  without  consideration  or  for  less 

than  value;  "bonus  stock" §§  2'Jl,  292 

rights  of  "bonus  stock" §  292 

liabihty  to  creditors;  stock  issued  for  property;  material  over- 
valuation  §§  295,  297 

liable;  stock  issued  for  property;  fraud  on  creditore §  29«) 

extent  of  liability;  stock  issued  for  materially  overvalued  proj)- 

erty §  297 

valuation  placed  by  on  property  given  for  stocks  does  not  bind 

court. . §  297 

liability  to  judgment  creditors  for  unpaid  stock ;  parlies §  2'.>9 

conditions  precedent  to  suits;  demand  and  refusal;  exhausting 

remedies §§  •'{•M  -.'{12 

may  sue  after  demand  upon  and  refusal  of  corporate  authorities  to 

act;  shareholder  may  defend §  .'lOl 

when  demand  upon  and  refusal  by  corporate  authorities  to  act 

condition  precedent  to  suit §5  "^^^^  '^3 

when  may  sue  in  own  name  without  first  requesting  directors  to 

sue ...530.3 

bability;  exhausting  remedies  against  corporation;  when  judg- 
ment   and    execution    returned    unsatisfie<|    are   and    an-    not 

conditions  precedent  to  suit §§  307.  308 

liability;  dissolution  as  condition  i)recedent  to  enforcing  .-^ame         §309 
right  to  protect  corporation  when  directory  derelict :  when  demand 
upon  directors  for  relief  is  and  is  not  condition  pncnlnit   to 
suit;  Equity  Rule  94 §-^'^ 


862  INDEX 

STOCKHOLDERS— Continued : 

exhausting  remedies  against;  statute  limitations §  317 

may  be  sued  for  libel  by  joint-stock  company  in  England §  335 

injunction  against §  424 

transfer  of  land  for  stock  made  in  good  faith;  not  liable  to  creditor 

with  knowledge,  etc §  402 

remedy  of  in  equity  where  by-laws  increase  power  of  officers  and 

directors §  402 

suing  in  equity  sues  for  his  benefit  and  that  of  other  stockholders .    §  404 
right  of,  to  maintain  suit  in  equity  nominally  against  corporation 

but  really  for  its  benefit §  404 

suit  to  by  restrain  corporation  paying  tax §  404 

See  Equity 

STOCK  YARDS, 

police  power;  regulation  and  control §  15 

STOPPING  INTERSTATE  TRAINS, 

jurisdiction  of  railroad  commissioners §  118 

Street  railroad  company, 

regulation  of  location   and   maintenance  falls  within  limits  of 

judicial  departments,  when §  5 

city  may  make  reasonable  regulations  concerning  use  of  street  by.  §  21 

paving  and  repaying;  legislative  power  to  require §  22 

legislature  may  provide  for  occupation  of  streets  by §  31 

action  for  refusal  of  transfer;  penalty;  jurisdiction  of  New  York 

municipal  court note,  §  89 

power  of  borough  council  to  consent  to  location  of  is  legislative, 

not  judicial §  93 

use  of  streets  for;  joint  control  of  cities  and  railroad  commis- 
sioners; when  city  may  act  alone §  96 

resolution  of  city  council  requiring  it  to  replace  tracks,   etc.; 

jurisdiction  of  Federal  Circuit  Court;  injunction §  126 

"appeal"  from  action  of  common   council  of  city  in  refusing 

petition  to  place  overhead  wires §  139 

restraining  enforcement  of  tax  on §  164 

rights  of  abutting  owner §  242 

State  can  only  raise  question  of  invalidity  of  charter  of §  249 

suit  to  enjoin  acceptance  of  franchise  by §  258 

hability  for  acts  of  servant note,  §  317 

assumpsit  to  recover  cost  of  paving  street §  321 

when  mandamus  lies  and  does  not  lie  against  company §  369 

when  company  is  and  is  not  entitled  to  mandamus §  370 

when  steam  railroad  not  sufficient  interest  as  party  to  injunction 

to  restrain  constructing  or  extension  of §  404 

STREETS, 

use  of,  by  street  railroad,  may  be  regulated  by  city §  21 


INDEX 


863 


STREETS— Continued: 

rental  charKo  or  tax  may  he  itiipownl  for  me  of,  by  tcloKrHr)h, 

etc.,  companies '     .... 

occupation  of,  by  telegraph,  telephone  and  Ktre(!t  railways,  or  for 

other  electrical  purjKwcs;  icfii.sliiture  may  provide  for §  31 

use  of,  for  street  railroad.s;  con.sent  of  what  supervisory  bodit» 

necessary .  o- 

obstruction  in;  city  as  party  to  suit 5  251 

parties  to  suit  to  enjoin  construction  street  railway  in 5  251 

attorney-general  and  abutting  owners  im  parties  to  suit  to  rcBtrain 

construction  of .  051 

See  Abutting  Owners;  Electric  Street  Railway;  Street  Railroad 
Companies. 

SUBSCRIPTIONS, 

agreement  for;  promoters;  constructive  fraud §  259 

individual  liability  of  officers  and  trustees  to  creilitors  where 
capital  stock  not  subscribed;  suit  in  equity  by  creditors  against 

directors §  205 

to  capital  stock  constitute  a  trust  fund §  279 

unpaid;  when  are  and  arc  not  assets §  280 

to  aid  organization;  fictitious  and  colorable  subscriptions;  de- 
fense of  illegality  of  corporate  scheme §  283 

to  aid  organization;  fictitious  and  colorable  subscriptions;  fraud 

of  promoters §  2S3 

to  stock;  payment  to  contractor  in  stock  not §  293 

withdrawal  of;  failure  of  agent  to  notify  principal §  339 

prospectus  to  induce  sale  of  stock,  etc.,  or  subscriijtions  to;  fraud 

and  deceit §  339 

See  Capital  Stock;  Unpaid  Subscriptions. 

SUBWAYS, 

State  may  require  maps,  plans,  etc.,  of  electrical,  to  be  filed  with 

board §  31 

regulation  and  control  of  electrical §  31 

SUCCESSOR, 

of  corporation  can  assert  rights  of  original  corporation §  235 

SUCCESSOR  CORPORATION, 

as  party §§  253,  2.54.  255 

extent  of  liability  or  duty  of note,  §  251 

railroad  company  not  liable  for  tort  or  contracts  of  prHecpssor. .  §  251 

purchase  at  judicial  sale §  -•>* 

suit  by  bondholder  of  predecessor  to  compel  deliver>'  of  new 

bonds §2^'»-'» 

when  liable  for  debts  of  predecessor §  2.')5 

assuming  liability  of  predecessor §  ^^55 


864  •  INDEX 

SUE, 

right  of  corporation  to,  an  implied  one §  227 

power  to  sue  and  be  sued  includes  power  to  arbitrate §  231 

right  of  corporation  to,  as  affected  by  dissolution §§  238,  239,  240 

as  to  power  of  corporation  to;  parties.     See  Parties. 

SUIT, 

by  corporation  as  taxpayer;  suit  by  taxpayer  against  corporation.  §  258 
by  corporation  against  officers  or  directors;  damages;  accounting.  §  262 
by  stockholders  against  officers  or  directors;  corporation  as  party.  §  263 
by  stockholders  against  directors;  negligence;  maladministration; 

averments  necessary;  what  must  be  shown §  264 

by  and  rights  of  minority  stockholders;  when  corporation  should 

be  made  party §  266 

by  rights  of  minority  stockholders;  creating  new  corporation; 

consolidation  agreement §  267 

by  stockholder  against  trustee  of  funds  for  dividends;  defense; 

counterclaim §  270 

by  stockholder  to  compel  successor  in  interest  of  lessee  to  pay 

rent  reserved §  ^'^ 

by  creditors;  parties;  generally §  278 

See  Actions  Ex  Contractu;  Actions  Ex  Delicto;  Conditions  Prec- 
edent; Criminal  and  Penal  Offenses;    Equity;    Law,    Actions 

at;  Parties. 

SUMMONS, 

issued;  commencement  of  action §  83 

served  on  person;  jurisdiction  acquired  though  writ  defective  or 

summons  irregular §  83 

SUNDAY, 

when  State  may  prohibit  running  freight  trains  on §  48 

SUPERINTENDENT  OF  INSURANCE, 

may  be  enjoin^^d  from  revoking  hcense  of  foreign  insurance  com- 
pany    §  128 

SUPERVISORS, 

sitting  as  board  of  equalization  of  taxes;  jurisdiction. .  .  .  §  81 
jurisdiction  or  power  of  to  fix  water  rates §  95 

SUPREME  COURT.     See  Courts;  Jurisdiction. 

SURETY, 

relief  to,  in  equity §  239 

SURVEYOR  GENERAL, 

may  be  required  to  survey  all  logs,  etc.,  running  out  of  booms.  .      §  93 


INDEX  865 
T 

TANK-OIL, 

shipments;  rates  on;  orders  of  Interstate  Commerce  Commission 

as  to §  105 

TAXATION, 

exemption  from,  under  legislative  contract;  right  to  transfer.  ...  §  23 

may  be  enforced  against  foreign  telegraph  company §31 

tax  on  telegrams  as  restriction  upon  power  of  Congress  to  regu- 
late commerce §  46 

of  railroad  where  part  of  its  service  rendered  wholly  in  State  and 

not  as  part  of  interstate  commerce §§  47,  48 

when  railroad   company's  cab  service  not  exempt  from  State 

privilege  tax  on  ground  that  employed  in  interstate  commerce.  §  47 

power  of  State  to  impose,  upon  bridge  companies §  56 

interstate  commerce;  generally §  60 

of  corporations  doing  business  in  different  States;  mode  of §  61 

single  tax  upon  receipts  of  telegraph  companies §61 

of  all  instrumentalities  used  for  interstate  commerce §  61 

method  of  assessment  of  corporations  having  property  within 

and  without  State §  62 

of  railroads  on  account  of  transportation  within  State  or  within 

and  without  State §  62 

property  left  temporarily  within  State;  interstate  commerce.  ...  §  63 

of  bridge  and  bridge  companies;  interstate  commerce §  04 

when  no  exemption  from,  in  case  of  national  banks §  66 

power  of  States;  generally §  67 

right  of  corporation  to  be  heard  as  to  special  assessment §  67 

when  State  Court  in  making  assessment  does  not  assume  legis- 
lative functions §  67 

lack  of  pro\asion  in  law  for  notice  does  not  take  away  jurisdiction 

of  taxing  officers §  67 

method  of  assessing  value §  67 

how  far  matter  of  legislative  discretion §  67 

corporation  may  be  taxed  as  entity §  67 

tax  on  transfers  of  stock §  68 

exemption  from ;  impairment  of  obligation  of  contract §  68 

notice  of  proposed  assessment  of  property §  68 

obUgation  of  contract;  equal  protection  of  law;  due  process  of  law.  §  68 

bank  charter  may  limit  tax  on  stock §  68 

exemption;    instrumentalities    of    Federal    Government;    State 

agencies §  69 

when  checks  and  warrants  not  within  principle  of  exemption  of 

governmental  agencies  from §  69 

States  cannot  tax  any  of  the  means  employed  by  Federal  Govern- 
ment to  execute  its  powers §  69 

instrumentalities  of  Federal  Government;  qualification  or  limita- 
tion of  doctrine  of  exemption §  70 

55 


866  INDEX 

TAXATION— Continued : 

difference  in  methods  of  assessment  of  shares  of  national  and 

State  banks;  when  no  discrimination §  71 

national  banks §  71 

savings  banks;  obligations,  securities,  bonds,  stocks,  notes,  etc., 

of  United  States §§  72,  73 

when  tax  is  on  franchise §  74 

franchises;  capital  stock §  77 

"franchise";    "corporate   franchise";   bridge   companies;   insur- 
ance companies;  uniformity  of  taxation §  78 

franchises  or  privileges  conferred  by  Congress;  railroads;  tele- 
graph companies §  75 

railroads §  76;  note,  §  123 

of  railroads ;  cars  temporarily  absent  from  State §  76 

situs  of  property  for §  76 

board  of  equahzation;  jurisdiction §  81 

conclusiveness  of  decisions  of  boards  of  equalization §  123 

bill  in  equity  to  decree  that  railroad  exempt  from §  83 

injunction  to  restrain  railroad  commission  from  approving  and 

certifying  assessment  of  taxes .  §  83 

jurisdiction  of  State  assessment  board  to  correct  valuations.  ...  §94 

action  of  tax  officers  miLst  be  yielded  to  until  set  aside §  123 

equity  jurisdiction  to  restrain  collection  of  taxes §  164 

illegal;  enforcement  involving  multiplicity  of  suits;  equity  juris- 
diction    §  167 

suit  by  State  against  telegraph  company  to  recover  taxes §  251 

United  States  may  sue  bank  to  recover §  252 

United  States  as  party  plaintiff  in  suit  to  recover  taxes §  252 

liability  of  nonresident  stockholder  for §  286 

right  of  stockholder  to  sue  in  equity  to  enjoin  corporation  from 

paying §  404 

See  Assessment;   Assessment   Boards;   Constitutional    Basis  of 
Actions  and   Defenses   (VI);  License  Tax. 

TAX  COMMISSIONERS, 

requirements  as  to  return  by;  certiorari  to  review  assessment  of 
special  franchise  tax §  124 

TAX  DEEDS, 

suit  by  assignee  of  mortgage  to  set  aside;  jurisdiction  of  Federal 
Courts §  192 

TAXPAYER, 

suit  by  corporation  as §  258 

suit  by  corporation  as;  parties §  258 

suits  against  corporations;  parties §  258 

suit  by,  to  enjoin  illegal  construction  of  street  railroad §  258 

suit  by,  as  to  act  of  municipahty §  258 


INDEX  867 

TELEGRAMS, 

penalties  for  failure  to  exercise  diligence  in  transmission  of §  31 

delivery  of;  statute  as  to  cannot  interfere  with  interstate  com- 
merce    §  31 

delivery  of ;  statute  as  to;  reserved  police  power;  interstate  com- 
merce    §  31 

taxation  upon ;  restriction  on  interstate  commerce §  46 

libelous;  liability  for  act  of  servant note,  §  317 

TELEGRAPH  COMPANIES, 

regulation  and  control  of §  31 

penalty  for  not  exercising  diligence  in  transmission  of  telegrams; 

State  may  provide §31 

right  to  maintain  lines  over  post  roads;  interstate  commerce.  ...  §  46 

method  of  valuation  for  taxation §  61 

single  tax  upon  receipts  of §  61 

no  exemption  of,  from  taxation  because  of  privileges  conferred  by 

United  States §  75 

consent  as  prerequisite  to  construction  of  lines §  96 

consent  as  prerequisite  to  extension  of  lines §  96 

jurisdiction  or  power  of  court  of  visitation §  98 

jurisdiction  over,  of  railroad  commissioners;  generally §  122 

jurisdiction  of  railroad  commission  to  require  offices  of,  to  be 

established §  122 

tariff  regulation  of,  by  railroad  commission §  122 

suit  in  name  of  State  to  recover  taxes §  251 

ejectment  lies  to  recover  for  removal  of  poles §  315 

sending  libelous  message;  liability  for  act  of  servant note,  §  317 

when  liable  for  acts  of  servant  in  causing  false  imprisonment.  .  .  §  331 

when  mandamus  lies  and  does  not  lie  against §  372 

injunction  by  and  against , §  427 

discrimination;  penalties §  442 

See  Telegrams. 

TELEGRAPH  LINE, 

Post  Roads  Act,  State  statute  must  not  conflict  with §  2 

in  street;  right  of  abutting  owner  against §  242 

TELEPHONE  COMPANIES, 

regulation  and  control  of §  31 

jurisdiction  or  power  of  court  of  visitation §  98 

requiring  installment  of  in  railroad  station;  jurisdiction  of  rail- 
road commissioners §  122 

when  liable  for  false  imprisonment §  331 

when  nmndamus  lies  and  does  not  lie  against §  371 

injunction  by  and  against §  427 

discrimination;   penalties §  442 


868  INDEX 

TERRITORIES, 

revisory  power  of  Congress  over §  3 

Congress  has  revisory  power  over  legislative  acts §  5 

cannot  pass  laws  having  force  or  effect  over  persons  beyond 

jurisdiction §  "* 

effect  as  to  of  Employers'  Liability  Act  of  Congress §  26 

regulation  of  commerce  in;  power  of  Congress §  45 

divided  into  two  States;  jurisdiction;  citizenship §  184 

new  rights  of  action  given  by  statute,  may  be  enforced  in  Federal 

Courts §  402 

See  Statutes. 

TESTAMENTARY  TRUSTEE, 

cannot  question  validity  of  corporate  existence  of  institution  for 
whose  benefit  he  holds  fund §  249 

TESTIMONY, 

production  of  books,  etc.;    process  of  Federal  Courts  in  aid  of 
inquiries  before  Interstate  Commerce  Commission §  137 

TEST  SUITS, 

when  agreement  to  abide  result  of  is  void §  93 

THEATRICAL  CORPORATION, 

or  syndicate;  action  against  for  conspiracy  not  sustained §  338 

TIMBER, 

running  out  of  booms;  inspection  of  by  surveyor  general §  93 

action  to  recover  for  removal  of  when  ex  contractu §  320 

trespass  quare  clausumfregit  for  cutting  and  currying  away §  330 

TIME  LIMITATIONS, 

for  suing.    See  Limitations. 

TITLE, 

equity  jurisdiction  to  remove  cloud  upon  or  to  quiet §  167 

suit  by  attorney-general  to  quiet §  251 

basis  of  ejectment  action . note,  §  315 

equitable  action  to  quiet  and  remove  cloud  on §  402 

when  party  in  possession  may  sue  in  equity  to  quiet  title  and 

remove  cloud §  404 

suit  to  quiet;  what  is  not  a  condition  precedent  to §  405 

TOLL  ROAD  COMPANY, 

State  only  can  question  right  to  exercise  franchise §  249 

TOLLS, 

powers  of  State  as  to §  76 


INDEX  869 

TORT, 

matters  of  defense  in  action  of  not  ground  for  removal  of  suit ....  §  206 

joint  actions;  removal  to  Federal  Courts §  214 

action  by  consignor  against  corporation §  243 

of  predecessor;  railroad  company  not  liable  for §  254 

See  Actions  Ex  Delicto;  Embezzlement. 

TORT  OR  CONTRACT, 

election  of  remedy;  form  of  action §  319 

TOWN  COUNCIL, 

power  to  fix  water  rates §  95 

TRADE, 

and  commerce;  Act  of  1890  to  protect note,     §  11 

combinations  in  restraint  of §  445 

TRADE  UNION, 

agreement  by  executive  committee  of  corporation  with;  status  of 
stockholder  to  attack note,  §  261 

TRADING  CORPORATION, 

in  England  may  maintain  action  for  libel  calculated  to  injure 
business,  etc , §  335 

TRAIN  CONNECTIONS, 

jurisdiction  of  railroad  commission  as  to §  119 

TRANSFEREE, 

of  warehouse  receipt;  liability  of  warehouseman  to  damages  for 
refusal  to  deliver  wheat  to §  314 

TRANSFERS  OF  STOCK, 

pledge  for  collateral  security;  liability  of  pledgee  as  stockholder; 

national  banks;  bailment §  277 

as  affecting  liability  of  stockholder  for  unpaid  installments §  288 

TRANSPORTATION  COMPANIES, 

regulation  and  control  of §  21 

TRANSPORTATION  CORPORATION, 

enforcement  of  penalty  for  bringing  alien  immigrants  with  con- 
tagious diseases §  100 

TRANSPORTATION  FACILITIES.    See  Railroads. 

TRANSPORTATION  LAW, 

of  New  York;  consent  to  construction  of  extension  of  telegraph 
lines — §  96 


870  INDEX 

TRAVELING  SALESMAN, 

when  cannot  recover  statutory  double  damages  for  loss  of  baggage.  §  314 

TREATIES, 

with  Constitution  and  laws  are  supreme  law  of  land §  2 

vaUdity  as  ground  of  jurisdiction  of  Federal  Supreme  Court. ...   §  158 

TREES, 

trespass  qvare  datisum  fregit  for  cutting  down §  330 

TRESPASS, 

hes  against  a  corporation §  328 

jurisdiction,  transitory  action  of;  parties  residents  of  other  States 

than  that  of  suit §  188 

equity  has  jurisdiction  to  protect  real  estate  from §  236 

lies  against  corporation  for  assault  and  battery §  328 

against  corporation  to  recover  damages  for  personal  injuries.  ...  §  328 

mesne  profits §  329 

for  mesne  profits  lies  against  a  corporation §  329 

not  proper  form  of  action  for  injuries  caused  by  negligence  of 

servants  of  corporation §  328 

for  mesne  profits  to  recover  value  of  oil  mined §  329 

injury;  liability  for  acts  of  servant note,  §  317 

TRESPASS  ON  THE   CASE §  332 

proper  action  for  injuries  caused  by  negligence  of  servant  of 

corporation §  328 

lies  against  corporation §  332 

when  lies  are  concurrently  with  assumpsit §  333 

TRESPASS  QUARE  CLAUSUM  FREGIT §  330 

against  railroad  company  for  constructing  railroad §  330 

hes  against  corporation §  330 

lies  against  railroad  corporation §  330 

TRESPASS  VI  ET  ARMIS, 

lies  against  corporation §  328 

TRIAL, 

enforcement,  by  Secretary  of  Commerce  and  Labor,  of  penalty, 

without  judicial  trial §  100 

place  of;  criminal  law;  single  continuous  act;  Elkins  Act;  dis- 
crimination in  rates;  rebates §  468 

TROLLEY.     See  Electric  Street  Railway. 

TROVER  AND  CONVERSION : . . .      .    §  340 

trover  lies  against  corporation §  340 


INDEX  871 

when  corporation  no  sufficient  riglit  to  property  to  maintain 

action §  340 

trover  lies  for  wrongful  converson  of  stock §  340 

title  necessary  to  maintain  uuit  for  conversion  of  stock §  340 

when  action  is  for  trover  and  not  for  breach  of  contract  of  bail- 
ment  note,  §  340 

when  trespass  and  not  trover  alleged  for  injury,  etc.,  to  trees 

and  timber. §  330 

when  does  not  he;  cutting  down  and  carrying  away  timber §  330 

legal  currency  may  be  subject  of  action  of  trover §  340 

removal  and  conversion  of  ores  from  mine;  person  liable  not  en- 
titled to  be  credited  with  cost  of  mining  the  ores §  340 

when  wrongful  refusal  to  transfer  stock  on  corporate  books  is  a 

conversion §  34O 

when  bank  liable  for  conversion  of  bonds §  340 

demand  and  refusal  to  charge  conversion §  340 

TRUST  COMPANY, 

prospectus  issued  by;  when  basis  of  action  for  fraud §  339 

when  demand  and  refusal  necessary  to  charge  it  with  conversion  of 
bonds §  340 

TRUSTEES, 

board  of  not  a  corporation  for  jurisdictional  purposes §  177 

action  against  for  an  accounting;  parties §  261 

individual  liability  of  to  creditors  where  capital  stock  not  sub- 
scribed     §  265 

of  funds  for  dividends;  suit  by  stockholders  against;  defenses; 

counterclaim §  270 

TRUST  FUND, 

of  insurance  company  in  hands  of  State  auditor;  jurisdiction  over 
of  court §  128 

"TRUST  FUND"  DOCTRINE, 

capital  stock;  unpaid  subscriptions §  279 

See  Equity. 

TUNNELS, 

under  navigable  water;  ordinance  as  to  construction  of  when  not 

a  contract  under  the  contract  clause  of  the  Constitution §  21 

right  of  railroad  to  maintain  under  navigable  water  subject  to 

right  of  navigation §  25 

power  of  city  to  compel  railroad  companies  to  remove  timnels 

under  navigable  river  at  latter's  expense §  25 

u 

ULTRA  VIRES, 

act;  injunction  at  suit  of  stockholder  to  prevent §  268 


872  INDEX 

ULTRA  VIRES— Continued: 

contract;  assumpsit  for  money  had  and  received §  321 

contract;  assumpsit  against  bank §  323 

UNITED  STATES, 

Constitution  and  laws  of;  supreme  law  of  land §  2 

offense  against;  act  of  Congress  as  to  discharge  of  employ^  when 

member  of  labor  organization §  26 

certificates  of  indebtedness  of;  taxation §  73 

franchises  or  privileges  conferred  by;  extent  to  which  State  can- 
not tax §  "^ 

as  plaintiff;  right  to  recover  from  bank;  forgery  of  payee's  name 
on   pension   checks;   internal   revenue   taxes;   action   against 

railroads §  252 

may  bring  action  to  collect  taxes  on  bank §  252 

as  plaintiff;  right  to  recover  from  bank;  forgery  of  payee's  name 

on  pension  checks §  252 

party  plaintiff;  action  against  railroad §  252 

party  plaintiff;  suit  to  collect  taxes §  252 

party  plaintiff;  suit  against  bank;  forgery;  pension  checks §  252 

offenses  against §  443 

See  Federal  Government;  Constitutional  Law;  States 

UNITED  STATES  COURTS.    See  Courts. 

UNITED  STATES  REVISED  STATUTES, 

§  709;  as  to  examining  final  decree  of  State  Court §  158 

UNITED    STATES    SUPREME    COURT.      See    Courts;    Federal 
Supreme  Court ;  Jurisdiction  of  Courts. 

UNLAWFUL  RESTRAINTS.    See  Commerce. 

UNPAID  STOCK, 

when  is  and  is  not  asset §  280 

stockholder's  habihty  for,  to  judgment  creditors;  parties §  299 

UNPAID  SUBSCRIPTIONS, 

a  trust  fund  for  creditors §  279 

or  unpaid  stock  when  are  assets §  280 

when  are  not  assets §  280 

liability  of  stockholders  to  creditors §§  288,  289 

hability  of  stockholders  for;  parties §  290 

USURY, 

by  national  banks;  effect  of §  66 

V 

VENDEE, 

action  by,  for  fraud ;  false  statements  in  prospectus §  339 


INDEX  873 

VENDOR, 

false  statements  by,  in  prospectus §  339 

VENUE, 

defined §  91 

VESSEL, 

place  of  taxation §  61 

when  consignee  no  claim  against,  for  injury  to  cargo §  244 

VESTED  RIGHTS, 

right  of  State  to  alter,  etc.,  charter  should  not  interfere  with ....     §  25 

VIADUCTS, 

over  grade  crossings;  power  of  State  to  supervise  and  control ....  §  24 

crossing  several  roads,  power  of  State  to  apportion  expense ....  §  24 

power  of  city  to  compel  railroad  to  repair §  2.5 

crossing  railroad;  apportionment  of  repairs  by  city  council....  §93 

VINDICTIVE  DAMAGES, 

against  corporation  for  false  imprisonment §  331 

w 

WAGES.    See  Lien. 

WAIVER, 

of  award  in  condemnation  proceedings §  127 

of  defense  of  adequate  remedy  at  law §  165 

of  objection  to  jurisdiction  by  appearance §  201 

of  jurisdictional  defect  as  to  particular  district §  202 

of  failure  of  foreign  corporation  to  allege  and  prove  capacity  to 

sue §  233 

of  remedy  on  implied  contract  to  return  consideration §  259 

imphed  contract  may  be  waived  and  suit  brought  on  tort §  259 

election  of  remedy;  contract  or  tort;  form  of  action §319 

WANT  OF  CAPACITY, 

of  foreign  corporation  to  sue;  waiver  of §  233 

WAREHOUSE   COMMISSION.      See    Railroad    and    Warehouse 

Commission. 

WAREHOUSEMEN, 

suit  against,  by  consignor §  243 

•  liable  for  damages  for  refusal  to  deliver  wheat  demanded  to 

transferee  of  warehouse  receipts §  314 

evidence  of  negligence  as,  when  does  not  warrant  recovery  for 

negligence  of  carrier §  318 

equity  no  jurisdiction  to  fix  rates §  40o 


874  JNDEX 

WAREHOUSES, 

power  to  regulate  public  warehouses  does  not  include  elevators 

or  private  persons;  when §  57 

when   equity   will   not   compel   railroad   company  to  own  and 

operate §  403 

and  compress  lease  fixing  rates;  when  party  not  sufficient  in- 
terest to  invoke  aid  of  equity §  404 

See  Elevators. 

WARRANTS, 

when  within  principle  of  exemption  of  governmental  agencies 

from  taxation §  69 

WASTE, 

by  directors.     See  Directors. 

WATER, 

petition  for  condemnation  of;  jurisdiction  in  special  cases §  87 

jurisdiction  of  State  board  of  control  to  adjudicate  water  rights.     §  93 
State  may  declare  all  water  for  sale,  rental,  etc.,  to  be  a  public 

use §  95 

See  Navigation. 

WATER  COMPANIES, 

regulation  and  control  of §  18 

jurisdiction    of    Circuit    Court;    validity    of    contract    between 

municipality §  208 

flooding  land;  nuisance §  334 

when  mandamus  lies  and  does  not  lie  against §  373 

WATER  RATES.    See  Constitutional  Law;  Rate  Regulation. 

WATER  RIGHTS, 

contested  title  to;  Federal  question;  jurisdiction note,  §208 

WATER  SUPPLY, 

condemnation  proceedings  taken  to  State  Court  may  be  removed 
to  Federal  Court §  127 

WATERWORKS  COMPANY, 

pleading  in  action  against  directors  for  maladministration §  264 

WAYS, 

petition  for  right  of  way;  jurisdiction  in  "special  cases" §  87 

See  Right  of  Way. 

WHARFAGE, 

held  governed  by  local  State  laws;  remedy  is  in  legislature  where 

rales  as  fixed  are  unreasonable §  34 


INDEX  875 

WHEAT, 

refusal  of  warehouseman  to  deliver,  etc.;  liability  for  damages 
to  transferee  of  warehouse  receipt §  314 

WILLS, 

equity  jurisdiction  of  Federal  Circuit  Court  as  to §  169 

WILSON  ACT, 

interstate  shipment;  delivery  when  complete §  52 

intoxicating    liquors;    interstate    shipment;    "arrival";    original 

package §§  53,  54 

purpose  of;  exclusion  of  intoxicating  liquors  from  State §  54 

inspection  of  intoxicating  liquors  after  they  have  ceased  to  be 

articles  of  interstate  commerce s  59 

WIRES, 

of  electrical  companies.     See  Poles  and  Wires. 

WITNESS, 

contempt;  power  of  Interstate  Commerce  Commission §  137 

compensation  to;  notice  to  corporation  to  produce  books,  etc., 

before  grand  jury s  138 

WORK, 

performed;  corporation  may  sue  for §  227 

WRIT, 

defective  or  service  of  summons  on  person  irregular;  jurisdiction 

acquired §  §3 

hes  to  enforce  discretionary  or  ministerial  duties §  356 

does  not  lie  to  enforce  discretionary  duties §  357 

See  Mandamus;  Praecipe;  Prohibition;  Quo  Warranto;  Writ  of 

Error. 

WRIT  OF  ERROR, 

Federal  Supreme  Court;  fundamental  question;  jurisdiction...  §157 

Federal  Supreme  Court  cannot  deal  with  facts §  158 

after  1891  to  Federal  Supreme  Court §  159 

from  final  judgment  of  State  Court;  what  is  final  judgment.  ...  §  204 
under  §  709  of  Revised  Statutes  of  United  States,  as  amended 

note,  §204 
to  Federal  Supreme  Court  to  review  judgment  of  State  Court 

denying  defense §  2O8 

WRONGFUL  DEATH, 

State  statute  as  to  actions  for,  where  death  occurs  in  another 

State I  199 

joint  action  for;  removal  of  suit §  214 

WRONGFULLY  SUING, 

out  attachment §  337 


SOUTHERN  REGIONAL  LIBRARY  FACILITY 

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Barcode  Number 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 

Los  Angeles 

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